International Relocation Policy Overview & Options …
Policy Introduction
The purpose of a Relocation Policy is to ensure that employers provide consistent and fair
support to an existing or new employee who is required to relocate for business reasons. It
is important to ensure that employees are neither advantaged nor disadvantaged through
the process of relocating. The relocation process and entitlements should be known by the
employee prior to the relocation commencing and the cost incurred should be reasonable
and relevant to the organisation and industry sector.
It is well known that cost of a failed assignment can be up to 3x the annual salary of the
relocating employee and that the primary reasons for a failed relocation are generally family
issues and a lack of family support. It is in everyone’s interest therefore to minimise the
risk of a failed relocation. Getting families settled into their new community and the
employee into the new workplace (100% productive) as quickly and cost effectively as
possible is the primary consideration.
Policy Definitions
The following terminology applies to various options and types:
Assignment
Short Term Assignments are less than 6 months duration and usually
unaccompanied. Long Term Assignments are of 6 months to 3 years duration.
During an Assignment, the relationship betw3een the employee’s home country ad
the home country employer continues. The home country employer is responsible
for placing the employee in at least a similar position at the end of the term.
Transfer
The permanent relocation of an employee without any pre determined commitment
to tenure of the position. Relationship with the home country is severed.
Home Country
The home country is the country from which the employee embarks from.
Host Country
The country where the employee is relocated to.
Employee, Secondee, Assignee
The person to whom the international policy applies.
Tax Equalisation
The employee will not be advantaged nor disadvantaged through taxation because
of a transfer or international assignment.
1
Policy Principles
The following guiding principles form the basis of a policy document:
Needs
The process of determining an international assignment is needs driven and, as such
must first and foremost meet the business needs of the Company.
Understanding
Both the employee and accompanying partner/dependants must fully understand
what is involved in relocation, before any commitments are made.
Neutrality
Employees on international assignment should neither significantly gain nor
significantly lose financially as a result of the Assignment.
Competitive
The Company Policy should be comprehensive, competitive and flexible in order to
treat employees fairly and also allow for individual circumstances and considerations.
Attractive
The Company Policy can create an incentive to attract the employee to the new role.
It aims to protect purchasing ability and within reason relieve the Employee of
additional costs arising from the relocation.
Family
The Company Policy should be family sensitive and cater to personal and family
circumstances.
2
International Relocation Summary Schedule of Assistance Options:
INTERNATIONAL RELOCATION
SUMMARY SCHEDULE OF ASSISTANCE
Relocation Type 
Short Term
Assignment
Long Term
Assignment
Permanent
Transfer
Pre Departure Briefing



Medical Examination



Cultural briefing



Case-by-case
Case-by-case
Case-by-case
Medical cover


30-90 days
Insurance cover


In transit
Familiarisation
Case-by-case
Case-by-case
Visa/Work Permits



Tax consulting services



Travel to new location



Shipment of personal effects
If cost effective


Temporary Accommodation
If applicable


Long term accommodation
Apartment


Utilities
Case-by-case
Case-by-case

Expatriate allowance (one off)
(5% of base)
(10-15% of base)




If applicable
If applicable

Settlement assistance



Educational reimbursement


No
Transfer Grant (incl. school uniforms
etc)

