Articles & Whitepapers

NEI Service Partner Spotlight - Furnished Quarters

This month’s NEI Service Partner Spotlight is on Furnished Quarters and how they serve the dynamic needs of today’s temporary housing needs across multiple countries.

Read the whitepaper here.

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Attention to Detail

Moving can be stressful for families in the best of situations, but one of the major considerations for accepting a relocation involves the impact to one’s children. For companies relocating families with a “special needs” child, the situation can be particularly challenging.

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More Preparation

There are 7.2 million students aged 3-to-21 studying under the Individuals with Disabilities Education Act (IDEA) in the U.S. today, making up about 15 percent of all U.S. public-school students.

Though awareness of child learning, health disabilities and other special education needs have increased dramatically, relocating loved ones with such needs usually requires more preparation and attention to detail to ensure the right support is provided before, during and after a transition.

Additionally, because health information about an employee / family is private, companies may never even know if relocation candidates turn down offers because they were either unsure if their child’s unique requirements could truly be met in the destination or if they would have access to necessary special needs support services similar to their current network of providers.

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Active Listening Makes a Difference

NEI has considerable experience assisting families with special needs children, be it learning disabilities or health concerns, and we navigate each situation to develop the best solutions. In fact, our experience led us to develop the You Allowance as a way for companies to provide additional support for unique situations just like this.

Our Account Executives are trained to conduct a detailed Family Needs Assessment to learn each relocating family’s priorities, needs and interests. They also learn how to recognize unspoken needs or concerns that could lead to employee/family reluctance to relocate.

NEI and client-approved service partners can provide guidance to families and work with resources in the destination to create a pre-move strategy and timetables to maximize the family’s time and address their home finding trip concerns. The following information provides two case studies involving the need for special assistance.

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Short Term Rental with a Pool for Therapy

NEI worked with a family with two children moving from Missouri to New Jersey, one of whom had special needs. The family’s original intent was to purchase a home, but due to other circumstances they had to secure temporary living for six months with one requirement: a pool for the child’s therapy, as well as a separate living space for him.

Identifying a real estate agent who specializes in short-term rentals was NEI’s first step. The agent quickly located a private residence that included both a pool and the exact accommodations requested so the child’s routine wouldn’t miss a beat.

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The Perfect Destination School

With the client’s approval, NEI partnered with a fee-based service partner to help a transferee find the perfect school for his child with autism when he was needed for an Atlanta to Los Angeles relocation. The service partner set up family appointments to visit each school based on the family’s unique needs, helped with the interview process, consolidated all documentation from the child’s previous program in Atlanta and even helped with school admissions paperwork.

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Planning, Research, Preparation

For families deciding to relocate with a special needs child, it is important to start researching and planning early. Gathering all documents necessary to obtain the services and support needed in the new location is critical. Letters from teachers, therapists and other professionals who currently work with the child should be requested as quickly as possible to save time and stress.  

Simultaneously, NEI provides links to school information in the destination city on our personalized NEI Cities website and, if client-approved, will recommend a contact for professional school search support. This is considered a best practice with NEI coordinating and managing expert service partners to advise employees on available schools, curriculums, and answer all questions. Here is a great example of how this type of support can help:

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Supporting a Child Not Happy about the Relocation

NEI’s service partner worked with a family who was going on a house hunting trip to South Carolina. The family’s 10-year-old autistic son was resisting them – at every step – and was very unhappy. However, he had a new passion: martial arts. Our service partner located several martial arts studios and recommended the family trip include exposure to the different facilities and instructors. Their son tried three studios and, from that point on, he was “sold” on their relocation, even volunteering to help with decisions regarding the move.

If professional assistance is not offered by an employer, transferees are encouraged to contact destination area schools well in advance to discuss their child's needs and share copies of any individualized education plans. It is vital to speak to school counselors in the new location to understand the options a school offers.

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Breaking the News

Acquainting a special needs child with the idea of relocating is important. Experts encourage families to:

• Announce the move with plenty of advance warning: weeks for a younger child; a month or more for teenagers
• Make a visual schedule of the move process
• Involve the child in planning and packing
• Show where the family is headed by viewing online photos and videos of their destination’s neighborhood, school, playgrounds, parks, library, and points of personal interest to the family.

The smallest details about transportation of household goods and temporary living for the families of special needs children cannot be overlooked. NEI worked with one family having very specific needs:

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Exceptions for Household Goods and Temporary Living

During the NEI assessment call, an employee indicated he had a child with special needs and one of his biggest worries about relocating concerned the transfer of his medical equipment and temporary living accommodations. Our Account Executive:

• Secured a client exception to move items that were a necessity for the child, including a hoist chair, hospital bed and automated wheelchair
• Worked with the client and temporary housing partner to accommodate the family in an Airbnb home environment, rather than a corporate apartment
• Arranged for installing a temporary wheelchair ramp at the home
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Patient, Proactive and Compassionate

Relocation success is so much more than just selling a home and moving household goods – it affects the entire family and requires everyone’s buy-in for the move to be a success.

Understanding how important it is to be patient, proactive and compassionate for all relocations, but especially for those which can be more complicated, has been engrained in our culture at NEI since our founding.

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If you would like to discuss proactive policy changes, such as our You Allowance, or options to help families with special needs children, please reach out to your NEI representative.

Nations Revamp Immigration for a Skilled Workforce

Global competition to attract top talent and skilled labor is heating up as countries look for every edge to attract the best foreign workers and students. To that end, countries are shifting immigration policies to favor the best candidates and help solve internal economic and demographic challenges.

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Intense Country Competition

The 2023 Hiring & Workplace Trends Report produced jointly by companies Glassdoor and Indeed finds there will likely be a persistent tight supply of workers for years to come in key economic sectors and without sustained immigration, an increase in labor productivity or a focus on attracting workers, many industrialized countries will continue to struggle with a tight labor market.

Countries are implementing new programs to not only understand where new talent may come from, but also which countries’ talent pools they can best attract and then changing immigration requirements to support this.

Successful governments are implementing four key strategies to attract international talent, according to the Mauve Group, a provider of Global Business Solutions and Consultancy Services:

1. Introducing new work visas

2. Shifting immigration policies

3. Targeting incentives for specific occupation shortages

4. Offering financial incentives and better benefits

Consider this small sample of recent country-specific schemes to attract talent:

• The UK feels its High Potential Individual (HPI) visa route will attract the "brightest and best" early in their careers allowing identified talent permission to stay in the UK for at least two years.
• Hong Kong says its “Top Talent Pass Scheme” will raise its international competitiveness by offering them a two-year visa that allows them to work, establish a business or change employers in Hong Kong.
• Finland’s “Talent Boost” program aims to attract high-skilled workers from Vietnam, as well as Brazil, Turkey, and India.
• Canada’s New Brunswick province hosted recruitment sessions for candidates of specific countries, such as Nigeria, the United Arab Emirates, and Argentina.
• Bahrain’s Golden Residency Visa helps international workers stay in Bahrain permanently.
• The German government announced plans to make it easier for IT workers from India to obtain German work visas.
• The United Arab Emirates extended its Golden visa program to attract skilled foreign talent -- professionals, scientists, and researchers - to live, study, or work in UAE for 10 years.

Clearly, a post-pandemic global battle for talent and immigration shift is underway, one that will be critical to the future success of many countries as demographics and economies evolve.

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Country Case Study: Japan

Every country’s immigration scheme has their own specific and highly unique details for candidates to qualify for entry and attention to details cannot be emphasized enough.

