In her early years at a large food and beverage corporation, “I was expected to front at least $3,000 per month on my own credit cards for work travel,” wrote Jessica, a New York City resident who asked to have her last name withheld because she’s still at the same company. “I was always reimbursed eventually, but sometimes it took weeks, so my credit card would be maxed out and I would have to use my own checking account for additional business expenses.”
A number of people on social media and The Washington Post comment boards pointed out that they enjoy the cash returns, points or frequent flier miles they earn from temporarily carrying large employer expenses on their personal credit cards. Others said being able to charge and then quickly pay off balances helped them build or improve their credit.
But to take advantage of those benefits, you have to be in a position of relative financial security, which means having: (1) a stable employer that provides timely reimbursement, (2) a high enough credit limit to accommodate a big balance, (3) cash to pay the balance if reimbursement is delayed and (4) the abililty to cover your personal expenses in the meantime.
Readers without those resources described having to eat the cost of interest charges or late fees when reimbursement came late — or getting stuck with the entire balance when reimbursement never came. And, adding insult to insolvency, those without adequate borrowing power to cover work expenses can find themselves in humiliating situations, or missing out on career opportunities.
“During the first few years of working after college … I was kicked out of a hotel because they bounced my credit card. ... I had to pay cash and beg my manager for a cash loan,” commenter frankdunn1 posted on the Post comment boards.
“My first year in a government job I cried when I was told I had to put the cost of a conference on my credit card [and] wait to be reimbursed,” a Washingtonpost.com user with the handle Ann Jay recalled. "I couldn’t attend the conference because I only had one credit card at the time and was still carrying a balance from when I [moved] to a new state. ... I won’t ever forget my coworkers getting to go to a work conference because they could afford to and I couldn’t.”
Another concern with “pay now, get reimbursed later” practices is that they can be exploited by scammers posing as legitimate businesses. An Atlanta tech industry worker, Lynn M., found that out the hard way. "I was recently scammed by a [fake employer that made a job offer contingent on completing training, and then during the purported training asked me to pay for software] on my personal card and then the “business” would "reimburse’ me.” The worker has reported the scam to authorities, but adds, “I’ve been beating myself up and asking myself why I was okay with doing this.”
I’ll tell you why: When we’re told practices like this are “just how business works,” we’re less likely to question them until it’s too late. Those who can’t afford to simply walk away from a potential paycheck, however dodgy the circumstances, are the most vulnerable.
Bottom line: Even if it’s legal, having employees carry business expenses beyond their means promotes economic and employment inequality. Employees’ access to job opportunities and employer resources should not be limited by their personal cash flow or credit scores. Whether through corporate cards, cash advances, master billing for travel, or other solutions, employers should do what they can to avoid burdening employees with job-related expenses. “You gotta spend money to make money” was never meant to apply to those earning an honest wage.
Incidentally, the reader whose letter sparked this discussion has an update. Following a “glowing” performance review from his boss, he spoke up about the expensing issue.
“It was a bit uncomfortable but I was able to make clear that I respect our relationship, that this financial dynamic is damaging to me, and that I will be doing what is right for me and my family in how I achieve the goals of my work. …[My boss] pushed back pretty hard on trying to preserve the expense-first policy as a way to keep things simple for him, but as the intermediary between my boss and our employees for expense matters, I will be doing my best to advocate for the employees and make sure they only make expensable purchases that they individually feel financially comfortable with.”