Case-by-case

Host location vehicle
Case-by-case
Case-by-case

Home Leave (R&R)
Case-by-case


Emergency leave



Home country residence


Disposal Fees
Services

Language instruction
Preview Visit
Weekly “cost-of-living allowance”
Location allowance
3
Assignment Policy Introduction (Recommended Options)
Purpose
The purpose of this document is to present the International Relocation Assignments
Policy. The Company recognises the importance of staff retention through the
application of best practice relocation procedures.
Policy Status
This document is a policy document and does not form a component of an
employee’s terms and conditions. The policy will generally be applied consistently
and equitably to all employees although the Company may deviate from time to
time.
Overview
There is a significant financial cost to the Company and disruption to the employee
and family associated with international assignments.
The Company recognises that there is a degree of stress resulting from inevitable
uncertainty surrounding the process of developing an international assignment. The
Company therefore will do all it can to ensure issues are resolved promptly and in a
way that provides certainty.
While on assignment, employees are expected to adapt to the local culture by living
among the locals, and by making an effort to understand the local customs in their
daily business and personal lives.
It is also recognised that there are potentially large benefits in relation to the
international experience gained by staff that are located offshore for long periods.
Responsibilities
All employees of the Company will be given position descriptions that detail their
accountabilities, along with objectives and written terms and conditions of
employment applicable to assignments.
Short Term
During a short term assignment the home country is the employer responsible.
Long Term
During a long term assignment, the host country is technically the principal employer
of the assignee, but the home company retains de facto ownership and
corresponding responsibilities.
During the term of an assignment, should the Assignee accept a permanent position
with the overseas company, there is no guarantee of employment with the home
Company or repatriation should the Assignee elect to return there.
Status
4
During the term of an assignment, should the Assignee accept a permanent position
with the overseas company, there is no guarantee of employment with the home
Company or repatriation should the Assignee elect to return there.
Employees
Honesty and personal integrity are the foundation of the Company’s values. Each
employee of the Company who accepts an international assignment represents the
Company and is expected to conform to these values.
Among the specifics, the Company expects that employees on international
assignment will:





comply with local laws
comply with all regulations regarding visa, work and residency permits
transfer funds or currency in strict accordance with the requirement of any
country
file timely personal tax returns (with assistance provided through the Company)
which accurately reflect the full and proper amount of tax liability to the
employee’s home country and/or the country of assignment
declare goods imported into any country honestly and correctly
Immigration
Every offer of an overseas posting is conditional upon the employee (and any
accompanying family) having a passport valid for at least 18 months beyond the
expected end of the posting. Accompanying children must hold their own
independent passport and not be included on the accompanying parent’s passport.
Most countries require a work permit and/or visa for non-citizens to enter or be
employed in the country. The international relocation of an employee will take place
only when the employee has received the necessary approval and documentation
from the government at the host location.
The Company will provide assistance with securing a work permit/visa for the
employee.
5
Short term Assignments Policy Options
Definition
Short term assignments are for less than six month’s duration and are generally
unaccompanied.
Introduction
For short term international assignments the following specific policies apply.
Medical Examination
The Company must be satisfied that the employee and any accompanying family are
medically fit for life in the host location, comply with any health standards laid down
for entry, and have had any required vaccinations and inoculations. A recommended
list of vaccinations will be provided within the cultural briefing information.
Employees and accompanying spouse and children are required to have a medical
examination prior to relocation, at the Company’s expense. This examination would
be by the Company’s designated independent practitioner who would supply the
Company with a report which, while respecting the employee’s privacy, would
indicate whether the employee was fit for the proposed international assignment.
The offer of a short or long term posting will remain provisional until the required
steps have been taken (any treatment necessary should be carried out prior to
taking up the contract).
The Company retains the right to withdraw an offer of short term assignment on the
basis of a medical report recommending that the person is not fit for international
assignment.
Pre Departure Briefing
After commitment in principle to an international assignment and before the starting
date, there will be systematic briefings on the relevant policies, terms and
conditions, tax implications and life in the host location. The briefing includes the
following:















The nature of the position
The responsibilities of the position
Project/assignment requirements
The business hours/days of host location
Work contacts
Payment arrangements – frequency, currency (NZ or host location)
Taxation issues
Currency issues
General employment conditions
Handling job related problems
Dealing with local business and government etiquette, cultural differences and
mannerisms
Country risks
Security issues
Emergency trips home to New Zealand
Documentation
6