Consider the example of Japan, which ranked 41^st of 63 economies in 2022 for attracting and retaining talent. To improve its position in the high-stakes global talent game, it recently introduced two new visas, the J-Skip and the J-Find:

• The “J-Skip” Visa, aimed at attracting special, highly skilled professionals to Japan.
• Requirements: Individuals who hold at least a master’s degree or 10 years’ relevant work experience with an annual income of 20 million JPY ($143,530 USD) or more can apply for either a Highly Skilled Professional (i)(a) - advanced academic research activity or a Highly Skilled Professional (i)(b) - advanced specialized/technical activity. Individuals with 5+ years of practical experience in business management with annual income of 40 million JPY ($287,060 USD) or more can apply for a Highly Skilled Professional (i)(c) Advanced business management activity.
• The “J-Find” Visa, designed for recent graduates of highly ranked universities to pursue job or entrepreneurship opportunities in Japan. They will be allowed to stay in Japan for up to two years for job hunting and preparation for starting a business. They can also accompany their dependents, such as spouses and children.
• Requirements: Status of residence will be granted by Japan to graduates of a university ranked in the top 100 of at least two of the following three World University rankings* within the last five years and have an amount of deposit and savings of at least 200,000 JPY ($1,435 USD) for living expenses when applying.  * QS Top Universities, the Times Higher Education World University Rankings, and Shanghai Jiao Tong University’s Academic Ranking of World Universities.

Further supporting this effort and a talent pipeline, Japan’s Council for the Future of Education Creation also recently announced an initial proposal to further “internationalize” higher education with the goal of attracting over 400,000 foreign students from overseas institutions and encouraging them to work in Japan after they graduate.

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Global Talent and Immigration Shift

It is clear countries will continue modifying visa and immigration laws to help boost their future economies and compete as popular destinations for global talent.

If you would like to discuss this or other immigration or global mobility trends or company needs, please contact your NEI representative.

The above article is provided for informational purposes only. Please consult your tax, legal, immigration or accounting advisors before making any decisions or transactions.

Inflation Decreasing, but Insurance Increasing

On the heels of high inflation costs, homeowners across the U.S. are feeling new financial pain when receiving their annual home insurance renewal bills.  

This in part due to rising costs of materials to repair or replace homes – the values of which have risen 37 percent nationwide over the last three years – and in part due to extreme weather – hurricanes, tornados, ice or hailstorms, and wildfires.

Analysts expect further insurance rate hikes this year and homeowners are feeling the impact. As reported in the New York Times, American homeowners have seen their bills for property coverage grow by 21 percent on average since 2015 with some individual state averages, like Florida, reaching as high as 57 percent with another 40 percent increase anticipated next year!

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Home Insurance Rate Factors

Rates can vary significantly based on where a home is, how much coverage one needs, and personal factors of an individual, like one’s credit and claims history.

According to Bankrate.com rates for $250,000 in homeowner coverage, by state, averages from $3,659 per year in Oklahoma to $382 per year in Hawaii. Although the national average is near $1,500 per year, it is a bit deceiving due to the wide swings in premium costs.

• The top five states with the highest average rates include Oklahoma, Kansas, Nebraska, Colorado, and Arkansas.
• The bottom five states with the lowest average rates include Hawaii, Vermont, Delaware, Utah, and Oregon.

High risk has made insurance companies pull back in event-prone areas. Insurance companies State Farm and Allstate recently stopped accepting new homeowner insurance applications in California citing risks from catastrophes. In Florida, ten insurers became insolvent in the last two years due to losses and more than a dozen others either left the state or placed moratoriums on writing new business.

For those employees considering a relocation, homeowner insurance in some states could be a shock and should be considered when developing a relocation package.

What to Do?

Homeowner insurance is not required by state or federal law, but mortgage lenders will almost always require insurance to protect their financial interest and despite two out of every three homes in America reported to be under insured already, a sharp rise in costs may tempt more homeowners to cut coverage back further despite the risks.

Consumer Reports says now is the time to shop around and a good time for an insurance checkup, ask about any discounts for switching, be financially prepared for storms and have the right types/levels of coverage.

Mark Friedlander of The Insurance Information Institute suggests in a report by WUSF News that homeowners might consider bundling home and auto insurance, increasing deductibles for a lower rate and asking about available discounts. He noted that a higher deductible can lead to lower premiums, but one will be responsible to pay more out of pocket for a loss, so weigh the pros and cons.

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Market Monitoring for Clients

NEI continues to be diligent about client costs for every single move, monitoring market and economic conditions to ensure the selected insurance provider offers competitive rates for clients who have inventory properties.

For more information, please contact your NEI representative.

The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.

NEI Service Partner Spotlight - Homebuyers Preferred

This month’s NEI Service Partner Spotlight is on HomeBuyer's Preferred and the ins and outs of radon in your home or rented space. Why is radon important to mitigate? What happens if you don't? Click HERE for the infographic.

NEI Spotlight on Corporate Living

Discover how extended-stays make temporary living easy and seamless for transferees from their full-service residential complexes offering apartment-style accommodations, real-time booking systems, fully-equipped kitchens, spacious layouts, and flexible rental agreements.

Download the infographic here.

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Canada's Relocation Property Rules Eased

On 1 January 2023, the Canadian Government imposed restrictions on non-Canadians from buying residences with the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which prohibited relocating employees from purchasing a home in Canada until certain restrictions were met . We’re happy to provide some recent updates that have amended the situation.

After much lobbying from the Canadian Employee Relocation Council (CERC) and Worldwide ERC, Ahmed Hussen, Canada’s Minister of Housing and Diversity and Inclusion, announced amendments to the law that will help alleviate stress for anyone who is considering moving to Canada.

Updated Amendments

• Non-Canadian employees with a valid work permit who work in Canada for at least 183 days may now purchase a single home.
• The requirements for a non-Canadian investor owning equity in a private Canadian business was increased from 3 percent to 10 percent. Once the equity threshold has been met, these investors will also be able to purchase a home.
• Non-Canadians may now purchase property for development purposes, such as vacant lots, zoned for residential or mixed use.

“These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities,” says Hussen.

Unfortunately, non-Canadian relocation management companies (RMCs) are still not able to acquire homes as part of a Guaranteed Buy Out or Buyer Value Option program.

NEI will continue to keep our clients updated with any further developments as they occur.

Passport Processing Woes Persist

The Pandemic may be officially over, but U.S. citizens in need of a passport are facing increased challenges with passport processing times.

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Millions in Backlog

During COVID, there was a government backlog of 1.7 million U.S. passport applications. Today, the U.S. State Department reports “unprecedented” delays in processing documents due to software and staffing issues with some three million applications now backlogged.

Though the Department issued a record 22 million passports in 2022, the weekly volume of applications so far this year is 30 to 40 percent higher than last year with an influx of about 500,000 new passport applications received each week now.

Before COVID, it took about four-to-six weeks to process a passport after receipt. Today, after receiving the application, new estimates for processing and issuing passports are more than three-to-four months. Mailing times can add additional weeks to a month and some people report receiving their passports five months after applying in the traditional manner and even four months after paying for an expedited service.

Further, many countries have "six-month passport rules," where they will not accept entry by travelers whose passports will expire less than six months after the beginning of their trip.

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Prepare Extra Early

In addition to the current backlog, 23 percent of U.S. adults say they plan on traveling internationally this summer – up from 20 percent in 2022. For U.S. citizens planning international travel this year, whether it is personal or business related, if you need a passport preparation should begin well in advance to avoid delay.

Just how far in advance? A minimum of four to six months when using expedited shipping is recommended. Consider the following:

• Applicants should make certain details and supporting documents (like pictures and driver’s license) are 100 percent correct to avoid delays.
• If travel is this October or later, applying the traditional way is likely safe, but your application should be submitted immediately with expedited shipping.  
• If travel is this August or September, one can potentially still get a passport in time, but will need to pay a fee to expedite processing as well as expedited shipping, but there is no guarantee.

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Checking on Passport Status

You can check the status of an in-process application by visiting the U.S. Passport Application Status page. If there is a proven life-or-death emergency or urgent international travel coming up within 14 days, one can try making an in-person appointment at one of 26 passport agencies throughout the U.S., but an appointment to visit an agency is mandatory and the only way to make an appointment is by calling 1-877-487-2778 between 8 a.m. and 10 p.m. ET, Monday through Friday. Spaces are limited and agencies do not accept walk-in services.

