can my company make me pay the costs of a business trip if I resign before the trip?

by Ask a Manager on November 26, 2011

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A reader writes:

My company has an annual meeting where all of our sales staff from across the country come together. People from marketing and a few other departments are also in attendance, as is the entire executive management team. Since people are flying in from across the country anyway, the meeting has typically been held at an all-inclusive resort hotel outside the country (e.g. Mexico, the Dominican Republic, and a couple other spots). The meeting is mandatory.

Plane travel arrangements are handled by our company’s travel coordinator. She books our tickets for us approximately 3-4 months in advance. When she sends us the information regarding our flights, there is always a note in her email stating something to the effect of: “If you resign prior to the trip, you will be responsible for reimbursing the company for the cost of the airline ticket. You will own the ticket and can change the ticket for your personal use. You will need to write a check for the cost of the ticket, or have the amount deducted from your final paycheck.”

I’m going to assume this is legal (since most of the time when people ask you that, your answer seems to be yes). However, I’m wondering if it is common? I have never encountered this at other companies, but in all of my past jobs I rarely traveled for work. Wondering what your thoughts are on this kind of policy, especially since my tickets for the upcoming trip have already been purchased, but I’m in the process of looking for another job.

I’m 99% sure this isn’t legal, actually. (Congratulations! That’s a rare answer around here.) I’m not a lawyer and I wasn’t able to turn up anything on this with a pretty extensive Google search, so I’m just going on semi-informed instinct here, but generally speaking, if you don’t agree to assume an expense that someone else has already paid for, that someone else has no standing to require you to reimburse them.

In other words, your company can’t just announce on their own that you’re responsible for reimbursing them for various employer-paid items if you leave; you’d need to agree to that arrangement, which you haven’t done. (Think, for instance, of programs where an employer pays for college classes but there’s a signed agreement that you’ll reimburse their costs if you leave before a certain amount of time is up. A signed agreement — because otherwise they’d have no standing to enforce it.)

Leaving the questionable legalities aside, no, this isn’t typical. Travel costs for work-related trips are a normal cost of doing business. The employer is requiring the trip, so they assume the risks — the risk that you might not be working there when the trip rolls around, the risk that you might be sick and unable to go, and the risk that the trip might be cancelled entirely for reasons that have nothing to do with you.

There are lots of costs that employers don’t like (for instance, the costs of preparing for a new employee who backs out of the job right before starting, or having to pay unemployment benefits for a fired employee who put in no effort), but they’re still normal costs of doing business.

This is also just a crappy thing to do — to require you to attend a work event outside the country and then try to stick you with the cost of an international plane ticket if you end up moving on before then (and not give you an out if you don’t want to agree to those terms).

In any case, I suspect it’s utterly unenforceable anyway, so if I were you, I’d just ignore it. If you happen to leave your job before this trip and they try to deduct the cost of the ticket from your final paycheck, let them know (nicely) that you never agreed to assume that expense and that they’re not authorized to deduct it from your paycheck. A letter from a lawyer could put some teeth behind that, but hopefully they’d be smart enough to consult their own lawyer as soon as you raise the issue. (And that lawyer should set them straight.)

{ 59 comments }

Anonymous November 26, 2011 at 4:33 pm

My first thought would be they cannot deduct it from the paycheck since that’s payment for work you have done and therefore, they owe you for it.

Ask a Manager November 26, 2011 at 4:45 pm

Yes. Laws on paychecks are very clear that you must be paid in full for work you’ve done, by a certain number of days after you leave (number varies depending on what state you live in). If this amount is in dispute, they could get in big trouble by withholding it from her check (and penalties for not paying on time tend to be high).

Anonymous November 26, 2011 at 4:36 pm

By failing to advise the company at the time of the receipt of the ticket (with the note) that you do not agree to that term, then you are implying an agreement to that term. Unless and until you advise them that you don’t agree, there is the implied agreement between you and the company based on your failure to state your disagreement. Particularly with the history of failing to state your disagreement each year you got the ticket with the note, this implies you do in fact agree to that term.

