Financial Affairs Policies

VIII-16.00(A)

UMB POLICY ON PAYMENT OF EMPLOYEE MOVING AND RELOCATION EXPENSES

Financial Affairs   |   Approved September 1, 2017


Responsible VP/AVP

Dawn M. Rhodes, MBA


Revision History

Previously numbered VII-4.40(A), signed August 18, 2017 and effective September 1, 2017.


Purpose

  1. To implement the University System of Maryland Policy on Payment of Moving Expenses.
  2. To allow the use of UMB Funds to pay for employee moving and relocation (“M&R”) expenses when it is in the best interest of UMB to do so.
  3. To establish requirements and guidelines for payment of M&R expenses of eligible UMB employees.
  4. To provide competitive employment packages to candidates for executive, administrative, or faculty positions.
  5. To comply with Internal Revenue Code requirements relating to M&R payments.
  6. To meet federal cost regulations under the OMB “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” requirements.

Policy Statement

  1. In limited circumstances the payment for reasonable M&R expenses to, or on behalf of, a candidate selected for an executive, administrative, or faculty position may be an allowable use of UMB funds.  The amount of M&R payments for moving a household should take into consideration distance of the move, household size, the employee’s UMB salary, and the offer terms required to recruit a candidate.  Only UMB allowable expenses are eligible for payment.  Nothing in this Policy requires the payment of M&R expenses.   
  2. All offers and agreements for M&R payments must meet the following criteria:
    1. The candidate is being hired to fill an executive, administrative, or faculty position that satisfies the eligible employee criteria.
    2. The offer is deemed to be in the best interest of UMB because the candidate is recruited for a position that is difficult to fill or because a competitive compensation package for the position being filled includes M&R payments.
    3. Operational unit funds must be available and M&R payments must follow approval levels set forth by the Chief Accountability Officer (CAO) for faculty or the Chief Business and Finance Officer (CBFO) for staff.
    4. The terms and conditions of the M&R payment must be documented.
    5. The M&R expenses must be related to moving one household per eligible employee.
    6. In cases where more than one member of the household is an eligible employee who receives an offer of employment that includes payment of M&R expenses, the maximum M&R payment to both eligible employees must not exceed the highest approved M&R payment that might be offered to one of the household members.  The M&R payment may be allocated between the eligible employees of the household, but must not exceed the total actual M&R expenses for the household.
  3. M&R payments are subject to the rules and limitations set forth in Financial Services (FS) Procedure - Payment of Employee Moving and Relocation Expenses.
  4. School/department approvers may set a maximum M&R payment in an offer to an eligible employee.  School/department maximums may be lower than the limits set forth in this policy.
  5. UMB reports M&R payments to the State of Maryland Central Payroll Bureau as required by law and State policy.
  6. UMB will not pay for M&R expenses that have been, or will be, paid by another entity.
  7. An employee who has received an M&R payment will be required to refund it if any of the following occurs before the employee completes one year of service in the position held upon hire:   
    1. The employee requests and receives a transfer to another UMB department or requests and receives an employment status change (e.g. reduced hours, position change).
    2. The employee voluntarily leaves UMB employment.
    3. The employee is terminated for cause.

 

Eligible Employees:

In order to be eligible for an M&R payment the following conditions must be satisfied:

  1. The employee must be hired by UMB into one of the following employee classes:
    1. Faculty
      1. Tenured – 01  
      2. Non Tenured – 02, 03, 15
    2. Exempt Regular Staff - 33
  2. The employee’s position must be expected to exist for at least one year.

The employee must intend to complete one year of service in the position for which he or she is being hired.  

Eligible Move:

To qualify for payment, M&R expenses must relate to a move that meets the criteria set forth by the IRS, including the time and distance tests, as described in FS Procedure – Payment of Employee Moving and Relocation Expenses (link), or must be approved by the CBFO as an exception to those criteria. 

Eligible Expenses for Moving and Relocation Payments:

Payments for M&R expenses must comply with IRS regulations and related UMB policies and procedures.  UMB has established procedures (hyperlink) to conform to IRS rules.  The following requirements must be satisfied:

  1. The M&R expenses must be incurred by an eligible employee for an eligible move.
  2. The M&R expenses must be UMB allowable expenses as listed in the FS Procedure – Payment of Employee Moving and Relocation Expenses.   

