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A redacted image of the letter Microsoft sent out.  (Source: TechCrunch)
Accounting error sees HR scrambling to get some of its money back

What’s something worse than being pink slipped? If you’re a former Microsoft employee, it could be having some of your severance pay taken back.

According to TechCrunch, someone at Microsoft made an accounting error when calculating laid-off employees’ severance pay, resulting in some checks being mailed out that were a little too generous. Now, Microsoft wants that money back.

“An inadvertent administrative error occurred that resulted in an overpayment in severance pay by Microsoft,” reads a letter the company mailed out. “We ask that you repay the overpayment and sincerely apologize for any inconvenience to you.”

TechCrunch reports a Microsoft spokesperson confirmed the letters but refused to give specific details, calling it an internal, private matter between the company and the employees it let go.

The spokesperson did confirm, however, that the error worked both ways: while some employees were overcompensated, others received less than what they were entitled to.

A photograph of one of these letters, provided anonymously, shows little more than a request for the money back and some important tax information, with some rather curious advice on how repayment “in a later calendar year” would affect the receiver’s taxes.

CNET suggests the letter contained a “veiled threat” of monetary punishment, but given the aforementioned tax suggestion it is hard to see how the letter, in and of itself, sports teeth. There is no mentioned deadline.

On a rather humorous side note, a poll accompanying the TechCrunch article suggests that almost 75% of the 8,000 total voters would ignore the letter and keep the cash – and only 13% would immediately give the money back.

UPDATE 23-Feb-2009: Microsoft reversed its stance and is now letting the overpaid employees keep the extra money.



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Legal?
By tastyratz on 2/23/2009 8:27:01 AM , Rating: 2
Is something like this legal?
Microsoft has sent this to them as wages earned, but if there is extra can they even legally seek that money returned or just ask politely?

I see it like when you receive an unsolicited item in the mail your not obligated to pay for it... so would this be unsolicited extra funds your not required to return? You didn't initiate them...




RE: Legal?
By MadMan007 on 2/23/2009 9:12:39 AM , Rating: 2
It may depend upon the terms of employment, what agreements were signed and so on. But maybe they're merely 'asking' because they don't really have any leverage.


RE: Legal?
By mcnabney on 2/23/2009 10:43:16 AM , Rating: 5
They likely signed for their severance package during their exit interview. If that is the figure that was signed for MS is SOL.


RE: Legal?
By mondo1234 on 2/23/2009 12:45:54 PM , Rating: 4
I understand blacking out the personal info, but why blackout the amounts?


RE: Legal?
By mindless1 on 2/23/2009 5:08:49 PM , Rating: 2
Because it could also help to identify someone.


RE: Legal?
By JKflipflop98 on 3/5/2009 8:53:08 PM , Rating: 2
The amount was probably $0.24.


RE: Legal?
By 67STANG on 2/23/2009 6:49:40 PM , Rating: 2
All of this thread is for not. Microsoft has announced that the employees can keep the extra money.

Good for you Microsoft. (we all know what Apple would have done...)


RE: Legal?
By ggordonliddy on 2/23/2009 8:28:33 PM , Rating: 3
> All of this thread is for not.

Do you mean "for naught"? (Do any kids actually read books anymore? Reading is how you learn to spell basic words like that.)


RE: Legal?
By 67STANG on 2/24/09, Rating: -1
RE: Legal?
By meepstone on 2/25/2009 3:29:51 PM , Rating: 2
when i first read your mistake i thought it was knot, not naught.


RE: Legal?
By mondo1234 on 2/23/2009 10:44:53 PM , Rating: 2
MS was quoted as saying:

quote:
"We should have handled this situation in a more thoughtful manner."


RE: Legal?
By PhoetuS on 2/23/2009 9:42:21 AM , Rating: 2
I don't think that its illegal for them to ask for the money back...

But MS probably doesn't have any legal standing for getting the money back. Otherwise I would expect the letter to be a bit more stern.


RE: Legal?
By Lifted on 2/23/2009 11:49:32 AM , Rating: 5
Yes, they do. Errors made by HR/Payroll Department cannot be kept by employees.

I'm really wondering if anyone who responded here ever had a job as this has happened at different jobs of mine throughout the years. The money money was always taken back (from direct deposit) within hours or days of the error.


RE: Legal?
By Kougar on 2/23/2009 9:54:55 AM , Rating: 5
Think of it like a banking error. You deposited a check or some cash, and the attendant added an extra digit to the total when inputing it into the machine. Or, you cashed a check and received both the money back AND your account was credited with a deposit anyway.

Just because they made the error doesn't give you the legal right to keep the money. If you spent the "free" money you could find yourself owing it to the bank anyway if they catch the mistake.