Ask a Manager November 26, 2011 at 4:44 pm

I don’t think that would hold up legally. I’d love for a lawyer who’s familiar with employment law specifically to weigh in. Given the number of court cases on what an employer can and can’t require you to pay for, I’m close to positive they wouldn’t be able to enforce this.

Anonymous November 26, 2011 at 5:23 pm

I AM a lawyer.

Ask a Manager November 26, 2011 at 6:35 pm

Yeah, but an employment lawyer? Case law is likely relevant here, so I’d love to hear from someone familiar with it. I may email Donna Ballman!

jmkenrick November 26, 2011 at 8:46 pm

I would support that move. I’m pretty curious.

Mike C. November 26, 2011 at 8:16 pm

You would have sited a case. I think you’re full of it.

Mike C. November 26, 2011 at 8:16 pm

*cited, sorry.

Cube Ninja November 27, 2011 at 3:21 am

I am NOT a lawyer, but I’m curious which state you’re practicing in that would allow an employer to prevail in this type of scenario on what would AT BEST be described as implied consent. I think you’d have an extremely high bar to meet on that one in front of a judge if you were trying to recover something that is clearly a cost of doing business and not of personal benefit to the employee.

It appears that MN, WI and WA have as part of their labor code a provision which prevents an employer from making deductions in this type of scenario unless the employee authorized the deduction in writing. My guess would be that nearly every state does, as that’s the type of law which prevent nonsense business practices as described by the OP. I really can’t see how the company would legally be able to deduct the cost of a plane ticket from final wages (in addition, depending on the plane ticket, the deduction could potentially reduce the employee’s wages below the minimum wage, would would in itself prevent the deduction, if I’m reading things correctly).

As AAM also points out, there are any number of reasons that the airfare might be unused – if the employee fell ill or was unable to go due to a death in the family, etc., would it be reasonable (or legal) for the employer to demand reimbursement for the airfare?

If you have some case law on this or specific citations, that seems like it’d be extremely relevant to the topic. :)

Anon November 28, 2011 at 2:11 pm

I’m almost a lawyer (one C&F interview away) and I totally disagree with this. Implied acceptance doesn’t hold up very often in contracts scenarios.

Anonymous November 26, 2011 at 7:26 pm

Paycheck anonymous commenter from above here….

I understand where you are coming from, but is their policy considered null and void if it is illegal in of itself? In other words, even though you are consenting, as you stated, to the policy, including the part where they will take it out of your paycheck, the understood contract is null and void since taking money from the paycheck is illegal?

jmkenrick November 26, 2011 at 8:45 pm

Not a lawyer, but my understanding always was that a contract isn’t legally binding if what it describes is illegal. As in, technically I could sign a paper saying that my company can fire me because I’m a woman; but it wouldn’t be legally binding, since just because I agreed to something illegal doesn’t make it ok for my company to do.

That said, I have no idea if what this company is doing is legal or not. But if it’s not, then I don’t think the employees signing a contract (or an implied agreement, or whatever) would make it alright.

Cube Ninja November 27, 2011 at 3:25 am

More I’m not a lawyer stuff:

My understanding is that in most states, if a contract contains a provision which in itself is illegal, that specific provision is null and void, but the remainder of the contract remains in effect.

So, for example, if I’m leasing an apartment from you and you have a provision which allows you to break my kneecaps if I don’t pay the rent on time, that provision wouldn’t be enforceable, but the remainder of the lease terms would be, assuming that they were legal. If you were to put this provision into a lease, I’d be really afraid of what might happen if I was up for eviction! :)

My non-lawyerly opinion is that if there was a specific written agreement, depending on the state this is happening in, it very well could be legal, but only if it’s in writing.

Adam V November 28, 2011 at 10:03 am

I think most contracts include a section towards the bottom that states something along the lines of “if any portion of this contract is found to be unenforceable, the rest of the contract is still in effect.”

I wonder if that means that the *lack* of that statement implies that if any part of the contract is null and void, the entire thing is wiped out?

Mike C. November 28, 2011 at 10:43 am

I think it simply opens up the issue to argument. Having it stated plainly simply avoids the issue.