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Expediting Agencies

Expediting agencies are companies that assist with rushed passport applications and charge an additional fee on top of the standard passport application fee and expedited passport service fee. The fastest turnaround time is one week for $799 or a two-week option for $599, but even these can be limited in availability since expeditors rely on a subset of appointments being available.

In limited cases, expediting agencies may have extremely limited availability of next day or three day turnaround slots, but these are very few and often attract a much higher management fee from the agency according to EIG, one of NEI’s Visa and Immigration (V&I) service partners. There are various passport expediting agencies that offer these services, with each being allocated a certain number of faster appointments. So, if the agency first approached does not have any available appointments, it is worth checking with an alternative provider directly.

Newland Chase, another V&I service partner, suggested that companies may consider having their frequent business travelers obtain a secondary U.S. passport which would be valid for four years and could be quite helpful if an application is tied up in process and international travel is required.

NEI will continue to provide clients with updated information on this topic and manage relocating employees’ expectations accordingly. If you would like to discuss this passport situation further, please reach out to your NEI representative.

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Navigating Relocation Concerns

Relocating employees often face various challenges and concerns when considering a move. Understanding these common hesitations can help employers better support their employees during the relocation process. Based on data from 2022, we’ve identified the top five reasons why employees are hesitant to accept relocation assignments.

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#5: Undisclosed Personal Reasons

During a relocation, families may have sensitive personal reasons that they hesitate to disclose. As part of our commitment to supporting relocating employees, NEI's Account Executives are trained to observe and listen for subtle cues. By being attentive, we can address specific needs, such as accommodating a newborn with extraordinary medical requirements.

To help employees meet the needs of undisclosed concerns, many companies offer their employees more choice in selecting benefits that best fit their needs by using technology like NEI's iSelect tool or providing a “You” Allowance to access additional funds for needs unique to their situation. These types of actions bring peace of mind to relocating families and ensure smooth transitions.

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#4: Unfamiliarity with the Destination Location

Moving to a new area can be daunting, as families leave behind the comfort of their old home, family, and friends. Studies show that three out of four Americans express regrets after relocating, with acclimating to a new community being a significant stressor.

At NEI, we recognize the importance of personalization and strive to match relocating employees with real estate agents or service partners who understand their situation and can help minimize their concerns. Our city search tool allows your employees to explore their new location and connect with identified essential services, such as information about schools, shopping, parks, or community events.

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#3: Financial Considerations

Financial concerns are a common worry for relocating families. Rising housing costs and fluctuating interest rates pose challenges when purchasing a new home. If they are moving to a higher cost-of-living location, the concerns increase. NEI works closely with relocating families to help them thoroughly understand the available relocation benefits the company is providing to ease financial burdens.

We consult with our clients extensively in developing competitive benefits that lead to greater transferee satisfaction while minimizing corporate expense. Our Client Relations Managers partner with our clients for whatever they need, such as running cost-of-living analyses (COLA), advising them on various ways to support homeowners during challenging real estate markets, or offering significant insights on any topics of concern to aid acceptance rates.

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#2: Health and Safety

In an ever-changing world, health, safety, and security are paramount concerns for relocating families. One way that NEI helps to reassure them of the new location is to collaborate with local real estate agents or destination service partners for an area orientation. Advising them of the various neighborhood nuances and desired amenities is important prior to making any decisions. Obtaining this type of information helps relocating families feel confident they are making good decisions about relocating and where to settle. It prioritizes their sense of well-being so they can settle into their new environment with peace of mind.

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#1: Spousal/Partner Acceptance

The support and acceptance of a spouse or partner significantly influences an employee's decision to accept a relocation assignment. NEI recognizes the importance of spousal acclimation and recommends that companies provide this type of support because one of the top reasons for a failed relocation or assignment is an unhappy spouse or partner.

For example, if the relocating family needs to maintain a dual income household, helping that person acquire a new position can be essential to a successful relocation and a productive employee. Additionally, NEI continues check-ins with relocating families for extended periods, up to six months or longer, if needed, to ensure a smooth transition and address any concerns.

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Conclusion

At NEI, we understand that effectively relocating a family goes beyond finding them a new home. NEI founder, Chairman and former school psychologist, Kate Dodge emphasized, “The significance of supporting and grounding the family is critical during the relocation process. Our commitment to Service Exceeding Expectation means that we go above and beyond to ensure satisfaction from all parties involved.”

By placing proper focus on these top five concerns—undisclosed personal reasons, unfamiliarity with the destination location, financial considerations, health and safety, and spousal acceptance—companies can make each relocation a positive experience.

Should you like to discuss any of these topics further, please contact your NEI Representative.

NEI Service Partner Spotlight - PrimeLending

One of the best things you can do for yourself when you're getting ready to buy a new home is to know how much home you can afford. Read more for a glimpse of the type of trusted advice PrimeLending offers tranferees. Click here for details.

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NEI Global Relocation (NEI) is thrilled to introduce the latest in core-flex technology. Today’s relocating families want to be empowered to select benefits that fit their specific needs. That desire is nothing new, nor is the fact that companies have been using core-flex programs internally for some time now.

What is new is iSelect, our revolutionary design that improves the employee experience with choice and an online tool featuring opportunities to explore their options and various combinations of benefits before deciding what is best for them.

With iSelect, their onboarding experience begins with confirming and updating their information.  From there they are taken to a brief explanation of their core benefits, then quickly advanced to the selection process for their flex benefits. A points calculator is visible to show them how their budget is impacted with each selection.  Once initial selections are complete, your employee can easily coordinate a meeting with their NEI Account Executive through a collaborative calendar.

iSelect makes every relocation a personalized experience and NEI is here to help your relocating families think through their moves, manage the delivery of benefits and answer questions, enabling your employees to stay productive.

The entire process is streamlined, flexible and personalized!

It’s the latest in core-flex technology and we can’t wait to show it to you. Current clients should contact Cindy Beitel, CRP, NEI SVP, Global Client Relations to learn more. If you are not an NEI client, but would like additional information, please reach out to Pam Jacknick, CRP, GMS, NEI SVP Global Client Development.

New Travel Authorization Systems Postponed Again in U.S. and Europe

Enforcement of two new travel authorization systems have been postponed again in the U.S. and Europe:

1. ETIAS (European Travel Information and Authorization System) – until 2024; and
2. REAL ID – until May 2025

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ETIAS Postponement

Europe receives over 37 million visitors each year, so the introduction of ETIAS – similar to the U.S. ESTA program (Electronic System for Travel Authorization registration system) – is expected to have a significant impact on travelers from around the world, including the global mobile workforce.

The roll-out for ETIAS has been planned for years, but the start date has been repeatedly pushed back from 2020, 2022 and 2023, to launch in 2024. There is speculation the new 2024 date could be pushed back further, perhaps after the Summer Olympics in Paris concludes on 10 August 2024.

Once implemented, all visitors who previously travelled visa-free to Europe’s Schengen Zone will be required to register in advance online. For European countries which will be using ETIAS starting 2024, please see click here. To register, individuals will need a passport valid for three months beyond the intended stay, an e-mail account, and a credit or debit card. Passengers will be required to complete an online application form that covers a range of biometric, travel and security related questions. Data will be checked against a variety of European and International databases including no fly lists, to identify potential terrorist and criminal threats who will then be refused entry via the ETIAS program.

When up and running, it is expected most ETIAS applications will take 20 minutes to complete, but time will vary based on additional fields one may need to fill out. Applications may be processed and delivered by e-mail within one hour if no further checks are required, but it could take upwards of 96 hours if additional information’s needed. An application fee will be €7, though travelers under the age of 18 or over the age of 70 will not need to pay a fee.