Power of attorney
Family Status
For all assignments each case will be considered according to circumstances to
determine whether the employee will be accompanied or unaccompanied. Early
consideration should be given to this matter when planning the assignment.
Remuneration
The employee will continue to receive the home base salary and will remain on the
home country payroll for the duration of the assignment.
Expatriate Allowance
The Company will pay an Expatriate Allowance as an incentive premium for short
term assignments.
This will usually be a “Disturbance” allowance, which compensates for expenses over
and above those which are expressly met by the Company and will be calculated
taking into account the circumstances of individual assignments.
Note: We recommend that 5% pa (irrespective of the country) of the gross base
salary (actual, for the term of the assignment) be paid as a lump sum via home
country payroll on the completion of the assignment.
Weekly Cost-of-Living Allowance
The Company will pay a “Full Self Catering” allowance as a cost-of-living allowance,
which will be calculated taking into account the circumstances of individual
assignments.
Note 1:
This is designed to cover local day-to-day expenditure; it includes groceries, meals
prepared in the apartment, some meals out and expenses such as drinks,
newspapers, taxis and public transport.
Note 2:
The allowance is quoted in host location currency and should be paid during the
assignment – usually into a host location bank account or through an approved
credit card.
Note 3:
The allowance should normally be approved as non-taxable subsistence payments.
Location Allowance
A location allowance may be paid should there be a significant difference between
the home country and the overseas location on the basis of culture, climate,
isolation, security, accommodation, availability of medical, social and transport
facilities, and language.
The allowance varies between countries and takes the form of a fixed percentage
applied to the national home salary.
Taxes
7
The Company will select an International tax-consulting firm, to provide specified
services to internationally assigned employees. The Company will pay for the costs
of these specified services if provided by that international tax-consulting firm.
The Company will include as part of a contractual agreement that tax equalisation
will apply.
Shipment of personal effects
Shipment assistance may be provided and this will include assistance with
accompanied personal items and excess baggage allowance.
This entitlement should be balanced against the following factors:




duration of shipment in transit
cost of shipment and return shipment vs cost of storage in New Zealand and
furnished accommodation
cost of insurance
a policy insert detailing that the volume of items shipped will not be significantly
exceeded by the volume of items returned at the completion of the assignment
Accommodation
The Company will meet the cost of “appropriate” rental accommodation, which is
usually an apartment. This will usually be provided through the services of a
specialist relocations agency.
A budget for a “reasonable” standard of
accommodation will be set by the Company.
Utilities
The provision of utilities is very much a variable on location as there can be
advantages and disadvantages in the way payment is made in relation to taxation
for the individual, and also relating to the circumstances of the assignment, ie joint
venture. Therefore the provision of utilities should be considered on a case-by-case
basis in conjunction with taxation guidance.
Cultural Awareness
It is important to ensure that the employee and family are sensitive to matters of
culture. Preparation should include reading and, where possible, a formal cultural
briefing will be provided at the Company’s expense.
Travel to new location
The company pays travel expenses for the employee and accompanying spouse and
children. Reasonable en-route expenses for meals, accommodation, tips and other
necessary items are reimbursed.
Employees and accompanying spouse and children using international air travel are
entitled to Economy/Business Class in accordance with approved policy from time to
time.
Annual Leave
8
The employee’s annual leave entitlement continues and is not affected by the
assignment. Travelling time is not included as annual leave.
Home Leave
Home leave entitlements will be considered on a case-by-case basis.
Clarification will need to be given in relation to:
 Number of visits in respect to assignment length
 The use of economy or business class fares
 Whether employees may elect a destination other than NZ
 Whether the assistance extends to spouse/family
Home Leave arrangements need to be agreed in writing in advance of bookings
being made.
Insurance cover
Comprehensive insurance cover will be provided by the Company’s Corporate Travel
Policy which includes:








Personal Accident
Hijack and Detention
Medical and additional expenses including evacuation
Loss of deposits
Baggage, travellers cheques, travel documents and credit cards
Money
Expatriation
Personal Liability
The insurance cover shall be valid continuously for the whole of the employee’s
absence from New Zealand.
Host location vehicle
The individual circumstances of each assignment will be considered to determine
whether a vehicle is provided.
Home Country residence
For short term assignments there is no provision for home residence assistance, (for
example in relation to house sitting, care of pets, etc)
9
Long term International Assignments Policy Options
Definition
Long Term Assignments are job focused assignments, between six months and three
years duration.
Remuneration
Employees sent on overseas assignments should not be disadvantaged, from a
remuneration point of view.
The Company will maintain a notional home salary as the basis for preserving salary
relativities within the home company, and as a guide to the level of re-entry. The
notional home salary will be the base gross salary. This is the base home country
salary, which would be paid for equivalent work and responsibility.
The company will provide an Assignment salary being the remuneration applicable
for the overseas assignment in the host location adjusted by the cost-of-living
difference between the home country and host location. It is a net (after tax)
amount, initially quoted in home currency. The employee takes with them the
“spendable” portion of salary.
Assignment Salary review
The assignment salary may be reviewed after any changes to the national home
gross salary, such as an annual salary review or a promotion. Home and host
spendable incomes and the Cost of Living Index are reviewed regularly to take
account of any changes in exchange rates, or the cost of living.
Expatriate allowance
The expatriate allowance is usually a fixed percentage of the notional home salary
applicable to all overseas postings. The expatriate allowance is a one-off incentive
element paid irrespective of the country of assignment as an inducement to live and
work overseas. The expatriate allowance is used in several instances:



