Company may be resigned to paying for ex-employee’s airfare

Of interest to business travelers, the LA Times travel section has posted a question that I’ve been asked by readers a number of times (though they usually want to know the risk of the company clawing back the ticket)…

Question: As a human resources consultant, I sometimes receive travel inquiries from one of my clients. Here is one: An employee, using a company credit card, purchased a $1,200 airline ticket for a business trip. The ticket is in her name and is nontransferable. She then resigned from the company, and the company (which is paying for the ticket) contacted the airline. The airline initially told them there was no problem but later said no changes (regardless of fees paid) could be made to the ticket and even added the comment “Guess you just gave your former employee a nice trip.” While my client understands that advance tickets have restrictions, it seems impossible that the change of employee name (with change fee) cannot be implemented and that the ticket, paid for by the company, remains in the possession of, and for exclusive use by, the former employee. Can you help?

See their answer here.

Have any experience with the above? How did your company handle the situation if you genuinely did not foresee leaving prior to your planned trip?

Comments

  1. Canadian situation but we (the company) ate the cost of the ticket and the former employee got a credit with Air Canada.

  2. My company cancelled the ticket, so if the former wanted to use it he had to pay penalty and fare difference if any!

  3. One angle missed in the LA Times piece is that while the ticket can’t be clawed back, it’s most certainly taxable income to the employee if it’s not used for business purposes (ticket price minus change fee — the value of the airline credit received by the employee).

  4. If companies buy non-refundable tickets, they should be aware of the risks they accept.

    If they have a lot of losses like this or change fees for employee travel, there is a solution. Y fare tickets.

  5. My view
    Person used xyz credit card that has their name on it and company backing the line of credit just pays the bill. Ticket can not be clawed back unless person who purchased it calls to cancel ticket. Company can try and go after ex employee but thy have no rights calling the airline to cancel a ticket as they did not book the ticket the credit card was used most likley we the ex’s name .

    It’s like I book a ticket using a card with my name on it but it is linked to my mothers name she can not call the company I made a purchase with to cancel only the person making the purchase

  6. Why can’t the company just cancel the ticket? The company may “eat” the $1200, but the ex-employee does not get the benefit of the travel, correct? Also, there’s a huge assumption in this article, that the destination is someplace that the employee would like to go, as opposed to a destination he/she had to go to for work and would not otherwise go to.

    @Gary – as far as “income” to the ex-employee, it will likely be insignificant for tax purposes. But it would be sufficiently annoying to the ex-employee that he/she has to factor it into his tax return.

    • @Truthiness – if it’s > $100 it wouldn’t be insignificant to the IRS. And if the ticket is cancelled there will still be a residual value/credit to be applied to new travel (to another destination on other dates)

  7. If I was the employee and with my luck in such matters the ticket would be to someplace like Detroit in January not San Diego. I can see where the company could try to tax the employee but in a way the employee didn’t ask for the trip. Again if it was to someplace you don’t like why would you even go as an Ex-employee. If I where the employee I would try to call and cancel the ticket for refund if possible so the employer wouldn’t be on the hook. I don’t like to leave feeling that I owed them something. If the ticket can’t be refunded then I would try to use it for something. No since going to waste. If nothing else it’s a free mileage run.

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