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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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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.


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