Anonymous November 27, 2011 at 10:07 am

If it were legal for the company to do this, it could open up all sorts of useful possibilities. For example, take the same policy, but book the annual trip two years in advance for everyone. Then negotiate that with the resort that the cancellation fee is 1000% of the “rack rate” (rather than the discounted rate the company will have paid). Could do wonders for minimizing staff turnover.

Mike C. November 27, 2011 at 1:53 pm

This is exactly what I was thinking of. Only, instead of a resort trip we could be talking about the donuts at a meeting. I’ve seen sleazy employers do lots of things, and this simply isn’t one of them.

I have a feeling that the “lawyer” who posted above is anything but.

jmkenrick November 27, 2011 at 4:08 pm

That’s a good point. There must be something in place to keep companies from doing that.

Joanna Reichert November 28, 2011 at 11:24 am

Yeah – implication. That’s nothing that’ll hold up in court.

Erica B November 26, 2011 at 9:08 pm

sounds pretty sleazy to me, but I’m am not a professional in anyway. Seriously though what if, you had surgery or became seriously in during the time, and you couldn’t go on the trip, a death in the family, maybe your too pregnant to fly, or just don’t fly,whatever- It doesn’t seem right that they should be able to get away with this. I’m curious if anyone has questioned this policy, and whether or not this annual event was made clear during the hiring process that it was required, because if it were me and it wasn’t made clear, I’d have to throw a conniption fit because I have children that can’t be left at home by themselves. Regardless of the fact that even with multiple months notice to secure care for the week, it just wouldn’t happen- as in I don’t have anyone able to do that.

A Lawyer November 26, 2011 at 9:24 pm

I am a lawyer. I do not buy the argument about implied consent. There is no meaningful opportunity to decline to agree, since it is a mandatory work trip.

Here’s how it will go down. You resign. They try to make you pay for the ticket by check. You refuse. They might try to take it out of your final paycheck. You call your state DOL. You win. End of story.

Better yet, if they start making noise before your final paycheck is issued, offer to put your boss on a conference call with someone from your state DOL to “sort things out.” Odds are, it won’t get that far.

fposte November 27, 2011 at 10:34 am

There’s the real matter–not so much “is it illegal” (lots of things are illegal but aren’t going to have any consequences, or no consequences without spending more in lawyer’s fees than the initial loss) but “what will happen.” I particularly like the pre-emptive move of getting the DOL to weigh in before the final paycheck gets cut. This doesn’t sound like a tiny company; I doubt they really want to get on the DOL radar.

However, it’s also worth thinking about the terms you want to leave on. I’m still not suggesting you reimburse them for the ticket–that’s insane–just that you might know whether it makes more sense to wait until you’ve actually left and just burn the bridges or to handle it pre-emptively and, hopefully, more tactfully while you’re still there.

That HR Girl November 29, 2011 at 12:18 pm

Agree with the lawyer on this one…

My state wasn’t one of the ones mentioned as having specific rules about written consent to deduct from a paycheck, but we operate as if it were… meaning even if we accidentally overpay someone a few dollars, we have them sign before we deduct that from the next paycheck.

Like Lawyer says… You quit, they ask you to pay, you don’t, they try to take it out of your check, they can’t. My guess is that this request would have to travel through multiple levels of the company in order to be executed, in which I would hope that some competent HR person, payroll administrator, or manager would say “Hoooooold on a sec. We can’t really do that. It’s not worth being sued/investigated by DOL/etc”.

Anonymous November 27, 2011 at 12:58 pm

Does the OP know if that has actually happened to anyone? It would be interesting to hear how it actually pans out.

Donna Ballman November 27, 2011 at 1:02 pm

Some states, but not all, prohibit any deductions that are not for the benefit of the employee (such as health insurance). Some states and local governments would also consider this wage theft. Wage theft laws are very specific to the area where they’re passed, so you might want to check with an attorney who handles wage/hour issues in your city/county.

There are a few issues that might arise under the Fair Labor Standards Act with this. If the deductions reduce you below minimum wage or take away from earned overtime, then they’re illegal. If you are an “exempt” employee, taking these deductions might make you non-exempt, which means you can start calculating any overtime they owe you over the past 2 – 3 years.

