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  • Relocation Policy Proposal: UIUC BMG & BAC Feedback Period

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rairden@illinois.edu Jul 11, 2019 1:10 pm

Questions pertaining to the impact on employees and overall HR operations:

  • Will this be processed as a lump sum payment or a stipend (such as insurance stipends processed as default earnings)?  (The messages reference lump sum, so we just want to confirm this process since this policy shifts effort from business to HR.)
  • Will the REL transaction in PARIS be tied to the primary position or will an LP job have to be established? (Our hope is that this is tied to the primary job for less processing work.)
  • How will lump sum payments be handled for part-time employees who are ineligible for a lump sum payment per PPACA standards? This may be relevant more so for AP and CS employees rather than faculty and administrators. 
  • We want to confirm that absolutely no documentation will be required to process the payment other than the signed offer letter with the relevant info. It seems odd to pay a flat $ amount without any supporting documentation.  It is our assumption that, since this won’t be processed as a reimbursement, no documentation will be required, but would just like confirmation.
  • There could be even further delays in the payment if the job is not processed prior to calc, esp. during peak processing timeframes, which places further financial burden on the employee.
  • Employees will need to be informed of the up-front costs not being accounted for until (or after) their first paycheck (pre-move house hunting expenses, etc.)
  • Relocation $ amounts
    • Different dollar amount levels for the employment categories (i.e. Faculty vs. AP vs. CS)
    • Who will be enforcing these amounts? 
    • Will distance be a factor when determining eligibility?
    • What is the likelihood of being able to increase the stipend further? 
    • We would like established guidelines to help with implementation.
  • What is the impact to foreign nationals?
    • The prevailing wage is requested with the annual salary, not an additional amount for a relocation allowance that appears to be salary. Has Legal Counsel been consulted?
  • Is there an option to spread the payment over multiple pay periods (at least 2 for example)?  We anticipate there will be questions from employees and are thinking of tax implications. Has Legal Counsel been consulted? 

 

rairden@illinois.edu Jul 11, 2019 1:03 pm

1. We agree with raising the relocation assistance cap from $7,500 to $15,000.  How was the $15k amount determined? Is this amount similar to what our peers are offering? What research been completed based on current usage (i.e. through Allied)?

2. The proposed changes cannot negatively impact our ability to successfully recruit and retain top talent. We must remain competitive with our peers and present a favorable first impression when they arrive on campus.  What research has been done in this regard and can it be shared with the colleges and departments?  How does the new proposed method compare with other institutions?  We have feedback from one department head who said other institutions may very well operate in a similar capacity, so it would be great to have the background info on how we arrived at the proposed policy.

3. We want to maintain a high level of service to our new employees, and especially new faculty members. On one hand, the proposed policy presents a much simpler process for relocation payments overall, which may be a welcomed option for many new employees and staff.  On the other hand, many faculty are relieved to have some of the relocation costs handled by the dept. in terms of ease and to not have money out-of-pocket. The new policy seems to eliminate the option for departments to provide direct payment support if/when it is needed or preferred. 

4. We believe that PARIS transactions cannot be processed until the job record is in Banner. We are concerned about telling new employees (esp. faculty) that they will have to wait until they are fully on-boarded before receiving a stipend to pay for their moving allowance.  Many faculty use the direct billing for the use of Federal Warehouse so that they are not out of pocket for moving expenses.  This is especially important when they are trying to buy a home at the same time and may feel tight on cash.

5. The switch from a reimbursement-based process to a one-time moving stipend is problematic. 

  1. Are employees utilizing all of the relocation allowance now?  Are there metrics to support this policy change or is it simply to solve the tax implication issue? We have data from at least one large unit that suggests several thousand dollars may go unspent when there are minimal moving costs. Paying a one-time stipend at X amount sets the potential for unintended profit at the university’s expense. 
  2. On the other hand, what happens when an employee spends more than the $ amount designated in their offer letter? Is another stipend going to be allowed?  Who manages that process and what approvals are required? 

6. Even though there may no longer be reimbursements, is it really a good idea to eliminate the list of ‘pre-approved’ expense types? What if the employee exceeds the $ amount listed and comes to the department for additional financial support?  What if the costs are not normal relocation expenses that would have previously been pre-approved?

7. We do not support ending the ability to make direct payments to moving companies or other vendors. We need to retain the option to pay vendors directly.  Currently, Federal Warehouse Company offers moving services at a price up to 68% discounted from other vendors.  If the university stops using Federal, then we imagine that discount will no longer be available.  Therefore, each move will cost more than what it currently does – is this an unintended consequence for the proposed plan?  Just like travel, if we can prevent an employee from having to bear the cost at any point, why would we not take that burden from them?

8. Business managers are being asked to sign off on a policy that says Universities may add new policies to further restrict assistance.  How can you approve this policy without knowing what is yet to come?

holman1@illinois.edu Jul 10, 2019 9:19 am

We really like this idea of a stipend due to the gray areas in the current relocation allowable expenses items.  It is difficult to give guidance on what expenses are allowable with house hunting, moving, storage, supplies temporary housing, etc. But we agree, the hardships of the relocation stipend payment happening not until they become an active employee is a concern, however, in most cases the reimbursements are not happening until they become an active employee anyway.  We may want to maintain paying Federal Companies directly in TEM by the unit to eliminate money out of pocket for the new/transfer employee and this will encourage new employees to utilize the offered discount. 

jbohn@illinois.edu Jul 9, 2019 3:26 pm

Having new employees have to pay out of pocket for moving expenses could cause hardships.  Are there any mechanisms that could provide them the stipend prior to starting.  For instance is there a 0% job that could be added prior to official start that would not cause concerns with PPACA?  This may not be a good alternative; however, are there others?  Alternatives that would allow for flexibilty in this area woudl be greatly appreciated.  If there  is no flexibility to provide the relocation stipend prior to an employee's "primary" job starting then we would ask the System Office to have conversations with our moving partners focused on payments from employees needing to happen  after the employee starts their primary position and receives stipend.

Maintaining discounts from the moving companies is very important.

If these changes are made one benefit would be not having to document relocation expenses.  We would want to make sure that no documenation would be required of expenses.

jweaver2@illinois.edu Jul 5, 2019 3:57 pm

Is this relocation assistance meant to be limited to personal moving expenses?  For some researchers, units are still using and paying movers to move their in-bound University lab equipment.  And seems like those types of expenses should not be taxable to the new employee.  Curious about what's to be included or excluded from the stipend.  And perhaps the policy needs clarification on this issue.

amyhiles@illinois.edu Jun 28, 2019 10:05 am

This stipend will not pay until after the employee is here? I like the idea of doing it this way as it will limit the issues with people being confused on the taxation issues, however I am concerned on the time frame with them being able to receive the stipend.

broga@illinois.edu Jun 28, 2019 8:59 am

What is the intent behind ending direct payments to contracted moving companies?  If we cannot pay a stipend until after the employee is on payroll, this could create a hardship for the new employee.

laa@illinois.edu Jun 27, 2019 1:03 pm

1. Confirm that no matching HRFE/Banner appointment is needed for the stipend.

2. Will the employees be able to take advantage of moving discounts or University pricing if not being paid by the University?  Or will the moving companies end these discounts?

3. This means that the PARIS cannot be completed until there is an active employee record, correct?