CRP Relocation Policy 2 — Questions and Answers
Question 1: What is the primary purpose of a relocation repayment agreement?
- To fix the employee's housing budget
- To guarantee the employee a minimum salary after the move
- To recover relocation costs if the employee leaves the company within a defined period (Correct answer)
- To transfer the tax liability to the receiving location
Correct answer: To recover relocation costs if the employee leaves the company within a defined period
A repayment agreement lets the employer recover some or all relocation spend if the employee resigns or is terminated for cause within a set period, commonly 12 months.
Question 2: In a tiered relocation policy, what generally determines which tier an employee receives?
- The employee's distance from the airport
- The employee's tenure alone
- The carrier's availability
- Employee level, move type, or business need such as new hire versus transfer (Correct answer)
Correct answer: Employee level, move type, or business need such as new hire versus transfer
Tiers typically align benefits to job level or move type, such as executive, transferee, new hire, or intern.
Question 3: Which approach gives an employee a fixed sum to manage their own move with no itemized reimbursement?
- Direct-bill program
- Lump-sum program (Correct answer)
- Reimbursement-only program
- Managed move
Correct answer: Lump-sum program
A lump sum gives a set amount the employee uses at their discretion, which reduces administration but shifts cost control and risk to the employee.
Question 4: Under a core/flex relocation policy, what are 'core' benefits?
- Benefits that apply only after one year
- Benefits only for international moves
- Essential benefits provided to all relocating employees (Correct answer)
- Optional benefits employees pay for entirely
Correct answer: Essential benefits provided to all relocating employees
Core benefits are the baseline services every mover receives, while flex lets employees choose from additional options within an allowance.
Question 5: Why do employers often offer a tax gross-up on taxable relocation benefits?
- To avoid needing a repayment agreement
- To offset the income tax the employee owes on the reimbursed benefits (Correct answer)
- To reduce the company's payroll taxes
- To increase the employee's base salary permanently
Correct answer: To offset the income tax the employee owes on the reimbursed benefits
A gross-up adds an amount so the employee is held harmless for taxes on taxable moving benefits.
Question 6: What is a key advantage of a documented policy exception process?
- It guarantees every request is approved
- It removes manager involvement entirely
- Consistent, auditable decisions on out-of-policy requests (Correct answer)
- It eliminates the need for a written policy
Correct answer: Consistent, auditable decisions on out-of-policy requests
A defined exception process controls costs, ensures fairness, and creates a record for future policy review.
Question 7: When benchmarking a relocation policy, what is the main goal?
- Set the policy to match the lowest-cost competitor
- Choose a moving carrier
- Determine the employee's tax rate
- Compare benefits and costs to peer companies to stay competitive (Correct answer)
Correct answer: Compare benefits and costs to peer companies to stay competitive
Benchmarking reveals how a policy compares with market practice so it can attract talent while managing cost.