It’s always worth a call to the U.S. Department of Labor and your state’s labor department to see if this is something they would handle. They’re probably overwhelmed, but if they would get involved it could save you some legal fees.

Ask a Manager November 27, 2011 at 3:00 pm

Thank you, Donna! This makes lots of sense. (For anyone who doesn’t know Donna’s blog, click on her name to go to it — it’s excellent.)

CL November 27, 2011 at 4:55 pm

It honestly depends on the state. In Indiana, if she’s an at-will employee, then she could be forced to pay for the ticket. Like the first lawyer said above, there’s implied consent because she has repeatedly accepted the terms for a number of years. In Indiana, if you accept a job offer, you accept all the terms in the employee handbook if you do not object prior to accepting the offer.

It looks like it would be illegal for the company to withhold the money from her paycheck. She would have to write the company a check to reimburse the company in the event that she resigns prior to the trip.

Mike C. November 27, 2011 at 5:38 pm

Can you find an actual, documented example of this happening in the real world?

fposte November 29, 2011 at 3:31 pm

Even if it has happened, it’d be pretty hard to find amid all the employers in the U.S. (though there are plenty of instances of requiring employees to pay stuff back, such as relocation costs and education subsidies, if they leave prior to agreement); what’s more, it could be the first time it’s happened and still be legal.

Similarly, the problem with something that isn’t illegal is that it’s often hard to point to something that demonstrates that–law, especially labor law, is generally written to say what you can’t do rather than itemize what you can.

Sounds to me like this one can’t be called in advance, especially without knowing the employee’s state, the value of the ticket, and the employee’s salary.

Anonymous November 27, 2011 at 7:52 pm

In Indiana, if you accept a job offer, you accept all the terms in the employee handbook if you do not object prior to accepting the offer

I suspect that the terms of the employee handbook still have to be legal. Something like this could be nullified by the relevant labor laws.

Cube Ninja November 27, 2011 at 8:01 pm

Show me an employer that provides a fully copy of their employee handbook prior to a job being accepted and I’ll show you a purple elephant that dances to Lady Gaga.

As may be obvious, I completely disagree with your assertion regarding employee handbooks. That also assumes that this company has one. The employee handbook isn’t really relevant here, I’d think, unless this specific travel policy is clearly spelled out and again, the employee agreed to it in writing.

Think of this from a best practices standpoint – just because you CAN do something doesn’t necessarily mean that you should.

Vicki November 27, 2011 at 8:29 pm

I worked for a company where the Employee Handbook was basically made from a copy of a “Boilerplate” handbook. ONe if the items was “No alcoholic beverages on the premises”.
The Company had a weekly beer bash in the conference room. The Co president had a bottle opener installed under the table t make it easier to open the bottles of beer.
So much for “the company handbook”.

KayDay November 28, 2011 at 10:20 am

I actually got a copy of our complete employee handbook with my offer (prior to accepting it)–When do I get to see the elephant? ;-D That’s said it was pretty slim and really only included the standard/required policies. I’m not a lawyer, but I’m pretty sure that if it had an illegal statement (such as no over time will be paid to non-exempt employees) that provision could not be enforced, since it’s illegal.

What I do know is that I work in a field where there is a lot of travel and I have never in my life heard of employees being forced to repay their tickets if they left. I only know of one situation (in 2006) where someone left before a trip but after the ticket was purchased–the travel agent was able to transfer it an employee who would not have otherwise gone on the trip.

Anonymous November 28, 2011 at 10:28 am

Cube Ninja,

Show me your purple elephant that dances to Lady Gaga, please. My company emailed me the handbook before I started, and I had to sign a piece of paper stating that I read it.

Joanna Reichert November 28, 2011 at 11:33 am

I think it depends entirely on the culture and how effective the management is.

In my current position, I had the same as you – a full half-day of going over the handbook, procedures, what-have-you.

However, in my last position it was essentially, “Here’s the handbook – you should probably read it – don’t expect to be notified of changes.” Not just the handbook – SOP and the like as well – how frustrating! Many other employers I’ve had were the same way.

fposte November 29, 2011 at 3:33 pm

I don’t care about the employee handbook any more–a purple elephant that dances to Lady Gaga would be *awesome*.