To be able to keep the money from a banking error and be in the clear the person would need the issue to not be detected until after the statute of limitations has expired (which varies depending on the state in question).


RE: Legal?
By mcnabney on 2/23/2009 10:45:45 AM , Rating: 2
When you term someone you have to pay them right then. Those checks were likely handed directly to the employee by the HR persona and the value was discussed during the exit interview. That means any error in that value is not an error anymore and is documented formally as the severance value.


RE: Legal?
By mikeblas on 2/23/2009 11:10:14 AM , Rating: 2
No, you don't. And no, they weren't.


RE: Legal?
By emoser96 on 2/23/2009 11:23:39 PM , Rating: 2
But.... Monopoly says you get to keep the money. It must be true... Micropoly FTW!


RE: Legal?
By FITCamaro on 2/23/2009 11:03:39 AM , Rating: 2
If $300,000 gets deposited in your bank account by mistake, you have no right to the money and will be prosecuted if you try to keep it.

Microsoft has the right to go after anyone refusing to return the money as well.


RE: Legal?
By quiksilvr on 2/23/09, Rating: -1
RE: Legal?
By Lifted on 2/23/2009 11:52:02 AM , Rating: 1
Wrong.


RE: Legal?
By theapparition on 2/23/2009 1:06:26 PM , Rating: 3
Nope.

Let's get some facts out first.

1: Most employment is "at will". (<- BTW, legal definition). Employers can stop requiring your services, and you can also stop working at any time.

2: No notice of separation of employment is required. You don't have to give 2 weeks, nor does the company have to give you a notice. Some state laws contradict this in some instances, but that's the general rule.

3: Severance is completely optional. MS is being "nice" by offering it. It is not required by law. However, accepting MS's "nice" gesture also contractually obligates you to certain terms, such as relinqushing MS from liability.

When you voluntarily sign severance paperwork, exactly how much severance compensation is strictly specified. You also give up the right to hold MS accountable for your termination.
So if you signed paper work stating that they will pay you "X", and you recieved "Y", sorry, but your under a contract and they have every right to that money back.


RE: Legal?
By chizow on 2/23/2009 4:38:51 PM , Rating: 2
This is closest to being correct, however, you didn't continue the terms of severance dictating whether or not the payment was agreed upon or a clerical/accounting error.

For example:

1) MS agrees to continue paying salary for 3 or 6 months at the person's current salary, they would expect bi-weekly payments mirroring their previous bi-weekly salary. Any additional payment would be easily reclaimable by MS as its clearly a clerical error.

2) If the severance states a lump sum without giving any indication of what the payment represents, like it gives a $100k golden parachute along with continued payment of bi-weekly salary, then that $100k would be VERY hard for MS to reclaim.

I'm not in HR but do have a good bit experience in reviewing contracts, payroll and HR documents.


RE: Legal?
By theapparition on 2/24/2009 7:46:53 AM , Rating: 2
As I clearly stated, if you received more than what you were contracted for, than MS has a legal claim.

If the severance contract was in error, than too bad, that's MS's fault.


RE: Legal?
By callmeroy on 2/23/2009 1:23:02 PM , Rating: 2
You are wrong and frankly pretty stupid if you honestly believe and feel this way. First off, lest you forget all income would show up on tax records when you file your taxes. You really think you could gain 300k and not report that money that to the IRS? Secondly, while you and maybe even myself would love to think our personal views apply as in "hey bud you gave me the money too bad".....the legal system doesn't it see it that way. Microsoft (or any company making similar mistakes) has the full weigh and legal authority to recover the money , if you would to refuse to return it you'd simply go to jail and be fined....I'm pretty sure they could garnish wages from your pay too or put liens against your home if things got really messy and you were unrelenting at all to pay back the money.

Same thing with the bank -- your bank makes an error and you hide it -- fine...just don't be shocked when FBI agents are knocking on your door. (FBI could be called in for a bank situation btw since the banks are federally insured and part of the FED).


RE: Legal?
By Parhel on 2/23/2009 11:32:45 AM , Rating: 2
It's dependent on state laws, but generally they can take the money back. Usually, most employers will work with you so as not to cause you a hardship such as an overdrawn bank account.

If it was a direct deposit, the employer can take that money back directly from the employee's bank account. Or, if you are going to get future checks, they can deduct it from those checks. If those aren't options, they will ask you to send them a check. If all of that fails, they will send you to a collections agency or sue you.

However, California is unique in that if an employer overpays someone - even it's ten million dollars - all they can do is ask politely for the money back. If the employee doesn't want to give it back, they don't have to. And, they can't fire the employee for that either.


