University Policy HRM-047

University Policy HRM – 047: Provision of Moving and Relocation Assistance for Newly Hired Faculty or Staff, provides for the provision of Moving and Relocation Assistance for moving expenses, when necessary, to attract a new, full-time, employees hired by the University. The Policy defines the procedures for processing a moving allowance payment, and the treatment of such payments for tax purposes. Not all prospective employees will be eligible for Moving and Relocation Assistance. The payment of Moving and Relocation Assistance is at the sole discretion of the University and subject to the availability of funds. The authority to approve such allowances is limited to a small number of high-level University officials.

Effective January 1, 2018, the exclusion from income for the reimbursement of an individual’s moving expenses has been suspended until January 1, 2026. As such, the lump sum relocation payment or taxable moving expenses reimbursed are considered taxable income for the employee (i.e., included in the employee’s pay) and subject to income and employment taxes and required withholdings.  Any expense submitted for reimbursement after December 31, 2017 will be taxable, regardless of when the expense was incurred by the employee. This includes all previously defined “qualified” and “non-qualified” moving/relocation expenses.

State income tax consequences of personal moving expense payments/reimbursements, which depend on the employee’s state of residence and University work location, are still being reviewed.

All applicable taxes (Federal, State, Social Security & Medicare) along with applicable retirement percentages will be deducted at time of payment.  As with all forms of compensation, the employer’s portion of taxes is also due, therefore Employee Related Expense (“ERE”) rates will be applied to recoup for these deductions. ERE are the expenses the University is responsible for as an employer. ERE is comprised of Federal Insurance Contributions Act (“FICA”) tax, Retirement, Unemployment Compensation,

Worker's Compensation, Liability Insurance, Health/Dental/Life Insurance, and Dependent Care Assistance.

This policy establishes guidelines and a monetary threshold for Moving and Relocation Assistance offered to a newly hired employee.  While there is no standard amount for the Moving and Relocation Assistance, the same is determined for each prospective employee on a case-by-case basis and the following terms and conditions shall apply generally.    

• If authorized, the monetary threshold for Moving and Relocation Assistance shall not exceed twenty thousand ($20,000) dollars.
• A new employee must be relocating at least fifty (50) miles from their previous residence to qualify for Moving and Relocation Assistance.
• Exceptions to the $20,000 monetary cap and move/relocation distance requirement, must be approved, in writing, by the Vice President and Chief Human Resources Officer.
• If the employee’s spouse is also an incoming University employee and otherwise eligible for Moving and Relocation Assistance, expenses for the move of the primary household is paid to or provided on behalf of one (1) employee only.
• The newly hired employee will be required to execute an Employee Moving and Relocation Agreement prior to the payment of the Moving and Relocation Assistance.
• If an employee whose moving and relocation expenses have been reimbursed does not continue full-time employment with the University for a period of at least one (1) year, beginning from the date the employee starts their employment at UVA (unless discontinuance of the employment was the result of death, disability or other similar unexpected cause beyond the control of the employee as determined by the Executive Vice President and Provost or Vice President and Chief Human Resources Officer (or respective designees)), the employee shall repay the University the prorated gross amount of the Moving and Relocation Assistance, i.e., actual payments that were received by or paid on behalf of the employee. This includes payments to third parties on employee’s behalf, plus all taxes deducted that relate to those payments.

Assistance for moving and relocation expenses must be authorized, in advance, by the School/Unit/ Department Head or Designated Hiring Official. These individuals are responsible for determining that budgeted funds are available for Moving and Relocation Assistance and that the expenses are in compliance with this Policy. The Offer Letter given to the newly hired employee approved for Moving and Relocation Assistance should include the maximum and all-inclusive dollar amount which the University will pay towards an employee’s substantiated moving and relocation expenses. The Offer Letter shall also state that the Moving and Relocation Assistance is subject to taxation.  

The payment of Moving and Relocation Assistance is subject to the terms consistent with the provisions outlined in policy HRM – 047: Provision of Moving and Relocation Assistance for Newly Hired Faculty or Staff. If moving assistance was not documented in the Offer Letter, the School/Unit/Department Head or Designated Hiring Official shall prepare a letter of justification and obtain senior executive level approval based on the reporting structure of the School/Unit/Department.

Payment(s) made as a taxable benefit to or on behalf of an incoming employee to assist with their personal move, relocation and employment costs.; intended to cover house-hunting costs, relocation travel expenses, packing and transportation of goods, furnishings and personal effects of employee and members of the employee’s household; transportation and temporary lodging for the employee and members of the employee’s household while moving. The Moving and Relocation Assistance is the total amount authorized to be paid for the employee’s relocation costs.

Expenses of the employee and/or his/her household members, after arriving at the University or principal site of employment, are the responsibility of the employee and considered inclusive in the Moving and Relocation Assistance.    

Yes. When budgeting for Moving and Relocation Assistance payments, Schools/Units/

Departments must include the amount to be charged for fringe. The fringe charged to the School/Unit/Department changes annually. The Schools/Units/Departments shall ensure all unemployment, workers comp, FICA, and Medicare amounts applicable to the

employee's classification is used in fringe rate calculations. Fringe rates are determined and maintained by University Finance.

No. Schools/Units/Departments are not allowed to “gross up” the lump sum offered to new employees.

No. Moving and Relocation Assistance payments are not allowed on sponsored project accounts. However, cost transfers for the amount of the assistance supported by receipts may be allowed. Please contact The Office of Sponsored Programs (“OSP”) for more information.

No. The allowance is paid on the employee’s paycheck and the employee must exist as an “active” employee in Workday© to initiate the payment request. 

No. Pre-move house hunting expenses are inclusive in the Moving and Relocation Assistance and paid on the employee’s paycheck in Workday© by initiating a payment request for the full amount of the Moving and Relocation Assistance provided.  

Yes. All University contracted moving & relocation service vendors, as displayed on the Procurement & Supplier Diversity Services Department (“PSDS”) website, will offer UVA pricing to the new employees. The individual is responsible for the payment terms with the vendor. The existence of these contracts does not constitute an endorsement of the supplier by the University nor does the University make any representation that the negotiated rates are the best rates available.

Yes. In such cases, the School/Unit/Department coordinates with the contracted supplier and the new employee. The contracted supplier bills the University for expenses associated with moving household goods and personal effects. There is no cash outlay to or by the employee at the time of the move. The move itself is solely the responsibility of the new employee. The negotiated rates, contract for the move, along with any problems that may result from the move, is strictly between the employee and the moving company. The University's only involvement is payment of the agreed upon Moving and Relocation Assistance to contracted supplier. The employee is responsible for and must handle any and all claims.

Yes. The Moving and Relocation Assistance Policy does not apply to: a) individuals hired into a temporary, wage, or student position; and b) a situation involving the establishment or relocation of professional laboratories, libraries, supplies and equipment of faculty and researchers. Such payments, if any, must be paid directly to suppliers through existing University purchasing and accounts payable processes.

The policy authorizes and the Workday business process enables: 

• initiation of one-time cash payments (one-time payment type “Relocation – Taxable”)
• recording payments made by the department to third-party suppliers (e.g., moving companies) on an employee’s behalf (one-time payment type “Moving and Relocation – Non-Cash – Taxable”). 

Both of the above types are taxable benefits to the employee and must be recorded in Workday to ensure appropriate taxes are withheld.