Who owns the miles/points?
 

CNN has reported that a German court recently ruled that miles earned for business travel belong to the employer, not the employee.

A German executive who had earned miles on work-related Lufthansa flights that would have bought more than $11,000 worth of air travel took the matter to court when the employer believed it owned the points.

CNN said the judge ruled in favor of the company, stating that miles collected on business trips belonged to the company that paid for the trip.

In Sweden, the company paying for the trip "owns" the miles in the sense that a bonus trip is regarded as a taxable salary. You are supposed to add the value of the trip as income on your tax form.

This has been frequently discussed here and in the Lufthansa Miles and More forum. You might want to do a "search" in those fora.

Quick answer, though:

1. In the U.S. it seems to depend on the terms and conditions of employment. It is reported that most employers do not claim the miles and points, although some (apparently a minority) do require they be redeemed for company business.

2. The U.S. Government used to require (on penalty of discipline, including being fired and having to repay the "value" of any tickets redeemed with miles earned on official travel) the miles and points earned on Government-paid travel be treated as belonging to the Government, but a law was passed early this decade saying that Federal employees could redeem the miles and points for personal travel/use.

3. The U.S. Internal Revenue Service at about the same time as the law mentioned above was passed, ruled that when miles or points earned on travel paid by your employer are redeemed for personal use, there is no requirement to report them as additional "wages and compensation" nor to pay tax on the value of the tickets/rooms/goods/services received through the redemption. They left open the possibility of requiring such declarations and payment of tax, however, if the individual sells the miles or otherwise converts them to cash.

Welcome to FT Magpie as per FT regulations, and thanks for the info!

Also, kados to Counsellor to a great summary re the US situation.

In situations where the employer does claim the FF awards, how are accounts with a mixture of personal and business FF miles handled?

I recall an issue some time ago when Newt Gingrich was speaker, all the Washington Politicians voted to allow themselves to keep and use the miles earned on Government paid travel to belong to the politician for personal for his "duty" to the country. No telling how much of our tax dollars went to F seats (Full fare).

Jim

I believe that as of a few years ago, federal employees get to keep they're frequent flyer miles. At one point, they only got to use them for upgrades.

Yes, they do. You also get to keep vouchers if you volunteer to get bumped and its not your normal work day (ie Saturday or Sunday). You are supposed to turn them in if you get one during your work day. Your time = your money. Their time = their money.

Yes, but in all cases the tickets were purchased with tax payer dollars. I happen to live in the former Gary Condits' "country, and he would fly back to CA almost every weekend to be home with his family. The tickets were spent with taxpayers dollars. Would'nt it make more since to make like the 6th trip using miles instead of taxpayers dollars? Just your tax dollars at work!

Jim

That was one reason, though not the primary one, that a company I headed didn't try to claim employees' miles. Tracking base miles might have been practical, but what do you do about elite bonus miles when the elite status was earned through a mix of business and personal travel? It got ridiculous. (The primary reason, in case anyone is wondering, is that people care about miles. The savings we would have obtained by making employees use miles for business travel would not have been worth the morale hit.)

it's my opinion that the airline owns the mi/pts in that it can cancel the program at any time, change the award mi's required, etc etc....of course the airline has a business to run and has to avoid irritating its customers....

note, i'm most familiar w/aa and my opinions may not apply to others...

It is regrettable that former Congressman Condit could not have spent all of his time back home in CA with his family. Of course, then there would not have been all the titillating scandal and tragedy that he contributed to in Washington.

With my previous company, the employee handbook stated that miles and points were the property of the employee, but such membership in programs could not influence ticket purchase decisions made with company funds.

I'm okay with that.

I can't find any documentation on my company's policy - guess I'll keep 'em.

I like the my time my points look at things. I am contracted for 8 hours a day. So I see it as this. If the trip takes more then 8 hours including the time in the location I was traveling to then the points are mine.