RE: Legal?
By callmeroy on 2/23/2009 1:29:28 PM , Rating: 2
Funny I worked for a CA and this was certainly not the case -- in the least.

Unless you can link to me the exact law , I'll be honest -- I call BS on this.....

BUT I'm not above admitting when I wrong, so if you do link it I'll apologize on the spot.

Unless this is a very new law (I worked for the CA company just 6 months ago)....there were plenty of payroll errors where they went after employees and got their money back....and it was no "please return it " stuff either.


RE: Legal?
By Parhel on 2/23/2009 2:38:16 PM , Rating: 2
Here you go:

http://www.dir.ca.gov/dlse/FAQ_Deductions.htm

If that's still unclear, just Google something like California Wage Overpayment.

And keep in mind that this applies to employees located in California. It doesn't matter where the company is headquartered.


RE: Legal?
By Lifted on 2/23/2009 11:29:54 PM , Rating: 2
Did you even read the link you posted? Please show me where it states anything about an employer recovering overpayment. Hint: It doesn't.

In fact:

The DLSE’s Opinion Letter on this subject was limited to the situation where the overpayment resulted from a regular payroll practice where overpayment was both predictable and expected, as opposed to situations where employers overpaid employees due to clerical, accounting, or administrative error. Accordingly, employers are cautioned to consult with legal counsel before attempting to recover wage overpayment.

Searching Google, as you suggested, returns nothing to back up your claim. As far as I can tell, you are talking out of your ass.


RE: Legal?
By Parhel on 2/24/2009 11:45:51 AM , Rating: 2
The link says, basically, that there are two and only two things an employer can withhold from an employee's check. Overpayments aren't one of them, thus they aren't mentioned.

The opinion letter posted at http://www.dir.ca.gov/dlse/opinions/1999-09-22-1.p... also states very clearly that "wage garnishment law provides the exclusive judicial procedure by which a judgement creditor, including an employer, can execute against the wages of a judgement debtor" and that "if an employer deducts any portion of an employee's paycheck because the employer previously overpaid the employee, DLSE would view the deduction as unlawful." The case the letter references on page two is without a doubt a "clerical, administrative or accounting error."

I've worked with HR and Payroll for several years, and I've seen this in practice many times. I assure you that if you overpay an employee in California, your only recourse is the courts, who will judge in favor of the employee anyways.


RE: Legal?
By Parhel on 2/24/2009 11:52:46 AM , Rating: 2
quote:
The link says, basically, that there are two and only two things an employer can withhold from an employee's check.


Just to clarify this point, only voluntary deductions and taxes can be withheld. Anything else requires a court order. In California, for better or worse, employers are treated the same as anyone else who would seek to garnish an employee's wages.


RE: Legal?
By theapparition on 2/24/2009 1:00:49 PM , Rating: 2
As you stated, in California, a company is forbid from collecting overpayments by garnishing wages from future checks.

However, as you stated, a companies only recourse is to file a civil suit to collect overpayments.

How is this any different for this situation than any other state? If I was a Washington resident and refused to pay back the overpayment, MS's only recourse would have to be through the courts.

Your original statement about Cali's law took the position that it would be impossible to collect overpayments. This is clearly wrong. Perhaps your wording was unintentional, but a company has a legal means to recover accidental overpayments to California residents.


RE: Legal?
By Parhel on 2/24/2009 1:38:38 PM , Rating: 2
In Washington, or any other state aside from California, you wouldn't necessarily have the option of refusing. The employer can recoup the wages without your permission by withholding it from future checks or even by directly withdrawing it from your bank account if you have direct deposit.

In California, MS would need your written permission to take the money back. If you refused, they would have to get a court order to take the money back and are forbidden from retaliating you in any way (i.e. termination or a bad reference.)

Furthermore, application of California law is so heavily biased in favor of the employee that unless the overpayment was shown to be in some way the employee's own fault, any California court of law is going to reject the employer's case.

So, yes. I would say that without written permission it is impossible in practice to legally collect an overpayment of wages in California.


RE: Legal?
By danrien on 2/23/2009 2:11:14 PM , Rating: 2
I don't know, but at my internship my direct deposit once got double what it was supposed to, and then it was quickly taken back. The bank took care of it, and I didn't care enough to inquire as to whether or not it was legal. However, it has happened before.


RE: Legal?
By Reclaimer77 on 2/23/2009 4:56:41 PM , Rating: 2
quote:
Is something like this legal?


Yep.

It's the same thing as banking errors. If you checked your balance tomorrow and discovered the bank screwed up and dumped 5 million into your account, uhhh yeah, you can't just decide to keep it.


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