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  1. #1

    Default Timeline to Pay Back Relocation Allowance if Leaving Before 12 Months

    My question involves labor and employment law for the state of: IL

    I am leaving a salaried position at just shy of 12 months' employment. On hiring I received a relocation allowance, since I moved here from out of state. My initial offer stated I'd have to repay the relocation allowance if I did not stay at least 12 months. As I'm not able to pay the full amount in one lump sum, I checked with HR to see if repayment could be spread out over several months, last payment being Jan. 1. Initially I was told yes, I could split it over several months. Now I'm being told by HR that the whole amount must be paid by mid-December because the company can't "reverse money on an employee when there are no earnings, i.e. Jan. 1". I take "no earnings" to mean I will not be there Jan. 1 so I won't be earning anything from them. However, I won't be there for the other dates originally told to me by HR that I could split up these payments, either, as I am due to leave a couple of weeks from now, yet that's the repayment suggestion that was made to me.

    My question is, if there is no specific timeline requirement for repayment of the relocation allowance on my initial offer, am I legally obligated to pay the whole amount back by mid-December as is now being said by HR? Again, I will have already ended employment by then. The original proposed payment plan, with last payment being Jan. 1, is in email from my HR person, as is the latest email from them going back on that proposal and saying I have to repay everything by mid-December instead. Thanks for any help!

  2. #2
    Join Date
    Jun 2013
    Posts
    551

    Default Re: Timeline to Pay Back Relocation Allowance if Leaving Before 12 Months

    Most likely the company policy states that the money is due when you stop working for the company. If they choose to allow other repayment plans for your convenience that is up to them. Most likley they want it closed prior to the end of the year, hence the mid December deadline.

    Long story short, the money is owed the day you stop working. If you fail to comply with their terms they can pursue legal action to recover the money they are owed.

  3. #3
    Join Date
    Jul 2010
    Posts
    8,006

    Default Re: Timeline to Pay Back Relocation Allowance if Leaving Before 12 Months

    The problem is you are wanting to make the last payment on Jan 1st, which is the beginning of a new year for tax purposes. I'll let the more learned HR folks weigh in on whether this can be dealt with or not. Can you make the payment on Dec 31st?

  4. #4

    Default Re: Timeline to Pay Back Relocation Allowance if Leaving Before 12 Months

    Thanks for replies (brownj12, thanks too). I'm going to see about Dec 31, that was my next step if the original proposal they made is really off the table. I thought maybe since HR put the previous proposal (with final payment being Jan. 1) in an email, maybe that made it the one they must stick with. Thanks again for replies and I welcome further response from anyone who may have other thoughts.

  5. #5
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Timeline to Pay Back Relocation Allowance if Leaving Before 12 Months

    When, whether and how you pay this back is a matter between you and your HR department. The law is not going to take a stand.

    There are definite tax implications, which I will let llworking or DAWW explain to you, by going over into January 1. But in the absence of a binding and enforceable contract stating how and when you will make these payments, it is not a legal issue. The fact that they initially agreed to January 1 in an email does not mean they cannot change their minds. They are not OBLIGATED to allow you to make payments at all - they would be within their rights to demand the entire amount upfront.

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