Should Airline Compensation Go To Your Employer — Instead of You?

When an airline pays out compensation for a delay, and you’re traveling for work, are you really entitled to keep the money? Shouldn’t you turn it over to your employer?

Even a three hour day, say at 9 a.m. on a Tuesday, can trigger cash payments for European flights under EU Regulation 261/2004 for flight delays. Or if you’re traveling in the U.S. and you’re involuntarily bumped off of a flight then cash compensation is due. Let’s not even get into picking up $10,000 in travel vouchers for taking a later flight.

  • If your employer bought the ticket, and you’re traveling during the business day, what’s the argument for you to keep airline compensation?

  • Often extra expenses incurred during interrupted travel are covered by an employer. I’d say extra expenses get covered first, if not by an employer then by the airline or credit card used to purchase the ticket. But what about airline cash left over after that?

  • If you’re traveling during work, it’s not just that the business is losing money — lost deals, lost billables — but you’re already being paid for the time so isn’t taking delay compensation a form of double dipping? (On the other hand the IRS likely wouldn’t consider denied boarding compensation to be income.)

Have you ever thought about the ethics of pocketing airline compensation when someone else bought the ticket and they’re already paying you for your time? Would you ever consider turning those funds over to your boss?

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Comments

  1. Compensation should go to the party incurring the time spent which is the employee
    1. You arent being compensated for the cost of the ticket, your being compensated for the loss of time spent waiting that you wouldn’t have incurred. Generally salaried people are spending additional personal time either later hour/ days than they would have normally spent.
    2. Most people are traveling with laptops/mobile devices and still handle work while on delay.
    3. Compensation for a voluntary bump works because the person taking it is spending their time in exchange for a reward (voucher) taking this away will take away the incentive the airlines are creating.

  2. Always been self-employed, so I’ve fortunately never had to consider the ethics of this situation. I look forward to reading some predictably hostile comments, however!

  3. Should tax cuts for corporations go to you — instead of your employer? Should CEO pay, which is thousands of times more Han the average workwr’s oay, go to you — instead of your CEO? There are a lot bigger ways that employers screw over their employees that airline compensation barely tips the scale. Chances are that you’re not being paid enough for your time, especially since wage growth has been flat for 20 years while executive pay has grown faster than the entire stock market. But sure, yeah, let’s rig everything against the average employee even more.

  4. Agree with Adam’s point above. The unofficial rule at my work is to try and plan travel outside of work hours (early morning/evening flights) as to maximize the work hours and availability to take calls and meetings, so I’m pretty much stuck burning personal time anyway. That being said, most of the time I just power up and work on stuff during my layovers and delays anyway, so not much work time is lost.

  5. let’s put this lightly:

    NOT A F*N CHANCE

    Maybe, just maybe, if I flew only between the hours of 0800 and 1700, got an hour for lunch where i didn’t have to work and “dropped the mic” at 1700 no matter what was going on, would I consider an inconvenience on MY time something I owe the company for.

    The reality is that I travel OUTSIDE of normal business hours (or days) so I can serve my customers when and where it works best for them. The couple of hundred bucks (in largely worthless travel vouchers) I might get for taking a later flight is for me.

  6. This is the same line of thought that says frequent flier miles should go to the employer – because they are the ones paying for the ticket.

    Um…no.

  7. Totally agree with Ben on this.. I’m the one suffering the delay and hassle most often out of hours whilst my colleagues are at home having dinner or tucked up in bed.

  8. For federal government employees, this is official policy.

    “If a government traveler is involuntarily bumped from a flight and receives a DBC, the compensation belongs to the government as it is the government who is inconvenienced and is due the compensation. The passenger (and the airline) is required to have the compensation in the form of a check (no flight coupons) made out to The Treasurer of the United States.”

    https://www.gsa.gov/travel/plan-book/transportation-airfare-rates-pov-rates-etc/airfare-rates-city-pairs-programs/faqs-for-city-pair-program

  9. Only if my “employer” comes to the airport and then flies on the delayed flight(s). Until then, uh no.

  10. I own a business where we travel frequently. No way does this belong to the business – whoever is stuck sitting in an airport and not at home with their family gets this compensation.

    Though I would like to know the names of some businesses that insist they keep the compensation, since we’re always looking to recruit away good people who are stuck working for a lousy company.

  11. Typically employers have policies regarding corporate travel and they often clearly state that your frequent flyer mileage accrual is either yours or the company’s. Delay compensation should follow the same pattern, and if it does not say a specific direction then it would remain with the employee. And if there is no direct policy then it’s all for the employee. The ethics of the matter would then apply to whether or not a delayed employee fraudulently retains compensation when he/she should have returned it to the company.

  12. What a ridiculous idea!
    @Gary has too much time on his hands today. No travel news or deals today?

  13. I am appalled by the official USG position, not surprised, but appalled. That is horrible. I am a contractor for the USG and thankfully this does not seem to apply to me and regardless I would argue it wouldn’t even if I was an employee, since I travel almost exclusively on Saturdays spending Saturday and Sunday in transit/”working” without compensation. Sadly.