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REAL ID Postponement

To help improve airline security, Congress passed the REAL ID Act in 2005 and the U.S. Transportation Security Administration and other federal agencies announced they would require REAL ID compliant licenses for people 18 years old and older to fly anywhere within the U.S. starting in May 2023.

However, the Department of Homeland Security announced the deadline would be extended until May 7, 2025 since state motor vehicle departments need more time to process the backlog of applications created by COVID-19 and only about 50 percent of the U.S. population has REAL ID compliant documentation.

Secure REAL ID will “set standards for the issuance of sources of identification, such as driver’s licenses” and will have a star at the top of the license. When enforced in 2025, it will be required for every air traveler 18 or older at airport security checkpoints for domestic travel. Those under 18 must be travelling with an individual who has acceptable documentation.

To get a REAL ID license, a person typically will need to show proof of their full legal name, date of birth, Social Security number, two proofs of residence and lawful status. Lawful status means that the person will need to provide valid documentary evidence that they are lawfully in the United States per Section 202.(c)(2)(B).  

Still, despite REAL ID requirements, other documents may be substituted or used instead when enforcement starts in 2025. These may include U.S. passports, Department of Homeland Security-trusted traveler cards, U.S permanent residence cards, federally recognized tribal-issued photo IDs, and USCIS Employment Authorization Cards.

Costs will be tied to local fees associated with obtaining driver licenses or identification cards. Employers should encourage their employees to determine if their current identification includes the star. If not, it would be good to advise them to obtain the REAL ID designation to avoid unnecessary delays obtaining the necessary documentation for traveling by air by the 7 May 2025 start date.

API Integrations and Relocation - What You Should Know

API integrations for relocation are the future of working faster and more efficiently. As global mobility professionals face growing responsibilities and increasingly complex processes, workflow efficiencies become more important to meet your talent objectives.

That’s where API integrations demonstrate true value. APIs, or Application Programming Interfaces, create communication protocols between business systems, automate workflows and streamline processes within and outside your organization.

Automation drives efficiencies for HR Mobility teams, all who touch your mobility processes, and improves the overall experience of your relocating employees. Automated workflows allow your team members to focus on what is important – securing critical talent and getting them where they are needed as quickly as possible.

It also helps your business scale for future growth by leveraging technology.

UNITE Integration Platform

NEI's UNITE Integration Platform simplifies the integration process to easily connect client and supply chain partners within a highly efficient mobile workforce management system to:

• Seamlessly integrate systems and synchronize data between the client and NEI
• Automate entire business processes, including authorizations, relocation activities, invoicing, compensation, and tax gross-up
• Drive efficiencies and improve the overall experience of your relocating employees through the timely delivery of quality services

While technical staff are needed for API integrations, NEI’s UNITE Integration Platform minimizes the one-time investment to create efficiencies throughout your relocation lifecycle. This investment pays long-term dividends, freeing up time and energy for what matters most - getting the right people in place to unlock new business capabilities for your company.

In Summary

As a full-service global mobility company offering related global compensation and consulting services, NEI Global Relocation (NEI) uses UNITE to unify the entire relocation experience.

Innovation through API integration is a strong focus toward our collaborative approach to provide trustworthy, consultative mobility solutions that make the relocation process work better, so you can achieve your talent agility objectives.

For more information on how UNITE can improve your workflows, please contact  NEI Global Relocation.

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NEI Global Relocation once again makes the HRO Today Baker’s Dozen for Relocation! NEI is one of only two companies to be recognized in the survey for at least 11 of the past 13 years, indicating strong consistency in satisfaction for the services provided to our clients and their relocating employees.

“We are very appreciative of our clients taking the time to participate in this survey,” said Randy Wilson, SCRP, President | CEO, NEI Global Relocation. “Time is precious, especially for today’s global mobility professionals. Our employees work very hard to ensure each relocating family has a positive experience and this type of recognition is important to see given the challenges we have all faced over the past two years.”

The Baker’s Dozen for Relocation is one of two annual industry surveys measuring client satisfaction among global mobility providers, the other one being the Trippel Relocation Managers’ Survey, which provides more overall detail. NEI is also a high performer in that survey, achieving more #1 rankings than any other relocation management company in each of the last three surveys.

NEI Service Partner Spotlight - IOR Global Services

Cultural training is a critical component of preparing for an assignment in a foreign country. Customs and communication styles can vary significantly and raising awareness of those differences can help relocating employees navigate the nuances of a new location.

In the linked infographic, you can see a glimpse of the type of information that is shared when working with one of our service partners, IOR Global Services. Click here for details.

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A Welcome Price Drop

The ocean is a giant “highway” of vessels moving containers of goods across the globe. During the pandemic and until recently there were significant price increases for overseas shipping, but global shipping costs are back down to pre-pandemic levels.

• Shipping a 40-foot container from China to a U.S. west coast port was down 93 percent from its high of $20,600 in September 2021.¹  That’s roughly equal to February 2020. Shipping costs from China to U.S. east coast ports and to Europe have also decreased.

• Other global shipping routes have seen costs fall also: freight charges on Europe-to-U.S. routes dropped from highs of $16,000 to around $3,000.

This is welcome news, but will the trend last for corporate relocation?

NEI Global Relocation has advised clients since the start of the pandemic that companies' global mobility programs should remain prepared and flexible for the unexpected in such uncertain times. Today is no different.

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What 2023 Could Bring

Issues that could threaten lower international shipping costs and fewer delays may include:

• Geo-Political Disruptions: The world has become more economically linked, and any military conflict can force the system to adapt in unpredictable ways including areas declared off-limits to shipping. Russia’s invasion of Ukraine could further disrupt global transport.
• China’s COVID Surge: This threatens to upset 2023 global supply chains again and could increase supply chain volatility. Three major ports across China have already experienced new supply chain delivery problems because of COVID and at the Port of Shanghai, the world’s number one container port, cancellations have increased.²
• Container Shipping Reliability: This will remain volatile in 2023 as a recent report found that global vessel schedule reliability had a 56.6 percent on time record in December – a huge improvement from 30 percent recorded earlier in 2022 – but the average on time was 74 percent in 2018 and 2019.³
• Rising Oil Costs: The shipping industry keeps a close eye on oil prices as fuel costs can correspond to 50 or 60 percent of a ship’s total operating costs, depending on vessel size. When oil prices/demand are on the rise and as China reopens after ending its Zero COVID policy, the shipping industry may pass those higher costs on to customers.
• Labor Shortage / Labor Strikes: Beyond finding moving crews / drivers, the global transportation infrastructure is under regular threat from labor strikes. 2022 saw many strikes at both air and seaports. The chances of new strikes disrupting supply chains in 2023 are high and there is pressure on employers to increase salaries with global inflation.
• West Coast Ports Avoidance: Cargo owners are seeking new supply-chain options and diversifying their port entry locations. Shippers continue to reroute to gulf and east coast ports, away from California, due to higher cost of transporting freight over land, labor disputes with dockworkers, and rail workers' unions causing uncertainty.

Despite these risks, some feel freight volatility and international freight shipping costs may continue to decrease. Dubai-based global logistics company DP World expects global freight rates to drop by a further 15 to 20 percent in 2023.

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Relocation Assistance Risk Considerations

Given the potential risk factors detailed above, what does this mean for client companies and global relocation assistance?  

Foremost, one should remember that:

• Potential rate increases could re-bound in 2023 if the recent, positive circumstances change; and
• Shipments could get delayed or re-routed to other ports, increasing time for one’s expected goods.

Companies need to continue to weigh the impact of potential, quickly changing rate increases and associated incremental costs of delayed shipments (e.g., temporary housing) on their budgets against the increased delays for relocating employees who could have to wait longer than expected for their goods should global supply chain disruptions arise.

If NEI is not managing your international shipments, we recommend:

• Remaining flexible on fluctuating rates due to swiftly changing economic conditions and budgeting for changing international container rates in your cost estimates.
• Working with the best partners to develop processes that include verification of all options, freight costs and that any increases or above average costs are genuine.

