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Employee aspects of a business relocation
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.
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