Didn't we had that thread over and over again? I guess often enough the argument was that the IDB, VDB, downgrade compensation and other compensations are due to the passenger - not to the one who paid the ticket.

Personally, I think the money should go to the company if not arranged differently. All companies I worked for actually always allowed the employees to keep the money as it created more trouble in accounting than it is worth for them.

Similar policy in my company as well (though we split the difference 50/50).

Since the difference was usually in excess of £1,500, there were plenty of people who took £500 cash!

Note that in the case of EU regulations, compensation for IDB is for the person travelling, irrespective of who is paying for the booking.

If something occurred that required an increase in fare or other expense on a business trip, should you pay out of your own pocket? This is the corollary; the difference should be returned to the employer. If the employer decides that the cost:benefit is not positive for the company and allows the employee to keep the difference, so be it.

Personally, I think that the frequent flier points for company-reimbursed travel also belong to the firm. However, the custom has become that they belong to the employee as a perk. I do think those points should be subject to income tax though.

Then I hope you're self reporting them on your yearly tax return.

With regards to the OP's question, no I wouldn't give the funds back. If I take a job knowing travel will be in business class, I expect to be in business class during travel. If for some reason the airline overbooks and downgrades me to coach, the only one who is suffering is me, not my company. I would keep the difference and not feel bad at all about it.

For most people it's scant reimbursement for the agony of being away a lot, usually in a non-private jet kind of way, rather than a perk.

Taxing them is a total nightmare, and will likely never happen, since valuation of a currency with limited use and acceptance is next to impossible.

How compensation is paid and to whom is not relevant as to whether the employee has an obligation to pay it over to the employer and whether, if not paid over, it is income (at least in the US) and must be reported to the IRS and thus income tax paid on it.

As a starting point, look to your employer's policy and follow that. Most employers have moved away from requiring that FFP earnings be used only for work-related travel and most have done the same with routine vouchers.

But, this is not necessarily true for larger cash payments as under EC 261/2004 and DOT IDB. It is also not necessarily true for vouchers and credits of significant amounts.

Companies which do not have policies ought to. It is simply asking for trouble to leave issues such as this hanging out there and having people later say, "but I thought...."

Lastly, the notion that your employer won't find out and thus it's OK (passing the legal and ethical issues), is simply wrong. If your employer uses a corporate TA, many use software which may produce all manner of reports from any change to a PNR, including ticket reissues, payments and the like. If the employer cares, those reports are readily available on a routine or random basis.

The pre-EC 261 "payment of the fare difference" airlines used to practice was definitely owed to the entity that paid for the ticket.

But the modrn IDB and downgrade compensations are owed for inconveniences and expenses. To my knowledge there is no established right who in the end is entitled to the final compensation.
But that is US only, I believe, also due to the lack of meaningful regulation regarding transport liability.
Oddly enough, unlike German employees, the Americans can mostly keep the moles earned from corporate travel.

So 'ethics' and policies seem to be fairly wanton.

My employer asserts ownership over any certs etc. earned for travel they reimburse, even if it's a customer service gesture for inconvenience to the passenger. As I result, I would never take a VDB, voluntary downgrade, etc. on such trips.

When my travel is reimbursed by some other source, the rules are less clear as they would depend on the particular organization that is paying, but when I've brought up such issues, I've always been told to just keep the voucher or whatever. Anything else becomes a complicated mess.

I do not accrue FF points/miles that are paid by my employer; my points are self-paid.

You are clearly not a manager. Try, if you will, to think like the manager.

You (manager) are responsible for "EE's" (Entitled Employee's) expenses if untoward things happen during travel. Example: Huge snowstorm: delayed in city where important meeting is occurring for an extra day...extra meals and hotel costs, appropriately paid for by company since it is not the employee's "fault."

Correspondingly, why should you (management) not be owed the difference if something happens that saves money on your report's trip? I have seen the expense reports of many EE's. EE gets a cold on a trip? EE buys some OTC cold remedies...expense that. Would the EE have gotten the URI had the EE not been traveling? Who knows? Why is the company liable for the cold remedy? This is a small example but, from the perspective of justice and logic, you are wrong.

