Can we require repayment of moving expenses if a new employee quits? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Can we require repayment of moving expenses if a new employee quits?

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Q. Our company plans to hire a manager who will move to North Carolina from out of state. We will pay her moving expenses. Can we recoup those payments if she quits after moving here?

A. Yes. North Carolina permits a contract between a company and employee concerning moving expenses.

Courts will enforce the contract just like other contracts, meaning all common contract elements must be in place:

  • There must be two parties—the company and the employee.
  • There must be mutual agreement and meeting of the minds as to the specific terms. For example, the company will pay moving expenses, but the employee must repay them if she voluntarily leaves the company’s employment within two years.
  • There must be valid consideration—the company’s initial payment of moving expenses.

The contract should be in writing and limit the required employment period to about two years.

Have your attorney prepare the contract to ensure it covers all contingencies. In particular, the contract should not destroy the employee’s at-will status. 

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