Joe December 2, 2011 at 5:13 pm

I thought Lady Gaga _was_ a purple elephant.

Anon November 28, 2011 at 11:28 am

My purple elephant only dances to Justin Bieber. Go figure.

Donna Ballman November 28, 2011 at 11:39 am

I see all kinds of crazy stuff with handbooks. Many employers in Florida have people sign that they’ve received it but don’t give a copy. One notable HR person kept the handbook locked up, saying it was confidential. I still don’t get the point of that.

Many handbook acknowledgement pages say specifically that the handbook is not a contract. Then employers try to enforce provisions like arbitration and whatnot against employees, but when the employees try to enforce it the employer waves the no-contract language around.

I always tell people to assume the courts will enforce these provisions (at least in anti-employee places like Florida) and govern themselves accordingly. While it’s possible to convince a judge that no-contract means just that, it’s best to assume the worst.

Question Poster November 28, 2011 at 10:12 pm

Thanks everyone for your thoughts. It sounds like if I do end up resigning prior to the trip, I may have a leg to stand on regarding the plane ticket cost (although it would definitely be a good idea to get in touch with the state and U.S. Dept. of Labor, just in case they have any additional insight.) I just really don’t want to be stuck with a $600+ plane ticket, especially since I’d probably have to pay a bunch of additional fees just to use it (to have the dates / destination changed, etc.)

In response to a few of your questions, I do not know if this policy has ever been enforced, but I wish I did! As for the handbook question, I did not receive a copy prior to me accepting the job (although I didn’t ask for one either). But even if I had, I’m not sure this particular section would have caught my eye. Travel was not part of the job description for my role. I wasn’t even made aware of the annual meeting until after I was hired, and I wasn’t expected to attend it during my first year of employment. It was only in my second year that my team was expected to attend.

Regarding the issue of “implied consent,” I feel like I’m stuck between a rock and a hard place. I basically have to choose between saying nothing (and implying my consent) or saying something (and implying that I might quit). Neither option has much appeal, but I personally don’t want to deal with the repercussions if people suspect that I plan to leave. I’m just hoping they won’t make me fight the policy, if push comes to shove.

Interviewer November 29, 2011 at 10:10 am

You do not need to worry about implied consent. There are quite a few states that expressly forbid deductions from paychecks that were not authorized in writing prior to the deduction being made. Some will allow it, but only if it benefits the employee. And in a few states, even with a signed authorization form, they can’t deduct something like this from your check. Even if implied consent actually worked for employment law, you still can’t imply your consent to something they’re not allowed to do in the first place.

To me, the best route for the company is to buy refundable tickets, or ones that get credited back to the company for use at a later time, in case of cancellation. 3-4 months is a long time, and anything could happen.

Hope that helps. Good luck to you in the job search.

That HR Girl November 29, 2011 at 12:53 pm

That’s what I find weird about this situation… if the company is big enough to have a travel department, they should be big enough to have a deal in place with a preferred airline (or an Orbitz for Business, or the like) that allows tickets to be transferred to other people or refunded/used by the business another time.
I don’t travel much for my current company at the moment but did frequently at the previous one, and it was quite common to cancel/reschedule trips due to workload.

KellyK November 29, 2011 at 10:54 am

The implied consent issue would be something to ask the State and US DOL when you get a hold of them. Not being a lawyer or an HR person, I obviously can’t say either way, but I hope the general consensus here is right and you don’t have to worry about it.

If it turns out that you do, and you feel you need to specifically not consent for CYA purposes, you can point out that you have no intention of leaving in the foreseeable future, but it’s humanly possible that something unforeseen could necessitate your leaving, and on the off chance that your spouse’s job moves to another state or what-have-you, you want to make sure they’re aware you don’t agree to pay for the tickets.

Anonymous November 28, 2011 at 11:23 pm

The ironclad legal answer probably depends on the state in question. Having just worked on a project related to employment law, the only thing I ever saw cited as a legitimate last paycheck deduction was if an employee walked off with a uniform or company property. Actually I once had a free hotel room at a national conference thanks to a friend switching jobs after the previous employer had already covered the cost of her hotel room and rental car. In that situation, her soon-to-be-former employer paid the bill and she was not liable for anything.