Lemme ask you this? I believe that most workers, (EEs included) will do their best even under adverse conditions like traveling coach instead of Business or First. However, given your response, and those of others who claim that their performance is so important that they MUST travel J/F, if your business meeting does not go as well as you wanted, if called on the carpet for the bad outcome, will you bring up the downgrade to Y? I don't know you but maybe you would.

Like I said, management may not feel that the cost:benefit is positive to capture all of these expenses/debits and that is the company's prerogative. It does not make the practice right from an ethical perspective just because the company has entitled employees whining or the accounting costs are "too high."

All employers advise job candidates of the travel requirements. Thus, when you take a job with a lot of travel, you understand that there will be the "agony of being away a lot" and you are to be appropriately compensated. If perks "earned" for work travel can be used for personal use, I think they should be taxed as income at some rate since points/miles have monetary value. You are right; it's difficult to value points/miles although most people value them at 3c per point so I think it is doable.

IMO, some FTers act like they are the only ones with the skills to do a task or get a deal done. Maybe that is true but, probably not. Even if we look at someone as unique as Steve Jobs, to date, there is no good evidence that Apple can't survive without him. I have worked long enough to know that no one is indispensable.

Refund = refund your boss?
 

Not a comment on the topic at large, but rather about the taxing issue which has come up before. I don't understand it, one cannot tax something that does not have a commonly accepted or absolute value.
3c per point is wrong. I don't value points anywhere near this. Also, most people would agree that 1 point or mile is not worth the same among various programs. Airlines miles, hotel points, other various card loyalty systems are all different.
So not only would it be impossible to come to a consensus value for these instruments, the program's themselves explicitly state they are valueless. This is likely for a variety of reasons, but they all retain the right to take all your miles away if you abuse the system or other issues. If the points have an absolute value, then this no longer becomes possible without much, much more headache on the program's part. Without an absolute value, I don't think they can be taxed.

I would never work for a company who required me to use my personal credit for travel. I could never afford the plane tickets I buy on behalf of the company if reimbursement was slow.

That being said, we are specifically not allowed to financially benefit from a downgrade, so I assume someone at some point found a way to do it, was caught, and now it's in our policy. I do believe we are allowed to keep IDB vouchers.

Couple of thoughts:

1. Not all employers talk about travel requirements and policies during hiring. No one said a word to me about them. I knew it would necessarily involve travel, but felt no need to talk about it. Moreover, jobs can change dramatically once you are actually doing them, whether you like it or not. Compensation wise, our people who travel don't earn more than those who do not within the same job title.

2. Per my firm, my FF miles and points are mine. Also per my firm, I couldn't expense cough syrup while travelling (reason being I couldn't expense it if I bought it while at the office and was feeling rough either). Doctors appointments, on the other hand, are covered overseas in the same way they would be if I was at the office.

3. Compensation given for delayed flights or downgrading is fuzzier, there is nothing in our written expense policies. If I was given, say, $100 for a 4 hour delay at the airport, I might choose to purchase access to the lounge with it, so I could work or purchase food and drinks. Likewise, if I was downgraded, perhaps I purchase food and drink for on board, that would have been included had I been in First. Maybe I buy a battery back up for my computer, as coach doesn't have the charging port that First does so I can work on board. I would feel comfortable explaining the spend of compensation in any of those scenarios and, as it is not spelled out in any written expense policy, that is what is expected I would do (aka use my best judgement).

What I would not do, is pocket the cash, and expense for the food and drink / lounge access / battery back up.

4. Refunds and / or credits - if it is a cash refund, it gets paid back to the firm or, as that is quite a pain to do, offset against a future expense. If it is a travel credit, only usable by the original traveler, the employee only has to pay it back to the firm if they choose to use it for personal travel. If they don't make use of the credit and it expires, then it is as if the credit was never issued (or of course, if used for firm business, it is just used instead of cash). If the credit is transferable, and the employee knows they will not use it, there are mechanisms for transferring it to another employee (which can then get really confusing if used but flight is cancelled, and a cash refund becomes due, as I found out last year!)