To be prepared for shipping costs to be fluid in the year ahead, set expectations with relocating employees and consider alternative policy considerations for shipping household goods internationally, if applicable.

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NEI Guidance and Diligence

NEI continues to be diligent about client costs for every single move. Our Client Relations Managers will work with each client to discuss the most cost-effective international household goods shipping options available and considerations for providing a relocating employee a small allowance towards being without those goods due to a longer transit.

To proactively discuss various options with our clients that may assist them in reducing or avoiding costs, NEI constantly monitors market and economic conditions so talent goals can be met.

For more information on this situation going forward, please reach out to your NEI representative.

Sources: 1) Freightos; 2) SCNBC; 3) Sea-Intelligence’s “Global Liner Performance” Report.

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U.S. Renters' Housing Shortage

Renters make up a significant share of annual moves each year in the U.S. as they continue to be attracted to better weather, lower costs of living, stronger job prospects and/or wanting to be closer to family. Here is how it affects relocating employees.

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Areas Most Impacted

There is a clear migration trend for renters:¹

• More want to move out of the Northeast and West; and
• The South and Midwest remain popular destinations.

But key factors impact both those simply wanting to move and those relocating at the request of an employer: availability, competition, and affordability.

What reasons are behind this and what assistance is available for renters?

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Availability

In most markets, the biggest challenge for renters moving is a serious shortage in available housing and an underbuilding gap of 5.5 million to 6.8 million units.²

Jeffery Hayward, Executive VP and Chief Administrative Officer at Fannie Mae, points out most housing-cost-burdened households are not just in coastal or metros, but also in less expensive metros – like Fresno, Charlotte, and Las Vegas. Even smaller metro areas lack housing that’s affordable.

Consider the following “availability” factors:

• Restrictive zoning increases the challenges nationally. Robert Dietz, Chief Economist at the National Association of Home Builders. "In certain neighborhoods you simply cannot build townhouses. You have to build single family units on lots that are bigger than the market wants." ³
• Institutional investors continue to purchase and rent out properties, owning about 700,000 of the 20 million single-family rentals in the U.S. today.⁴
• Renters also face the “Airbnb Effect” where landlords convert long-term rentals for local residents to short-term vacation housing, thus decreasing housing supply. A study found short-term rentals have caused a larger reduction in affordable housing than any other income level of rental housing.⁵

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Competition and Affordability

An average of 14 apartment seekers competed for a single rental across the U.S., but it’s even more challenging around ultra-competitive areas. San Diego – the 13th most competitive apartment market in the nation – has an average of 22 apartment seekers competing for each of the few available apartments.⁶

Since COVID, renters also face higher monthly leases with an overall increase in rents of 6.2 percent in 2022, marking the second-highest annual rent growth in this century, according to Yardi Matrix’s multifamily report. That growth rate is behind only 2021’s nearly 15 percent rise.⁷

However, that growth rate is well behind the rent growths in popular markets. From November 2021 to November 2022:

• Chicago was among the most robust in the Midwest region with average rents rising by 8.6 percent - $1,773 to $1,925. ⁸
• Phoenix rents surged 26 percent.
• Las Vegas rents jumped 23 percent.
• Charlotte residents saw rents climb 13 percent.⁹
• Florida metro areas of Naples, Sarasota, and Tampa jumped between 29 percent and 39 percent the past two years.¹⁰

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Renter Expectations, Experts and Effective Efforts

For companies that need to relocate employees to challenging rental markets, setting expectations in advance and pairing your people with the right local experts will result in the most effective efforts to compete for the best rental opportunities.

Expectations

• Relocating employees often must look farther out from a job site and accept longer commute times than years’ past – and may still have difficulties locating adequate housing.
• Managing renters’ expectations earlier is important: they need to know finding an apartment has become increasingly difficult and the type of housing they are accustomed to may now be beyond their budget.

Experts

• In the past, renters may have been offered only a lump sum and expected to make appropriate relocation decisions on their own. Such an approach rarely ends up working out well in the current environment given the competitive market and low housing availability.
• It is critical to work with local, on-the-ground experts who really know the rental market in each location. NEI is independent, so we can work with the most reputable and qualified rental agents, Destination Service Partners, and real estate brokers to preview potential apartments and rental homes before showing them.

Effective Efforts

Following a needs analysis, NEI’s Account Executives arrange for customized area orientation tours (if authorized) and provide access to our city search tool to acquaint themselves with the area before the home finding trip. Various service plans are available based on one’s program needs:

• NEI’s Home/Rental Finding Assistance minimizes time required for relocating employees to find suitable housing – whether as buyers or renters. We refer the families to reputable, qualified real estate brokers or rental agents to help in searching for their new home based upon specifics given through the initial needs analysis. NEI’s Rental Guide provides pertinent information to consider when leasing a property.
• Under NEI’s Extended Rental Assistance Program, we provide each agency with verbal and written instructions to anticipate the needs of employees, as well as clear expectations, required timelines and reporting requirements for the rental search. Our Account Executive follows up with the rental finding agent and calls the transferring employee after the initial contact, during, and just after the rental finding trips to ensure satisfaction. They remain in contact with the employee until a lease is finalized.

The Extended program may also include an area orientation tour to acquaint the employee with the new area and a guided tour of available rentals to quickly identify the most likely areas to meet the employee’s housing needs. Various service levels can be selected based on your program needs. This program is highly recommended for those moving to large, high cost of living areas.

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Relief in Sight?

There could be good news for renters across the country in the months ahead:

• Rents for both single-family homes and apartments are rising at a slower pace as of December 2022, but relief rates vary by market.¹¹
• Experts forecast an increase in the number of new homes, condos, and apartments coming to market. Apartment deliveries are projected to spike with more than 917,000 units under construction across the U.S. – the second largest volume increase the country has ever seen.¹²
• Home prices may decline in 2023 giving renters a potential window to purchase a home. Economists’ predictions for U.S home-sale prices run the spectrum for 2023: some feel it could remain stable and even re-bound again later this year, others expect a drop of 10 percent or more if there’s a sharp recession.

"This spike in prices in the short term should be followed by moving toward a new equilibrium, which does mean a bit of a cooldown in housing costs," senior economist at Zillow, Jeff Tucker.¹³

For more information on how NEI can help your company and your relocating renters in today’s volatile market, please reach out to your NEI representative.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

¹ Rent.com; ² National Association of Realtors; ³ National Public Radio; ⁴ Roofstock.com; ⁵ 2021 Carnegie Mellon University; ⁶ RentCafe.com; ⁷ Yardi Matrix; ⁸ Zillow; ⁹ Douglas Elliman and Miller Samuel; ¹⁰ CoStar Group; ¹¹ CNBC/CoreLogic; ¹² RealPage Market Analytics; ¹³ USA Today.

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Crucial Insights into Business Travel Tracking

From crossing state lines to crossing international borders, a company’s Duty of Care obligation is a compelling reason alone to keep close track of employees on business travel.

Need another great reason? Tax compliance!

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A Critical Commonality

Business travelers can span the full range of an organization’s company ladder, from C-suite executives, recruiters and salespeople to in-the-field technicians, drivers and interns visiting different facilities. Methods of employee travel will also consist of various forms of transport getting to a destination.

Once they arrive, however, all share a critical commonality: they and their employers are subject to the tax laws, rules, and regulations of the local jurisdictions where they work.

Companies typically differentiate “business travel” from “short-term assignments” based on the number of days an employee is expected to travel and be on the ground in a specific location. Yet, internal company policies or travel definitions might not fully or consistently address all destination tax obligations and/or reporting requirements.

As more nations and states seek to collect income tax on the earnings of visiting business travelers to increase tax revenue opportunities, tracking and reporting employee movement has become significant.

