RSC Relocation Policy & Program Administration 3 — Questions and Answers
Question 1: A policy requires employees to use a preferred moving vendor. An employee insists on using their own carrier. What should the relocation specialist do?
- Allow it and reimburse the full amount
- Explain the policy requirement and outline any consequences for non-compliance (Correct answer)
- Contact the employee's manager to discipline them
- Update the policy immediately to remove the vendor requirement
Correct answer: Explain the policy requirement and outline any consequences for non-compliance
Relocation specialists should inform employees of policy requirements and consequences while ensuring decisions are documented.
Question 2: Which document typically serves as the legal foundation for an employee's relocation benefits?
- The employee's personal moving checklist
- A signed relocation agreement or offer letter addendum (Correct answer)
- An email from the hiring manager
- The company's general employee handbook only
Correct answer: A signed relocation agreement or offer letter addendum
A signed relocation agreement or offer letter addendum creates a binding commitment between the employer and employee regarding relocation benefits.
Question 3: What does 'gross-up' refer to in the context of relocation policy administration?
- The total weight of household goods shipped
- Additional payment made to cover the income taxes an employee owes on taxable relocation benefits (Correct answer)
- A fee charged by relocation management companies
- The process of increasing the relocation budget annually
Correct answer: Additional payment made to cover the income taxes an employee owes on taxable relocation benefits
Gross-up payments compensate employees for the additional income tax liability created by taxable relocation reimbursements.
Question 4: An internal audit reveals that multiple managers granted different relocation exceptions to employees at the same job level. What systemic issue does this indicate?
- The relocation vendor performed poorly
- Lack of centralized policy governance and inconsistent exception management (Correct answer)
- The policy tier structure is too detailed
- Employees are negotiating too aggressively
Correct answer: Lack of centralized policy governance and inconsistent exception management
Inconsistent exceptions across the same job level signal that the approval process lacks central oversight and clear criteria.
Question 5: Under IRS regulations, which moving expense reimbursement remained tax-free for most employees after the Tax Cuts and Jobs Act of 2017?
- All household goods shipment costs
- House-hunting trip expenses
- Moving expense reimbursements for active duty military members only (Correct answer)
- Temporary living allowances up to 30 days
Correct answer: Moving expense reimbursements for active duty military members only
The TCJA suspended the moving expense exclusion for non-military employees through 2025, but active duty military members retained the tax-free treatment.
Question 6: A company's relocation policy includes a home sale program. What is the primary benefit of a Buyer Value Option (BVO) program for the employer?
- It eliminates the need for a relocation management company
- It avoids the company taking title to the property, reducing financial risk and carrying costs (Correct answer)
- It guarantees the employee receives above-market value for their home
- It requires the employee to find their own buyer without company assistance
Correct answer: It avoids the company taking title to the property, reducing financial risk and carrying costs
BVO programs allow the company to facilitate the sale without taking title, avoiding real estate holding costs and associated risks.
Question 7: Which factor most significantly drives variation in relocation costs between domestic and international assignments?
- Differences in employee age demographics
- Immigration, tax equalization, cost-of-living adjustments, and housing allowances specific to the host country (Correct answer)
- The distance in miles between origin and destination
- The number of HR staff administering the program
Correct answer: Immigration, tax equalization, cost-of-living adjustments, and housing allowances specific to the host country
International relocations involve complex layers including visas, host-country taxes, COLA adjustments, and housing norms that dramatically increase total program cost.
RSC Relocation Policy & Program Administration 3
A policy requires employees to use a preferred moving vendor.
An employee insists on using their own carrier.
What should the relocation specialist do?