As an incentive to accept the position;
To acknowledge disruption to home life;
Inducement to remain with the Company.
Based on the notional home country salary the expatriate allowance is recommended
as follows:
A one-off amount of:
 10% of annual base salaries up to $150,000
 15% of annual base salaries over $150,000
Half the allowance is paid as an incentive at commencement of the assignment, with
the balance paid on return to the home country at the conclusion of the assignment.
Transfer Grant
10
The Company may, depending on the circumstances of the assignment pay a grant
to cover additional out of pocket expenses.
11
Benefits
Superannuation
Where applicable and feasible, the Company will retain the employee in the home
country’s benefit programmes as part of the total remuneration package: eg
Superannuation Fund including disability insurance, etc.
In countries where it is compulsory for the employee to join the local government’s
scheme, the Company will ensure that employees are not out of pocket as a result of
this process nor should employees make a windfall profit.
Medical Assistance
The company will provide as part of the employee’s total remuneration package,
benefits at the host location which are comparable to the benefits at the home
location. This may include having to transport people out of the host location.
Holidays
Employees on International Assignment will be subject to the same leave days in
terms of the employee rules and regulations applicable to all employees in the home
country. Public holidays will be applicable in keeping with the host location.
Preview Visit
Prior to a formal offering being made, a Familiarisation Visit for the anticipated
employee may be required. This may also be used for Househunting.
The Company will reimburse expenses for round trip air or ground transportation,
accommodation and a rental car, including petrol, for the employee and
accompanying spouse for up to five (5) days, excluding travel time. These days will
be taken as Company time for the employee.
If the Familiarisation Visit is combined with a home search the Company will
reimburse expenses as detailed in the previous paragraph for a total of ten (10)
days, excluding travel time.
The employee and accompanying spouse using international air travel are entitled to
Economy/Business Class in accordance with the Company’s approved policy from
time to time.
Medical Examination
The Company must be satisfied that the employee and any accompanying family are
medically fit for life in the host location, comply with any health standards laid down
for entry, and have had any required vaccinations and inoculations. A recommended
list of vaccinations will be provided within the cultural briefing information.
Employees and accompanying spouse and children are required to have a medical
examination prior to relocation, at the Company’s expense. This examination would
be by the Company’s designated independent practitioner who would supply the
Company with a report which, while respecting the employee’s privacy, would
indicate whether the employee was fit for the proposed international assignment.
12
The offer of a short of long term posting will remain provisional until the required
steps have been taken (any treatment necessary should be carried out prior to
taking up the contract).
The Company retains the right to withdraw any offer of long term assignment on the
basis of a medical report recommending that the person is not fit for international
assignment.
Pre Departure Briefing
After commitment in principle to a long term assignment and before the starting
date, there should be a systematic briefing on the relevant policies, terms and
conditions, tax implications and life in the host location.
The briefing includes the following:
















