This clause creates a financial obligation requiring an employee to repay relocation costs (moving expenses, temporary housing, travel costs, etc.) if they leave the company within a specified timeframe after being relocated. The clause typically specifies a "clawback" period—for example, requiring full repayment if you leave within 12 months, or a declining repayment schedule (50% if you leave in year two, etc.). This clause matters because it can create significant financial liability and restrict your employment mobility. If you relocate for a job and then decide to leave—whether due to changed circumstances, better opportunities, or workplace issues—you could face a substantial bill that makes leaving economically unfeasible, effectively trapping you in the position.
Negotiate the repayment obligation carefully by: (1) capping the clawback period to no more than 12-18 months, (2) requesting a declining repayment schedule rather than full repayment, (3) adding exceptions that eliminate repayment if the company terminates you without cause or materially breaches the contract, and (4) ensuring the company clearly itemizes which costs are subject to repayment. Consider requesting that the company cover relocation costs as a non-repayable benefit rather than a loan, or propose that repayment obligations apply only if you voluntarily leave for a competing employer. Document any agreed modifications in writing.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause creates a financial obligation requiring an employee to repay relocation costs (moving expenses, temporary housing, travel costs, etc.) if they leave the company within a specified timeframe after being relocated.
Why should I care about this clause?
The clause typically specifies a "clawback" period—for example, requiring full repayment if you leave within 12 months, or a declining repayment schedule (50% if you leave in year two, etc.).
What are my options?
This clause matters because it can create significant financial liability and restrict your employment mobility.
How does this affect small businesses?
If you relocate for a job and then decide to leave—whether due to changed circumstances, better opportunities, or workplace issues—you could face a substantial bill that makes leaving economically unfeasible, effectively trapping you in the position.