Should I Respond to Demand Letter to Pay Back Business Expense?

[jeff.nyman]

Greetings.

I'm curious if I should respond to a demand letter from a previous employer. I quit the role after a non-refundable airline ticket was purchased for me as a business expense. The demand letter from the company is asking me to pay back the airline ticket cost since the ticket was non-refundable and I didn't use it due to quitting. No policy was specified in the demand letter where an employee has to assume the expense. I also never signed an agreement about assuming expenses. This letter came from the HR department of the company and not a legal firm.

I'm worried ignoring this will be worse than politely responding asking for the legal basis of why I have to pay for the business expense.

I'm not sure if it matters but I live in Illinois and worked for the company here in my state but the company itself is headquartered in Boston, Massachusetts.

 

[PayrollHRGuy]

I would respond denying the debt and asking if they have any document that I signed that would make me responsible for the cost.

 

[LdiJ]

Greetings.

I'm curious if I should respond to a demand letter from a previous employer. I quit the role after a non-refundable airline ticket was purchased for me as a business expense. The demand letter from the company is asking me to pay back the airline ticket cost since the ticket was non-refundable and I didn't use it due to quitting. No policy was specified in the demand letter where an employee has to assume the expense. I also never signed an agreement about assuming expenses. This letter came from the HR department of the company and not a legal firm.

I'm worried ignoring this will be worse than politely responding asking for the legal basis of why I have to pay for the business expense.

I'm not sure if it matters but I live in Illinois and worked for the company here in my state but the company itself is headquartered in Boston, Massachusetts.

Personally? I would simply ignore them. If they tried to ding my credit, I would sue them. That is an employer cost of doing business. Its absurd that they are attempting to collect it from a former employee.

 

[jeff.nyman]

Yeah, I'm torn on this.

I was originally planning on politely responding, simply saying that this was a business expense and I am aware of no policy I ever signed that would require this repayment of an expense. I have to assume that if such a policy existed, they would have been certain to remind me of it in the demand letter. So I almost felt like this letter was just being sent to see if they could just get me to do it, even though there was no justification.

That would suggest ignoring it.

If a policy was presented to me that I did sign and simply didn't remember, I would certainly repay the expense. But, like I said, if such a policy or agreement was signed by me, it just seems odd that it wouldn't have been referenced. But if there is no such policy, then I guess it seems even more odd that they would try this.

Hence my dilemma about how to act. I do appreciate the responses; I did some research to the extent that I could and there doesn't seem to be a lot of consensus of how to react in this particular situation.

 

[PayrollHRGuy]

The only issue I have with you ignoring it is if they do have something you signed (and maybe even if they don't) they may just send it to collection or sue you. And yes you could sue them if they ding your credit but who wants the hassle of that.

I think getting it on record that you don't think you owe them anything is the smarter move. I doubt HR started this mainly because HR doesn't pay the bills. They were simply told to do it.

A little push back on things like this at the beginning may be just what is needed to nip it in the bud.

The letter I propose shouldn't need to be more than two sentences long.

 

[LdiJ]

The only issue I have with you ignoring it is if they do have something you signed (and maybe even if they don't) they may just send it to collection or sue you. And yes you could sue them if they ding your credit but who wants the hassle of that.

I think getting it on record that you don't think you owe them anything is the smarter move. I doubt HR started this mainly because HR doesn't pay the bills. They were simply told to do it.

A little push back on things like this at the beginning may be just what is needed to nip it in the bud.

The letter I propose shouldn't need to be more than two sentences long.

If they are going to send it to collections then they will send it to collections whether they have some published or signed off on policy or not. Sending a letter getting it on record that he does not think he owes it isn't going to make a difference. Logically one would think that it should make a difference, but a company that would try to claw back business expenses from a former employee isn't going to do things logically.

 

[adjusterjack]

Greetings.

I'm curious if I should respond to a demand letter from a previous employer. I quit the role after a non-refundable airline ticket was purchased for me as a business expense. The demand letter from the company is asking me to pay back the airline ticket cost since the ticket was non-refundable and I didn't use it due to quitting.

How much money are we talking about?