Making you sign an agreement to pay sounds a lot like they’ve had staff hold off resigning until after their company paid trip. Or when I did an internship with a big Seattle software company and the department made us sign an agreement to reimburse them for moving expenses b/c a previous intern jumped ship 2 months after arrival.

Ask a Manager November 28, 2011 at 11:42 pm

Ah, but that’s when the employee signs an agreement (like your example of relocation expenses, where a signed agreement is common). In this case, the OP hasn’t been asked to sign an agreement; she’s simply been told she’ll need to reimburse the ticket cost, but not ever agreed to it.

Anonymous February 21, 2012 at 6:33 pm

My husband is going through something very similar right now. He was working for a developmental sports team, the owner lives and operates out of state, and the coach is the GM.. conflict of interest??? Anyways… My husband resigned shortly before, but not because of, a trip to Alaska. The GM called and left a message saying they were going to charge my husband for all ticket costs. When my husband tried calling back, nobody answered or returned his calls or emails.
He never signed a contract with these people, never got a handbook, there is no HR to contact either. They also charged him for the postage to return his check and mail it back.
We’ve also had to deal with paychecks bouncing, and the “direct deposit system” failing…… Can we get that money back for the tickets and postage? They took half his check! Please help!

Ask a Manager February 21, 2012 at 8:00 pm

Definitely read through all the advice above, because it applies here. In addition, what state are you in? I’ll give you a link to your local labor agency who might intervene.

Anonymous February 23, 2012 at 5:56 pm

We are in KS and finally heard back from our DOL! We got some paperwork turned in, but they said it could take up to 2 weeks and my husband is worried about what his former employer may do legally. Even though I told him w/out having signed anything, there isn’t much they can do. I guess now we just play the waiting game….?

Ask a Manager February 24, 2012 at 12:08 am

Ah, it sounds like you’re already hooked up with the correct state agency then? Good. And yes, without a signed contract, they’re almost certainly not allowed to make this deduction from his pay. It’s good that you have the DOL involved. Let us know how it turns out!

Anonymous February 25, 2012 at 2:03 pm

Will do!!!!!!

Anonymous March 13, 2012 at 6:18 pm

They are disputing the claim we filed. Now my husband has to fill out his statement AGAIN and then wait for some conference call hearing. This is such bullshit. I hate Don Stone!!

Anonymous March 19, 2012 at 2:07 pm

The department of labor told him he had to pay. We should be getting the check next week. Although he is now threatening to take my husband to small claims court to get it back…..

Ask a Manager March 19, 2012 at 3:07 pm

That’s great — congratulations on winning this!

Anonymous March 19, 2012 at 6:52 pm

So he can’t take my husband to small claims court?

Ask a Manager March 19, 2012 at 7:25 pm

I don’t know for sure (not a lawyer, and don’t have enough details), but I’d be pretty damn surprised if he could successfully win a suit against you for something that the Dept of Labor ordered him to do! You know, given that the Dept of Labor enforces the law. (Keep in mind that he could certainly bring a frivolous suit, but he’d presumably lose.)

Anonymous March 20, 2012 at 8:14 am

Ok. Thank you!!! I really appreciate your help and concern!

Mai June 4, 2013 at 9:08 pm

I’ve got another scenario for you – the opposite. Let’s say a company prepaid a business trip for you – nonrefundable airfare, and hotel accommodation. Then you’re fired. They’re not getting any money back – the money paid is nonrefundable. If they fail to cancel the tickets/hotels (All in your name), is it illegal to take said trip.

Anonymous January 7, 2014 at 3:30 am

Hello,
I am going through something similar to the scenarios stated about. I accepted a job offered, but when i presented my two weeks noticed my current employee offered me a position i wanted, so i am stating. I notified this other company right away, (my start date is not for another three weeks) They emailed me back stating that they had purchased nonrefundable tickets for me to come to the office for a week training and i need to pay them back because they cant get their money back from the airline. I did not sign a contract or any document agreeing to pay for any of these expenses. I dont believe this my responsability at all, what are your thoughts?

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