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Employee aspects of a business relocation

USA
22 Apr 2015

There are a number of reasons why a company might consider moving its corporate headquarters, relocating key operations or outsourcing certain aspects of its business. Taxand USA discusses the details.

If operations are relocated, best practices dictate a thoughtful and structured plan be put in place and executed. In a corporate headquarters move, it is likely that a portion of the workforce will agree to transfer, while others may terminate their employment. 

For individuals whose employment terminates, an employer must first look to identify whether the individual is subject to an employment contract that governs termination payments.

Salary continuation is still the most common form of payment rather than lump sums. However, an employer should consider the tax implications, as lump sum payments may result in lower FICA taxes to the extent the employee has already reached the social security wage base, whereas salary continuation could result in payments extending into a subsequent tax year.

Discover more: Employee aspects of a corporate headquarters relocation or transfer of operations


Your Taxand contact for further queries is: 
Leslie Nielson
T. +1 212 759 5532
E. lnielson@alvarezandmarsal.com

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Taxand's Take

We recommend that an employer take stock of the changes in the marketplace and current practices before implementing programmes that are not in line with recent practices.

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