 

[cbg]

Not disagreeing with any of the above, but just want to make sure it's understood that there are only two states where the employer is responsible for repaying the employee for business expenses. (I know this is a case of the employer looking to have the employee repay for an unused ticket but the end result is the same.) Illinois, which is the applicable state here, is not one of the two states. Granted, Massachusetts is, but only certain expenses are reimbursable and this would NOT be one of them. In any case, MA law does not apply here.

I'm not saying pay the bill. I'm saying be aware that there is no wage and hour law that is being violated by the employer's request. And quite honestly, I'm not entirely convinced that the employer is in the wrong.

 

[jeff.nyman]

I thank everyone for the replies here. I truly appreciate it.

To answer one of the questions, the ticket cost was $416.00, as was quoted to me in the demand letter. I should note we never bought our own tickets. This was done via a travel agency for the company.

After taking into consideration the replies here, it seems I should send a very brief response, certainly politely worded; entirely fact-based. Simply saying that I'm not aware of having signed any agreement where business expenses like this were required to be reimbursed. If proof of such policy could be provided, then I clearly will have to pay.

I've never worked at a company where normal business expenses had to be reimbursed. The only time I have seen that is if you were attempting to have the company pay for personal development, such as, say, a conference related to your career. In this case, however, the expense was for a mandatory business meeting at the Boston headquarters.

I'm also not clear why, if the company had a legal basis for this, they didn't state that legal basis in the demand letter. For example: "We would like to remind of the policy you signed (see attached) wherein you agreed to reimburse expenses." Something like that.

 

[cbg]

It's not that there is a law giving them permission to charge you. It's that there is no law prohibiting them from doing so.

Is the ticket transferable? If so, I see no reason why you should pay for it. If it is not, I think their position is defensible. Again, I'm not saying pay it; I'm saying they have a valid point.

 

[Zigner]

It's not that there is a law giving them permission to charge you. It's that there is no law prohibiting them from doing so.

Is the ticket transferable? If so, I see no reason why you should pay for it. If it is not, I think their position is defensible. Again, I'm not saying pay it; I'm saying they have a valid point.

I think another question is whether or not the OP had already committed to going before quitting. Also, why is it on the OP that the company decided to purchase a non-refundable ticket?

 

[jeff.nyman]

I think another question is whether or not the OP had already committed to going before quitting. Also, why is it on the OP that the company decided to purchase a non-refundable ticket?

Good question. I suppose I did commit in that the meeting was mandatory so unless you stated you couldn't go by a certain time, the assumption was you were going. Basically tickets were purchased for us and then we were informed by the travel agent that the tickets were available. So it's not so much that I specifically committed as it was that I didn't give any indication that I wouldn't be going. And at the time, I did think I would be.

My reasons for resigning were such that I felt I had no choice except to do so, even knowing the ticket would likely be useless. I'll be the first to admit that I don't like how the situation played out and I do understand from their point of view how they might feel they are owed. What I don't know is whether they have an actual legal basis for enforcing this. From other posts, it sounds like not, even if they have the right to ask me to do so.

I've seen situations where employees got sick before a business expensed flight, for example, and the ticket became useless and those people weren't asked to reimburse. I realize being sick and quitting are two different things but the end result is the same.

 

[PayrollHRGuy]

If the employer ordered and paid for the ticket they made a decision to purchase one that was not refundable or transferable. I don't blame them for doing this in that it saves them money but with that savings comes risk.

This is simply a cost of doing business. Employers spend money on employees that they don't get the value for all the time because of resignations. Unless there is a written agreement (and often even when there is) they have no legal method of compelling the employee to repay them.

Example, this week I had two people that I hired, ran drug screens, background checks and paid for electronic ID badges for who quit within a day or two of hire. I can't make them repay that nor can I take it out of their last pay.

 

[cbg]

If by legal basis, you mean, is there any law that forces you to pay them, no, there isn't.

If by legal basis, you mean, are they violating any laws by asking you, no, they aren't.

The bottom line here is that it's a matter between the two of you. The law isn't going to tell you that you have to pay; the law is not going to tell them that they can't ask it.