  14. Note the gov’t policy is for INvoluntary denied boarding. Usually the comp is for voluntary. Actual cases of involuntary denied boarding are much much more rare than “well give you 300 airline bucks to fly later today.”

  15. I agree with the majority of above.

    The employee is (usually) making a significant personal sacrifice. Whether the business incurs any sacrifice at all is up to debate.

    Bottom line most employees who travel are in jobs where they are hired to “get the job done”, not clock hours – so whatever marginal time is even at risk of being “lost” on the part of the Business (even that is arguable as mentioned above with laptops, etc) is made up when the employee borrows an hour here or there to complete their work.

    In many cases, the company probably gets extra work out of their employees – I’ll shut my laptop down to spend the evening with my family, but if I’m stuck in a hotel with nothing to do but wait for tomorrow’s flight there’s a good chance I’ll pop open the laptop and put in some extra hours. So maybe the question should be whether businesses should pay their employees overtime on top of any perks that come from the airlines with a cancelled flight 🙂

  16. Your arguments aren’t strong – you think being inconvenienced harms the employer more than the employee?

    When talking about failed deals due to travel disruptions do you think this won’t impact the employee’s annual bonus or sales commission when they bring in less revenue?

    My company’s policy is clear cut. The only travel related compensation the employer will get is any fare difference as result of downgrade to a lower class of service or remaining value of a canceled ticket. All other compensation as well as mileage earnings belongs to the employee.

  17. Absolutely. But first lets get miles/points earned on work tickets either taxed as income, or go to the entity paying, not flying.

  18. I doubt most employers would even be willing to deal with the bump vouchers, frankly. Maybe a really small company, but I can’t see MegaCorp’s travel department having a drawer full of these and insisting they apply them to future business travel.

  19. No one who travels for work is an hourly wage-earner, so I don’t understand the italics-emphasized statement that “you’re already being paid for the time.” As an attorney, my *firm* is being paid for my time if I’m working, not if I’m not — no different if I’m in the office than if I’m working (or not) in an airport or on a plane.

  20. This could work if Employees were paid a special hourly per diem for being away from family and the per diem was based on no of hours not nights. Any delay would mean increase in the per diem. Also after 8 hours a day time and a half should kick in and after 16 hours Double time should kick in and if it is on weekend triple time should kick in. If all of this was happening sure the IDB vouchers could go to the company. The employee would make more in per diem at 3X rates than the IDB anyway. Till that time the company is actually profiting from delays as the employee keeps working on their laptop.

  21. I made over $13K last year volunteering to be bumped. At no time did my client suffer as I was just as productive in the airport waiting for the next flight. My company didn’t lose a nickel of billables either.

  22. Also given that travel vouchers for being bumped are given to the individual traveler how would a company recoup them even if they wanted to?

  23. @Lara Don’t be upset. Unless it’s impractical, I’m required to travel during normal business hours because any time traveling is considered time worked for credit hours/ overtime. Travel time doesn’t end until arrival home or at temporary duty station. Voluntary changes for my convenience are on me (time calculated by original route, get to keep compensation) and only allowed on the way home. The only real complaint I hear is the fact that time spent waiting at the departure airport isn’t “official travel time.”

  24. This might work if all of your region was within an hour’s flight. I can imagine flying to Japan during normal hours. First a day to do ATL-SEA, stay the night, then a commute SEA-ICN. Stay the night and then a hopper ICN-NRT. now I’m stuck because the company gets to house me in Tokyo over the weekend so I can fly home (three business days) after I’ve done my work.

    What a great plan. Sounds like your company needs to take the local playbook and stop applying it to everyone.

  25. Federal government employees, in most cases, get compensatory time for travel beyond an eight hour delay. So I could see the argument there. Of course at one time they wanted FF miles but gave up that fight. Personally I avoided gov travel due to all of the ridiculous policies. It was a huge battle just to get reimbursed.

  26. As a general rule, no employee should benefit through the course of their employment in anyway that has not been previously agreed to by the employer and employee. But, most employers understand the sacrifice of travel and don’t want to deal with the hassle of recouping any benefits received.

  27. My employer expects me to be at a meeting that begins at 9 am in Boston. If my 7 pm the night before out of Charlotte is delayed until 11 pm, is the employer inconvenienced? Or am I the only one inconvenienced? Employer still gets what it wanted; I just took it on the chin to sit in an airport for four hours.

    Like someone said, *maybe* if I only flew during work hours 9-5 and maybe if .I took a lunch break every day and *maybe* if the delay were exclusively during that time then you could make a case for the benefit to go to the employer. But a significant amount of my flying happens at the edges of workdays and into what otherwise would be my personal time, so I don’t see a case for the employer reclaiming that.

Leave a Reply

Your email address will not be published. Required fields are marked *