What do I do when I book travel at my expense, but my employer won't pay until the travel has happened?

Question

I work for Contracting Firm X which coordinated a long-term contract with Company Y (which is where I go to work each day). Firm X pays me and offers me benefits, handles basic HR functions, etc. However, they do not offer a credit card for me to use for expenses. "Just keep track of your expenses and you will be reimbursed in an upcoming paycheck" is basically the understanding we have. There is nothing in the contract I signed regarding expenses, timeliness of reimbursement, or anything to that effect.

So Company Y asked me to travel overseas and gave me an itinerary to copy. The bill for the plane ticket alone came to thousands of dollars. Since neither Firm X nor Company Y gave me a credit card, I put it on my personal card thinking "Lucky me, look at all the points I'm getting". I submitted the expense report the same day and it was approved by all relevant parties (my manager at Company Y and the contact at Firm X). I thought I'd get an extra big paycheck that week to help pay off the massive credit card bill that was coming my way.

That was 1.5 months ago. After numerous follow-up communications on my part and stalling on Firm X's, they finally told me that they have a policy of not reimbursing travel expenses that are large (larger than some unspecified amount) until the trip is actually taken to prevent someone from taking the money and quitting.

As much I can understand their rationale, I can't for the life of me imagine how this is a good practice. It feels burdensome for a person with a limited line of credit to assume that debt for more than one billing cycle.

So, If I were to go into debt because of this cost, would I bill them for my interest payments? Luckily I have enough in my savings to cover the credit card bill, but if I just paid the minimum and accrued a balance, that could hurt my credit and future ability to do exactly this thing they want me to do. And my other question, Is this a common practice, or am just at the mercy of an unfortunately stingy contracting firm? Is there anything I can do to get paid back quicker next time I need to travel?

Note: I understand that there are details between Firm X and Company Y that I don't know about (it might take months for them to get reimbursed) which might be making things more complicated.

Answer 1

I guess you haven't traveled yet, and they're offering to pay you after you traveled.

NOTE WELL: Credit card companies love love love it when you carry a balance. Unless you don't pay at least the minimum bill on time, carrying a balance is GOOD for your credit score, not bad.

As a contractor, you're basically running a small business. Sometimes small business people take the risk of customers paying their bills slowly. You've taken that risk in this case, because your company balks at paying for travel in advance.

What can you do about it? Not much at this point. Carry the balance on your credit card until you travel.

Pay your credit card bill out of pocket, but deduct the amount for this ticket. Pay at least the card's minimum.

GET TO KNOW THE PERSON WHO PAYS YOUR EXPENSE CLAIMS. Ask them if you can submit a claim for your credit card interest expenses as well as the cost of the ticket. Ask them how to write your claim so it gets approved rather than rejected. Then write your claim for all your out-of-pocket expenses.

Make sure they don't apply witholding taxes to your expense claim amount. It's not taxable wages, it's money they owe you.

Going forward, get a dedicated credit card for business expenses, and don't use it for anything else. Then you can use it for this kind of thing and keep your costs sorted out. Don't get one of those green Amex cards that require you to pay it off each month, obviously.

Going forward, make your travel reservations at the last minute, even if it's much more expensive. These guys have made it clear they don't want to take the discount on advance reservations. (You can check this with your new friend the person who pays your expenses.)

Think of the interest as a cost of doing business. If you can get it paid back, great. If not, Is a couple of hundred dollars worth a day of your time and hassle?

Answer 2

I have a similar issue in my place of work where we're expected to pay for work-related travel expenses and then claim it back (no matter how much).

I found that telling my boss that I can't go to the meeting / conference / whatever because I can't afford the fare has them flashing the corporate credit card quicker than you can say "pay up!" ... there is literally nothing in my contract of employment that states I must have sufficient spare cash to pay for whimsical (or vital) jaunts to wherever they fancy sending me at all times, so I say if they want me to go, they can pay...

This rule has never failed me yet (with this current employer) and is based on very similar experiences to the OP in the past.

Answer 3

Is this a common practice, or am just at the mercy of an unfortunately stingy contracting firm?

You are at the mercy of whatever contract you signed and the legal practices of the firm you work for.

As you wrote "Just keep track of your expenses and you will be reimbursed in an upcoming paycheck" is basically the understanding [you] have.

I agree that it is burdensome and I would ask that they consider at least a partial payment. But it appears this is what you agreed to.

That was 1.5 months ago. After numerous follow-up communications on my part and stalling on Firm X's, they finally told me that they have a policy of not reimbursing travel expenses that are large (larger than some unspecified amount) until the trip is actually taken to prevent someone from taking the money and quitting.

Sounds like they are encouraging you to book your expenses at the last minute. While that's often a more expensive way to do it, the cost will be borne by the company.

Answer 4

At my company, we are allowed to submit for airfare before the trip because, as you noted, it can be quite large. If they won't do prior reimbursement, then submit for it as soon as you fly. Like that morning, while you are waiting at the gate.

Be prepared for future flights, and push for them to pay for the ticket.