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Recognizing Risks & Reducing Surprises

Employees and employers must carefully adhere to various requirements to allocate and report income and withhold and remit taxes on business travelers’ earnings, but the ability to provide consistent, comprehensive travel reports for analysis is an obstacle many companies still face internally.

An NEI global tax partner, Deloitte, points out that surprises can be reduced by 1) recognizing the risks emanating from a mobile workforce; and 2) working collaboratively to answer the following questions for further action:

• Who are the organization’s business travelers?
• In which jurisdictions are they working?
• What compliance obligations are generated?

Reporting on the whereabouts and business activities surrounding company business travelers is either frequently inconsistent or not addressed within most companies due, usually, to no specific group or stakeholder having the knowledge and capability to comply with the countless unique regulations by location.

Taking the lead to get one’s company in compliance – or in a better shape to comply – may seem a daunting task. The next question becomes who is best to lead the quest to answer the above three questions and proactively address the consequences of regulatory enforcement?

The answer will vary by company, but a senior executive sponsor is key for momentum, oversight and decision making, as is forming a cross-functional, collaborative team with members from Human Resources and Talent Management, Mobility, Payroll, Finance, Tax and Corporate Travel departments – those who understand the issues and can work together to mitigate risks.

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Data In = Data Out

This collaborative team will be responsible to review the business analytics around travel data for improved compliance efforts, but what if available data is sparse or inconsistent?

Some companies may find it seriously challenging to generate required travel data and reports for analysis. In addition to understanding how travel details for each individual employee can be consistently obtained, the Global Tax Network, an NEI global tax partner, suggests that meaningful reports for analysis would need to show whether:

• Business travel actually was taken on all days indicated on the report.
• The employee used part of the time at the destination location for personal reasons.
• The employee booked a business trip outside of the company’s travel department.
• The employee listed on the report was the one who traveled or did another employee(s) travel in their place.

With technology advancements and departments sharing more information – such as travel and workday calendars, smartphone tracking apps, relocation travel reports, and more – the capability to track business travelers has come a long way compared to two-to-five years ago. This can prove helpful to track business travelers and analyze the data for risks.

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Compliance Ready

Awareness of an employee’s work location and enforcement of business traveler compliance has become a more prominent issue since work-from-anywhere became popular and travel has increased again following a sharp COVID-related decline.

Despite increased administration costs and some initial hurdles, business travel compliance is much less stressful and costly than any noncompliance and expensive tax surprise consequences to either the employee or employer. Addressing business travel in such a manner also supports Duty of Care issues and knowing where all employees are should a crisis occur.

NEI understands there are many questions companies have and challenges faced when it comes to reporting for compliance regarding business trips, whether for tax, immigration, insurance, or countless other topics. If you would like to discuss business travel or other compliance trends, please contact your NEI representative.

The above article is provided for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors before making any decisions or transactions.

The Art of Housing Supply and Demand

Low home inventories, high housing prices and interest rates have slowed younger, first-time buyers from both becoming homeowners and the potential wealth-building aspect of owning a home. Consider that:

• About 65 percent of American households own their own home.
• Between 2010 and 2020, the total value of owner-occupied homes in the U.S. rose from $8.2 trillion to a staggering $24.1 trillion, according to the National Association of Realtors.
• Unlike rent, a homeowner with a fixed-rate mortgage provides more stability in knowing the principal and interest payment will not change, regardless of inflation.
• First-time homeowners may qualify for tax credits.

Historically, first-time home buyers made up about 40 percent of sales; but that percentage has dropped this year.

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An Up Hill Climb and a Moving Target

Increasing mortgage interest rates and escalating home prices have become a high hurdle for home buyers, especially for first-time buyers. Now, they are forced to stretch farther. Consider that:

• The average rate on the 30-year fixed mortgage -- the most popular product today –started this year around 3 percent and is now approaching 7 percent.
• According to Realtor.com, in 2021, Millennials in the 23 to 31 age range paid a median price of $250,000 – today it is $280,000;  and those 32 to 41 paid a $315,000 median purchase price in 2021 vs. today’s median of $350,000.
• Per Redfin, the typical homebuyer’s monthly mortgage payment has climbed $337 (15 percent) over the past six weeks to a new high of $2,547.

As qualifying for loans have become more stringent to secure, there’s been a significant uptick in adjustable-rate mortgages (ARMs) which have lower monthly payments. At the start of 2022, ARMs made up just 3.1 percent of loan applications. More than 12 percent of borrowers applied for ARMs in June and July – the highest percentage of ARM applications since 2007 -- according to Zillow.  9.1 percent of September’s loan applications were also ARMs, according to the Mortgage Bankers Association.

Taking out an ARM may be seen as a “gamble” on what rates will do in the future. Though rates could decrease during the adjustable-rate period of the loan, monthly payments would be higher should they increase.

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Cash is King

Economists expect home prices will start slowing, and even dropping, in some of the most overheated markets in the country over the next couple of years.

Though sellers may lower asking prices, their homes may be listed on the market longer. This could benefit buyers who can afford to wait, but bidding wars put first-time homebuyers at a disadvantage since they usually have limited savings compared to investor buyers who are offering cash or other buyers who benefited from strong markets.

In fact, according to Redfin, homebuyers who offered all cash were more than four times as likely to secure a deal as those who did not, making it the most effective approach.

Though bidding wars may have slowed in competitive U.S. markets, they leave first-timers at a disadvantage. To secure a property, some buyers opt out of typical inspections or protection clauses. “A buyer’s odds of winning a bidding war,” according to Redfin, “increase significantly by waiving the financing contingency or conducting a pre-inspection”.

Buyers who used those strategies “were 31 and 25 percent more likely to win than those who didn’t, respectively.”

However, waiving inspections can have consequences. If an employee moves on their own or relocates with their employer again later, they may be required to complete those repairs out of pocket. NEI provides counsel to help avoid future property eligibility concerns such as excessive acreage, environmental issues or building / material defects to help mitigate future risk.

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Helping Relocating First-Time Buyers

Given how volatile markets have been lately and because nobody’s housing market predictions are sure things, NEI counsels relocating employees about the emotional ups and downs when buying / selling a home and the necessary negotiations today. We help clients prepare for possible exceptions due to market circumstances out of relocating employees’ control and to brainstorm unique solutions that fit each company’s culture, budget and drivers.

Companies can also help relocating employees who are renters who want to fulfill their dream of homeownership. NEI increasingly sees more companies offering relocating renters destination home closing costs reimbursement and direct-billed mortgage partner assistance.

Another method companies can use is contributing to home purchases for first-time homebuyers by offering funds towards new home down payments or closing cost assistance or other incentives in the form of forgivable loans that don’t have to be paid back unless the employee leaves the company within a certain period, perhaps two or three years.

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More of the Same

New residential construction slipped again in June as challenging financial conditions discouraged potential buyers. With home construction constrained by labor and supply chain issues, the housing problem isn’t going away soon.

“While we do expect home price growth rates to decline, we don’t expect prices to fall much at the national level. For home buyers trying to determine the best timing this year, the main benefit of waiting is that there may be less competition as supply starts to build up,” says Chen Zhao, Redfin’s economics research lead.

If you would like to discuss this topic further, please reach out to your NEI representative at any time.

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This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Returning to normal causes an increase workload for the IRS

The Internal Revenue Service’s (IRS) workload has been increasing for years as its headcount has been contracting. Like other employers facing labor shortages, the IRS is having its own difficulties finding qualified job applicants, but there’s been signs of progress:

• Congress provided the IRS with $80 billion in additional funding over the next 10 years to increase hiring. More than 5,000 new customer service representatives were hired in October 2022 with training expected to be completed by February 20, 2023.
• The 4.7 million original individual returns backlog (Forms 1040) in January 2022 was reduced to about 400,000 by December, but is still anticipated to impact customer service.

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Difficulty Reaching IRS Customer Service

Of the 173 million calls the IRS received during FY 2022, only 22 million or 13 percent got through to an IRS employee after an average wait time of 29 minutes. As a result, most callers could not get answers to their tax-law questions, receive help with their account problems, or speak with an employee about compliance notices.