The nature of the position
The responsibilities of the position
Project/assignment requirements
The business hours/days of host location
Work contacts
Payment arrangements – frequency, currency (NZ or host location)
Taxation issues
Currency issues
General employment conditions
Handling job related problems
Dealing with local business and government etiquette, cultural differences
and mannerisms
Country risks
Security issues
Emergency trips home to New Zealand
Documentation
Power of Attorney
Manager Responsibility
The pre departure briefing should include a meeting with the Manager who will be
responsible for management of career planning and to establish arrangements for
keeping in touch during the posting.
Insurance Cover
The Company will provide insurance cover which will include emergency/unforeseen
medical expenses and sometimes, according to the country, evacuation expenses,
and will indemnify all employees and accompanying family.
Private Insurance
The employee is responsible for checking the effect that moving abroad has on any
of their own insurance, and in particular any relating to home country
accommodation. Unless otherwise agreed, the Company does not compensate for
any consequential increase in premiums.
13
Household goods / personal effects
The Company will pay the normal and reasonable costs of moving and insuring the
employee’s personal effects, and those of his/her dependents, to the international
location.
Items such as boats, heavy equipment, pianos, art objects, collectibles etc. requiring
special handling will not be moved at the Company’s expense, unless otherwise
agreed.
The Company will not reimburse quarantine and/or duty expenses for luxury items
such as liquor, wine and perfumes.
Employees (whether single or married) going on a long term International
Assignment are eligible to ship up to 167kgs (ACW) of household goods/personal
effects by air and 1 x standard 20 foot shipping container by surface shipment.
Storage of Goods
Storage of goods during the move only, is also reimbursed by the Company when
necessary.
Household Pets
It will usually be the employee’s responsibility to meet the costs associated with
transporting household pets, unless the Company agrees otherwise.
It will be the employee’s responsibility to identify regulations and requirements
necessary for the entry of their household pets to the international location.
It will also be the employee’s responsibility to make all the necessary travel
arrangements for the importation of household pets.
Motor Vehicles
The Company will not ship motor vehicles from one country to another.
Temporary Accommodation
The employee and accompanying family will be granted up to five days
accommodation when packing household effects, prior to departure.
All employees and accompanying family members are permitted a period of up to
three weeks of temporary living in the host location, provided they had not had a
house hunting visit.
The following may be charged against the Company, if supported by receipts:
Accommodation (including breakfast & evening meals) subject to prior joint approval
by the Company and the employee. Any other expenses incurred in accordance with
the policy
14
Should appropriate accommodation not be found during this period or delay be
encountered with the arrival of household goods, the period of temporary short term
accommodation may be extended for a limited term given prior approval.
Travel
The Company pays travel expenses for the employee and accompanying spouse and
children. Reasonable en-route expenses for meals, accommodation, tips and other
necessary items are reimbursed.
Employees and accompanying spouse and children using international air travel are
entitled to economy class travel.
Travel for Children
If the employee has dependant children who do not accompany the employee on the
International Assignment, the Company will pay for round-trip economy class air
fares for each of them up to two visits per year to the host location.
This policy provision, which should be agreed in advance, applies to children who
live with their parents and/or to children who are fully dependent on their parents
for financial support.
Settlement
The company’s objective is to assist the employee and accompanying family
members settle into permanent accommodation and the local community as quickly
and effectively as possible.
To support this objective the Company will provide professional Settlement Services
as required and deemed necessary. These services could include but are not
restricted to:



Home Search
Education consultation and search
Partner Support (career counselling, gym membership, etc)
Accommodation
Accommodation (normally rented) is provided by the Company, subject to Company
control of the cost. The choice of accommodation must therefore have the
Company’s prior approval, and might in some cases be prescribed by the Company.
Support and research assistance will be provided either during a Preview Visit or by
appointing a relocation company to assist.
Utilities
The provision of utilities is very much a variable on location as there can be
advantages and disadvantages in the way payment is made in relation to taxation
for the individual, and also relating to the circumstances of the assignment, ie joint
15
venture. Therefore the provision of utilities will be considered on a case-by-case
basis in conjunction with taxation guidance.
Home Leave
The Company grants home leave to each employee who is on a long term
International Assignment.
Two economy class return air fares are granted for each twelve months of
International Assignment completed.
There are two purposes for the home leave:
 For the employee to maintain communication with the Company and conduct any
other business that is necessary
 For the employee and family to maintain their identity with the home country
Home leave will be taken as holiday time for the employee (part of normal leave
allocation), excluding travel time.
Personal Matters
Personal Investment
The Company does not assume responsibility for losses of funds on personal
investments or losses arising from currency exchange rate fluctuations affecting the
International Assignee’s personal investments. Personal investments include
purchase and sale of real estate.
Sales of Home prior to Relocation
The Company does not assume any liability if the employee decides to sell his/her
home country home prior to relocation.
Cultural Awareness
It is important to ensure that the employee and family are sensitive to matters of
culture. A formal cultural briefing will be provided at the Company’s expense prior to
the assignment (see Pre Departure briefing).
Language Lessons
Employees and family members relocating to a country whose language they neither
speak nor understand well are eligible to be reimbursed for the cost of a reasonable
amount of language instruction for each relocating family member.
Purchase / Sale of Home (Host Location)
The Company will not provide any assistance with the purchase / sale of a home at
the host location.
Education Reimbursement
Actual and reasonable costs for school fees, tuition, books, uniforms and
transportation are reimbursed. Any other costs associated with schooling are not
reimbursed.
Emergency Leave
Emergency leave will be granted to the employee and/or spouse for five days of
Company time, excluding travel time, in cases of serious illness or death of the
following:
16






