Can you take back relocation money if the employee doesn’t spend it all?

by Evil HR Lady on August 2, 2012

Dear Evil HR Lady,

We have a new employee who we gave $3000 up front for a relocation package. Since then, their receipts have been turned in and the receipts only total $1980. Can the company require the unused money be returned to the company? If the employee does not comply, may we deduct the amount from their paycheck? 

Depends on the contract you signed. (If you had no contract for a relocation, then that was a mistake.)

 But really? Don’t do this. Things like this is what make people hate HR/Management. It’s $1000 and will alienate your brand new employee. $3000 is chump change when it comes to re location. (Our  last relo cost the company more than $60,000 by the time you considered closing costs, ocean shipments, etc, etc.) This person probably skimped and saved on his relo so that he could have a little bit of money for things like buying new garbage cans, deposits on apartments and window treatments.
Guaranteed he packed his own boxes (or he and his friends did) and drove his own truck. Don’t punish frugality.
If you want to only pay for specific items, you need to spell that out clearly in the paperwork. Don’t give cash up front, just reimburse when presented with receipts. But, don’t be surprised when you implement this that everyone manages to spend every penny.
If it’s going to affect your accounting procedures, let the guy know you need $3000 worth of receipts and you’ll be happy to consider first month’s rent, car registration fees or dinners out while waiting for a new refrigerator to be delivered as relocation costs.
What does everyone else think? Should this guy either present receipts or return the money?

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