Telephone service for tax professionals hit an all-time low of 16 percent to a Practitioner Priority Service (PPS) hotline after an average 25-minute wait time for those who got through.

What to Do

If you need to call them, some say they have better results reaching the IRS in the morning, starting as early as 7 a.m. Eastern time, and Wednesday through Friday seem to be the best days to reach a representative. However, one should still expect long waits.

The IRS admits phone service wait times are often longer on Mondays and Tuesdays, on weekends and the closer it gets to April’s filing deadline. It is important to:

• be patient,
• be polite, and
• keep good records of contacts, attempted contacts, and one’s discussions.

The IRS has encouraged people to establish an online account at www.IRS.gov to help access information quickly. The IRS has invested in online capacities to provide taxpayers with a quick and easy way to access information so the calls for more complicated issues can be answered in a timelier manner.

If a call is necessary, the IRS encourages people to have all the information they need before filing a complete and accurate return. Organize and gather 2022 tax records including Social Security numbers, Individual Taxpayer Identification Numbers, Adoption Taxpayer Identification Numbers and this year's Identity Protection Personal Identification Numbers valid for calendar year 2023.

Relocation Families

For relocating families, it is important to understand how relocation expenses are reported on various countries’ tax forms from the company. In most cases, NEI provides information about relocation-related expenses directly on the relocating employee’s NEI website and have access to any summary reports of tax related expenses in this one place.

NEI helps answer questions related to relocation expenses as reportable income. Employers can help manage employee expectations by reminding employees who are “surprised” about the tax implications from their relocation that:

• The policy they were provided indicated the tax implications.
• The details of their expenses are available on their NEI website.
• If they still have questions, they can reach out to their NEI Account Executive for more information.

For those moving cross-border, where two countries might be involved, tax expertise is always recommended, but here is some general information:

• One-way moves: Most companies offer a tax briefing to help the employee understand the nuances of the tax regime to which they are moving. Some companies might help with the first year of professional tax preparation fees.
• Assignments: It would be typical for companies to provide the tax preparation services for home and host countries.

In most cases, NEI coordinates with the company’s payroll or international tax provider to ensure they have all mobility expense information from the assignment to appropriately include in the home and host country payrolls.

Tips for Filing Taxes

“This filing season is the first to benefit the IRS and our nation’s tax system from multi-year funding in the Inflation Reduction Act,” said Acting IRS Commissioner Doug O’Donnell. “With these new additional resources, taxpayers and tax professionals will see improvements in many areas of the agency this year.”

The IRS encourages everyone to have all the information they need in hand for a complete and accurate return.

As with any tax year, filing for your taxes with accurate information is the best way to eliminate potential frustrations down the road, whether you are reporting child tax credits received or relocation expenses. NEI can’t help with the former, but we certainly can assist with the latter. Help for questions is just a call away…and NEI answers our calls!

The above article is provided for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors before making any decisions or transactions.

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NEI Global Relocation is pleased to announce that our Service Organization Control (SOC 1 and SOC 2) audits achieved ZERO findings for the second year in a row and in five of the past six years.

SOC 1 – Compliance with Financial Laws and Regulations to Combat Fraud

A SOC 1 audit is for service organizations and assesses the internal controls and procedures which are in place to protect client data and ensure controls around processes are operating as designed – more specifically related to financial reporting. A SOC 1 report validates the organization's commitment to delivering high quality, secure services to clients.

This report provides customers with an independent opinion so they can be confident that financial laws and regulations comply with corporate responsibilities to combat corporate and accounting fraud.

“This is an amazing accomplishment! We are so proud of our employees who always stay focused on the details and following our established processes,” said Michelle Moore, NEI Chief Global Mobility officer. “As a service organization, there is no higher compliment than to go through an extensive SOC 1 audit with ZERO findings. Thank you to all our employees for recognizing the importance of being consistent with processes and accurate with data.”

The AICPA clarifies that this type of SOC report for service organizations provides a level of assurance to the organizations’ clients that financial reporting is practiced in accordance with the Statement on Standards for Attestation Engagements SSAE No. 18.

SOC 2 – Availability, Security, and Confidentiality

The SOC 2 report addresses a service organization’s controls that relate to services, operations, and compliance. NEI’s SOC 2 reports on the criteria of availability, security, and confidentiality – that which is often categorized under data security.

“We are very excited to receive this kind of recognition with our SOC 2 audit,” said Greg Keith, NEI Chief Information Officer. “The fact that we have achieved “zero findings” so often means NEI employees are performing extremely well with our data security processes and controls. Privacy and liability concerns have increased the demand for assurances of confidentiality and privacy with customer data. These results clearly demonstrate our commitment to protecting confidential information.”

The SOC 2 report is connected to the SSAE 18 standard and was created in part because of the rise of cloud computing and business outsourcing of functions to service organizations.

In addition to our excellent SOC 1 & 2 Type 2 ZERO findings results over the years, NEI was recognized with more #1 rankings than any other relocation management company in the 2020, 2021 and 2022 Trippel Relocation Managers’ Surveys.

Should you want more information about our SOC 1 and 2 Audit results, please reach out to Michelle Moore, NEI Chief Global Mobility Officer or Greg Keith, NEI Chief Information Officer. We are always here to help.

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Upcoming Changes from the US IRS for 2023

With the new year comes new caps, tax tables and allowances from the U.S. Internal Revenue Service (IRS). Listed below are the areas related to relocation for 2023.

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Standard Mileage Rate

The U.S. Internal Revenue Service (IRS) announced an increase of the optional standard mileage rates in mid-2022 to 62.5 cents per mile for the second half of 2022. On 1 January 2023, the rate increased again to 65.5 cents per mile driven.

Most companies follow the IRS guidelines to calculate the mileage reimbursements for final move expenses when driving to the new location.

This rate increase will affect mobility programs:

• If you are an NEI client who has elected to follow IRS guidelines for your expense administration, nothing is needed at this time.  NEI will incorporate the mileage change into your expense reimbursement policy, as agreed.
• If you are an NEI client who has not elected to follow the government established mileage rates in the past, NEI will continue to follow your prescribed rates unless you advise us that your company is changing the rate. Please contact your NEI Client Relations Manager directly, if you would like to confirm or update your current rate.

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Supplemental Rates

As some companies gross-up non-salary relocation benefits at supplemental rates for federal and state levels, most companies also withhold at supplemental tax rates for non-grossed items. Keeping on-top of supplemental rates and explaining the potential tax implications to your relocating employees can aid them in knowing what to expect when taxes are due.

Federal supplemental rates remain unchanged, holding steady at 22 percent withholding for supplemental wages under $1 Million and 37 percent withholding for non-salary wages over $1 Million.

For easy reference, we are providing the current state supplemental rates in the table below:

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Federal Income Tax

While federal income tax rates remain unchanged from the 2022 tax year, 2023 income tax brackets have shifted dramatically to accommodate an over 40-year high inflation rate. Additionally, the 2023 standard deduction amounts have increased.

Due to these adjustments, most relocating employees can expect a modest reduction in their tax-liability. New grads stand to benefit the most from the changes, as the majority of graduates earned less than a full year’s wages when starting in the summer or fall.

See below for 2023 adjusted tax brackets which reflect an approximate nine percent increase from the prior year ranges:

Standard deduction amounts have also increased:

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Social Security Wage Limit

The Federal Insurance Contributions Act (FICA) requires companies to withhold three separate taxes from the wages paid to employees.  The largest tax of these three is the Social Security, also known as the Old Age, Survivors and Disability Insurance Program which is set by statue at 6.2 percent for both employees and employers to pay on the first $160,200 of wages in 2023.   This is up from $147,000 in 2022.