Parent/step parent
Child/step child
Employee’s spouse
Brother/step brother
Sister/step sister
Grandparents
The Company will reimburse reasonable and customary expenses for round trip air
travel or ground transportation, providing that the travel is back to New Zealand or
Australia.
Death in a Foreign Location
In the event of death of an employee while on International Assignment, or of a
dependant, at the foreign location, the Company will pay the expenses in the host
location associated with the returning home for the burial/cremation, whichever the
employee or spouse wishes, provided local laws permit.
If the remains are to be returned to the home country or to another location
designated by the family, the Company will assume the costs of shipment, the
required documentation and transportation by regular sea or air service to an
undertaking establishment designated by the family.
In the case of the Employee’s death, the family will be relocated to the home
country under the repatriation provisions of the International Policy.
Taxes
The Company will pay for tax-consulting services to support the internationallyassigned employee, provided the services are by the international tax-consulting firm
approved by the Company.
Tax Orientation
Employees who are transferring internationally are eligible for, and must receive, a
tax orientation in their home country prior to the start of the assignment and at the
host location to ensure that they are aware of their tax responsibilities in both
locations.
Tax Preparation
Employees on a long term International Assignment are, eligible to have income tax
forms for both the home country and host locations prepared annually by the
Company’s approved international tax-consulting firm.
Tax Liability
Employees accepting a long term International Assignment are likely to experience
differing personal tax liability.
The Company has a policy of tax equalisation, which means that the Employee will
not be advantaged or disadvantaged through taxation because of the assignment.
Early Return
The Company may deem it appropriate to return an employee to the home country
prior to the planned date of return based on changing business needs or
17
performance issues occurring during the term of the assignment. In addition, early
return may be initiated by the employee, based on personal or family concerns of a
serious or imperative nature.
Repatriation
Employees will normally return to their home country at the conclusion of the long
term Assignment.
Employees will return to the home country at the home country Company’s base
salary (actual or reference) at the time of repatriation.
Upon the employee’s return the Company will endeavour to provide a position
comparable with what the employee left to take up the overseas assignment.
In the event that the Company deems there are no comparable positions available in
the home country, and no alternative destination can be mutually agreed upon, the
employee may be made redundant.
The redundancy provisions will be the same as those in the employee’s current
existing employment agreement. Such payment shall be calculated on the home
country annual base salary.
Resignation
If an employee on long term International Assignment voluntarily resigns from the
Company, the Company will be responsible for relocation assistance on a prorated
basis as follows:
Resignation at midpoint of assignment
Resignation at completion of assignment
:
:
50% of relocation costs
100% of relocation costs
The Company may at its discretion, prorata costs according to this guideline.
Termination
Employees on an International Assignment may be dismissed from the Company at
the host location as a result of violations of Company rules or illegal acts in the host
location.
The dismissed employee and any accompanying family members will be relocated
back to the home country and will receive only the following relocation provisions:



Travel to the home country (Economy Class)
Cover through the Company’s Corporate Travel Insurance
Personal effects shipment and Marine Transit Insurance Cover
18