Approval:

  1. It is the responsibility of each department to obtain appropriate approvals before making an offer to a candidate that includes consideration for M&R expenses.
    1. Required approvals for payment of M&R expenses of faculty are established in individual schools.
    2. Required approvals for payments of M&R expenses to staff are established by the Department of Human Resource Services (HRS).  
  2. The CBFO’s approval is required for any offer of M&R payments to staff if the offer is equal to or greater than $15,000 per household.  The CAO’s approval is required for any offer of M&R payments to faculty if the offer is equal to or greater than $15,000 per household.
  3. The President’s approval is required for offers to pay M&R expenses to Deans and Vice Presidents and other officers reporting directly to the President.  

Applies to:

UMB Employees

Authorized Affiliate Employees with fiscal authority or with responsibilities in the UMB employee recruitment process

Prospective UMB Employees 

Definitions

Authorized Affiliate Employee - Person employed by an entity that has a relationship with UMB authorized by the Board of Regents or by law, e.g., faculty practice plan organizations, University of Maryland Baltimore Foundation (UMBF) and other affiliated foundations, recognized incorporated alumni associations, recognized affiliated business entities, University of Maryland Medical System/University of Maryland Medical Center, and other University System of Maryland institutions.  An Authorized Affiliate Employee is responsible for the administration and reporting of UMB resources.

Employee Class (empl class) -  A sub-category of employees that is used by the State of Maryland and USM to categorize employees based on common application of labor laws, fringe benefit eligibility,  and university or state policies. Every employee in the UMB payroll system is assigned to a specific empl class for each job the employee holds.

Household- Individuals, whether or not related, residing in the same physical structure.  This Policy applies to household members who move from the same home to the same home.

Moving and Relocation Payment - Payment for reasonable and allowable expenses associated with moving household goods and personal effects and traveling (including lodging but not meals) to a new home. IRS rules determine the tax treatment for moving and relocation payments.

State of Maryland Central Payroll Bureau (CPB) - The State of Maryland agency responsible for issuing paychecks and processing tax forms for UMB.

UMB Funds- All funds administered by UMB, regardless of fund source.  UMB funds include State appropriated general funds, tuition, fees, and other income, as well as auxiliary funds, revolving/discretionary funds, Designated Research Initiative Funds, gifts, contract or grant revenues, and other restricted funds.

Scope and Exceptions

Scope

This Policy applies to reasonable and eligible costs incurred by new UMB employees to move personal effects and household goods between locations within the United States of America.  The requirements stated in this Policy apply when reimbursement or payment is being requested directly from UMB.  This Policy also applies when reimbursement or payment is being requested by a UMB employee from a third party (e.g., authorized affiliate) and UMB will reimburse the third party.

This Policy does not cover expenses incurred to:

  • Interview at UMB.
  • Move a laboratory or office.
  • Expatriate employees related to moving to and from work locations outside the United States.

Exceptions/Request Process:

Exceptions to this Policy must be approved in writing by the CBFO.   Requests may be submitted to the University Controller using the Policy or Procedure Exception Form available on the Financial Services website.  Requests must be signed by the Dean/Vice President or the Dean’s/Vice President’s designee. 

Roles and Responsibilities

Financial Services is responsible for establishing procedures to promote compliance with this Policy and IRS regulations.                   

All personnel involved in recruiting or hiring new employees and all personnel involved in approving or processing payments are required to follow the rules set forth in the FS Procedure - Payment of Employee Moving Expenses.

Employees who improperly submit and approvers who improperly authorize the use of UMB funds may be subject to disciplinary action and/or criminal action. Payments for M&R expenses using UMB funds that are not in accordance with this Policy must be reimbursed to UMB from external funds (e.g., Foundation funds or personal funds).

An Authorized Affiliate Employee who does not follow this Policy may lose the privilege of being an Authorized Affiliate Employee and will have UMB fiscal authority terminated.

Downloads

See UMB Financial Services Procedure - Payment of Employee Moving and Relocation Expenses

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