The second element referred to as the Medicare Tax, is also split evenly between employees and employers, is not subject to a wage limit and remains at 1.45% for both parties.    There are no changes to the remaining element called Additional Medicare tax.   This rate is 0.9% for the employee with wages over $200,000 for single filers and $250,000 for married filing jointly.   The employer does not get charged for this additional tax.

In Summary

As your relocation partner, NEI is here to explain year-end tax questions for your relocating employees. If you have any question about these changes, please contact your NEI Client Relations Manager at 800.533.7353.

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‍This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors before engaging in any transaction.

Making Relocations More Affordable for Employees

A recent report shows 78 percent of those surveyed associate home ownership with the American dream¹, yet one in two Americans see housing affordability as a serious problem.² What does this mean for companies who need to relocate their employees?

It’s an indicator that employees may be reluctant to relocate for several reasons:

1. They want stability for their family, given the challenges of the last few years.
2. Anxiety over rapidly rising inflation, higher housing costs and increased mortgage rates.
3. Fear of moving to a higher cost of living area with many unknowns.

These are all real concerns. According to Fannie Mae, only 16 percent of U.S. consumers believe that now is a good time to buy a home. Another alarming statistic: mortgage applications in November 2022 fell by 25.2 percent compared to the previous year.³

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Interest Rate Impact

Last year, U.S. 30-year fixed mortgage rates had the biggest year-to-date rate increases in over 50 years. In January of 2022, the average rate was 3.33 percent – in January 2023 it was 6.58 percent!⁴ Negative buyer sentiment is often linked to mortgage rate increases.  

While today’s rates are historically low compared to the October 1981 peak of 18.45 percent, the escalation in home prices during the pandemic from mid-2021 to mid-2022 per the provided chart have greatly impacted employees’ concerns about relocating.

You can see why when you look at how a monthly mortgage for principal and interest has risen in one year. On a $360,000 30-year fixed mortgage (P&I), payments at the beginning of 2022 would have been $1,583 per month. By January of 2023, that same payment increased by $711 to $2,294!

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Mortgage Rate Options to Consider

NEI helps client companies prepare for situations caused by market circumstances which are out of relocating employees’ control. Each company’s unique culture, budget, and drivers are taken into consideration when making suggestions to help retain talent while making your company attractive to new talent. Options to consider include:

Mortgage Interest Differential Allowance (MIDA)

MIDA programs were developed as a solution to assist employees when purchasing a home in the new location at a significantly higher interest rate. Popular options in the 1980s and 1990s, such MIDA policy benefits are getting dusted off again for consideration by some companies. As this benefit was rarely used over the last twenty years, any industry information or statistics are obsolete.

In this program, if a specific interest rate threshold is passed (e.g., 8 percent with at least 2 percent differential on the employee’s existing mortgage), the company would temporarily pay the difference in interest between the relocating employee’s former mortgage rate and their new one for a determined amount of time. The allowance is sent directly to the lender by the company and reflected on the employee’s payment.

Some companies require employees to invest their full equity from the sale of the old home into the purchase of the new home to be eligible. In addition, caps are sometimes placed on the total differential.

MIDAs can be difficult for companies from a budgeting perspective, however if the employee moves to a different home while the benefit is in effect, the coverage ceases and the company is no longer assisting.

3-2-1 Interest-Based Mortgage Subsidy

An appealing option for companies to consider is a subsidy program that supports mortgage payments over a set period of time to help the employee ease into the higher mortgage payment. Many companies use a three year period with the subsidized rate decreasing each year until the company would no longer be subsidizing interest. For budgeting purposes, some companies prefer to define a maximum subsidy dollar amount spent per year for the benefit.

Prepaid Interest

Companies can pay for loan discount points to assist relocating employees facing higher rates on a home purchase. Using a sliding scale, one point could equal one percent of a borrower’s mortgage and is interest that is paid upfront at closing. This lowers the rate for the life of the loan.

Some corporate mobility policies have a sliding scale for points coverage tied to the current market rate. If one uses a sliding scale, it may make sense to lower thresholds. Companies might offer to pay for one point when interest rates reach seven percent, two points at eight percent, and so forth. Thresholds help keep pace with changing mortgage environments and help make moving more agreeable.

Because this benefit impacts the life of the loan, this may not the best option for an employee who could be relocated again within a few years.

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Unpredictable Markets and Economic Conditions

Prospective home buyers today face expensive ownership costs and prospective sellers contend with lower price expectations as well as unfavorable mortgage rates if buying again.

NEI constantly monitors market and economic conditions to proactively discuss various options with our clients that may assist them in adapting to meet volatile market challenges so recruitment and retention goals can be met.

For more information on the above programs or other needs, please reach out to your NEI representative. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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Sources: 1) Mynd Consumer Insights Report; 2) Pew Research Center; 3) Fannie Mae; 4) Mortgage Bankers Association; 5) CNBC.

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From Paws to Passports:

At NEI, we believe pets are family too! Here are five tips to consider before relocating internationally with one’s pets:

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A Pet Owner's Guide to International Relocation

#1 Meet with your veterinarian

Ask your vet to check on destination requirements for your pet’s vaccinations and quarantine rules. Ask your vet for advice on long flights with pets, microchipping your pet, and obtaining a supply of prescribed medications. It is not recommended for old, anxious, or sick pets to ride in an aircraft’s cargo hold.

#2 Understand travel rules before purchasing tickets

Travelers should call the airline(s) before booking a ticket to confirm carrier/crate limits, weight limits and space for their pet as they may limit the number allowed on a specific flight or not permit any pets on board. It is important to find flights with the fewest stops as layovers can be stressful for a pet.

#3 Prepare and organize all pet documents

Different airline rules and destination country Customs and Imports laws may require pet documentation for vaccinations and a vet’s letter clearing them for travel. Take a copy of your pet’s complete medical records while traveling.

#4 Consider using a professional pet transportation provider

At each client’s preference, NEI can direct employees to pet transportation experts. Fees vary by provider and situation. Most offer comprehensive services to manage the entire process!

#5 Always ask questions

Information received from airlines, veterinarians and pet transport firms can be overwhelming, so ask for clarifications well ahead of travel. NEI has helped many travelers proactively solve their pet challenges.

Examples of When to Make Other Arrangements

Advanced planning is the key to moving with pets internationally. When moving with an exotic or uncommon pet — snakes, birds, fish, turtles, insects, etc. — ensure you check for specific requirements about these creatures. Every country differs on what types of animals may enter. Missing a detail around their transport and laws would be an unwelcome surprise.

Consider these two examples when NEI Account Executives provided advanced pet problem solving for employees contemplating assignments with their pets:

Example 1 – Gerbils: from Canada to the UK

NEI managed the move for an employee going on assignment from Canada to the UK who was concerned about his two gerbils he wanted to take. NEI checked with a vetted pet transport service partner, inquiring about the latest quarantine period in London for gerbils.

When the employee was informed of the regulations, he decided to trust the gerbils' care to a family member while on assignment.

Example 2 – Five Chihuahuas from Japan to the US

A Mexican national and his spouse accepted an international assignment from Tokyo to San Jose, CA.  During a pre-move needs assessment, the NEI Account Executive learned the couple planned to bring their five dogs from Tokyo believing that, due to their small size, it should not be a problem.

Their NEI Account Executive advised them proactively that relocating five dogs could be a potential issue:  not only are more U.S. municipalities enacting regulations on the number and type of animals a person can keep on a property, but California had even stricter laws that varied county-to-county.  

Research conducted by NEI found the California counties the relocating couple was interested in only allowed two dogs at any given time and more than two dogs required a kennel license.

After NEI and the DSP discussed options with the couple, they decided to take two dogs with them from Tokyo and relocate the remaining three to Mexico to live with the assignee’s parents until the couple’s eventual home country repatriation.

Had NEI not counseled the couple at the beginning, the result could have been much different and they greatly appreciated NEI’s guidance.

For more weekly information about hot topics and mobility trends, follow NEI Global Relocation on LinkedIn!

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