In these challenging times, companies are being faced with exceptional circumstances. One of these exceptional circumstances is when the assignee is packed to go on assignment but the assignment is cancelled last minute. Companies will typically pay for the costs directly linked to the relocation, such as shipment and medical expenses, but what about incidental costs?

Incidental costs include service disconnection fees or penalties; membership fees lost; suitcases bought, etc. Typically, these costs would be covered under the Miscellaneous Relocation Allowance [MRA] paid by the company, which, depending on the company’s approach, may only be paid once the employee has arrived in the host location.

Assignees that incurred these home-country, pre-assignment costs are now submitting reimbursement claims, and companies are struggling with how to handle these incidental costs. Should they reimburse these costs or pay a one-time allowance to cover all or part of these costs? If the latter, what is a reasonable amount?

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