How not to get stung by a relocation contract
Imagine that you signed a relocation contract with your employer that said they would cover your moving costs up to $10,000. So, you hired a moving company, moved across the country, and incurred a lot of expenses, based on the belief that you'd be handed a check for $10,000 at the end of it. And, imagine that when you handed the receipts to your boss, the boss said, "You know what? We'll pay $2,000 of that, but we'd rather keep the $8,000 ourselves." You'd be furious. You might take the company to court, and if you had a signed contract and you met the conditions set out in the contract, you'd win.
So, why is it when the shoe is on the other foot, you think you don't have to repay? I frequently get emails from people who have received money for relocation and now wish to quit the job before the time in the contract is fulfilled. Most relocation contracts require you to work for the new company for one to two years, and repay if you voluntarily leave, or are fired for cause. Almost all my letter writers feel it is unfair that they should have to repay the relocation costs and will go to great lengths to try and avoid it.
In fact, twice in the last month I've had people ask me if their scheme to tell the new company they are simply taking personal leave will work, when in reality they are taking new jobs. Once the allotted time has expired, they'll quit and the company will have been tricked! Both people seemed so proud of themselves for coming up with this scheme. Not only is it dishonest, it won't work.
Companies aren't required to grant you a leave of absence any time you like. In fact, most won't grant a leave of absence for anything other than medical necessity or military service. And it's not like you can walk into HR and say, "I need 6 months off," and they'll go, "Okay, cool. See you in April." Furthermore, both these people had only one year relocation contracts and so weren't eligible for protected medical leave (FMLA) even if they were genuinely sick, which they weren't.
Here is what you should think about before signing that relocation contract:
Do I really want to move? Yes, you may have exhausted your job prospects at home, and this may be your only shot, but do you really want to do this? Moving is hard, especially if you've spent your entire life in the same town and are used to being surrounded by friends and family. You have to make new friends and suddenly there's no family nearby to watch the kids.
Is my spouse on board? When you interview for a job, most interviewers won't even ask if you have a spouse or live-in partner. And, it's really none of their business anyway, but it is your business. If your spouse is hesitant about moving, you should be hesitant about going as well. You don't want to pack up the family, move 2,000 miles away, and then have to repay relocation costs because your spouse is miserable.
Lots of people see a stay-at-home spouse as a bonus when it comes to climbing the career ladder, because relocation is easy with such a spouse. While it's true, that having someone who can take care of all the little things involved in moving, and helping the children adjust to new schools, it's also true that you get to move directly into a new job, and your spouse is left alone in a new neighborhood with no clue who anyone is, and no friends. This can be very difficult and you need to know this in advance.
Have I thoroughly investigated this company? Often times, we let the company pry into our personal lives, check our Facebook pages, and call all our former employers, while we just smile and try to answer questions. Have you checked out this company's financials? Did you ask to speak with your future co-workers or future direct reports, or did you just interview with the higher ups? Remember, an interview should be a two-way street. Make it that way. Ask questions.
What will I do if I decide to leave before the contract period ends? Of course you think the new job will be fabulous, and it probably will be. But, you seriously need to consider under what circumstances you'd leave early and how you would come up with the money to repay. If there is no way on earth you could repay the relocation, go into the job knowing that no matter what, even if the boss is a horrible, lying weasel, that you'll stay for the required time.
If you decide you want to leave before your contracted period is up, here are some things to look into:
Ask the new company about "making you whole." If you're top talent in top demand, and hate you current job, you may be able to get a new employer to pay out your relocation contract for you. It's not that unusual for people at the top, so it's worth asking about if you want to leave a job before your repayment clause is up. If another company was willing to pay relocation costs, you might find that this one will too. Just keep in mind that they'll make you sign a repayment contract as well, which means you will be committed to them for one to two years as well.
Offer to pay a pro-rated amount. Some contracts require repayment in full if you leave at day 364 of year long contract. Others offer a pro-rated payment. So, if you received $10,000 in relocation assistance, and leave after 6 months, your repayment amount is $5,000. But, even if your contract requires full repayment, show up with your checkbook and offer to write a check for the pro-rated amount, right now, if they will take that in exchange. Often, companies don't want the hassle of tracking you down any more than you want to be tracked down, so they'll accept your partial payment option.
Remember, you signed a legal document. While you may feel that you were treated unfairly because the new job wasn't as fabulous as you thought it would be, your contract undoubtedly doesn't say anything about the company being required to provide you with a happy work environment. It simply said you had to work for one year or you have to repay. You signed this, so your whining makes you seem like, well, a whiner. And in the future, don't sign legal documents you have no intention of living up to.
