Microsoft Severance Pay Blunder Costs Mostly Unemployed Ex-Employees

[1Kurgan1]

It's really a moral issue more than anything, like if the cashier hands you a $100 instead of a $10, do you go back and give them $90 back.

The biggest reason that makes me think microsoft f'ed up, and the people can keep the cash is because I work in a garage. If you change the oil without customer consent, is he expected to pay for it anyways? But most certainly if the customer was entitled to an oil change and you didn't do it, but charged them, then they come back and you'd be changing the oil (and probably doing a little extra for them).

It's just a huge moral issue that no one can ever agree on, and microsoft was probably better off damage-control wise to let them keep the money than risk a battle of morals.

It's different than a cashier giving you money. When you go to a store and buy some cheeto's and it says $3.99 (you know there is tax) and you give them a $10 and get back a $10 that something is up. Now maybe you didn't realize they hand you a $10, but either way you got all the numbers right there.

When they say, "sorry you're going to be laid off, here's a severance package". They do not hand you a receipt with numbers on it showing why you are getting what you got. So now here your the guy thinking, "this blows I have to find a job in a declining job market." This sounds easy, anyone can find a job, even if it is McD's, but odds are having a nice job like that you got some expenses, a nice house, nice car or two, some kids. And a McD's job just isn't going to keep you from going bankrupt.

Now either way they were sitting here thinking, sweet I got this large sum of money! That doesn't matter when you know the whole job market is crap. They are most likely thinking how long this will get them buy till they find a decent job. Setting up plans and such, then MS comes along and says, sorry guys we need some of that back.

You go hand a homeless man $20 then go and tell him you want $5 back and see how that goes.

 

[imperialreign]

So in the end it effected a whole 25 people, and the amount was between $4000 and $5000, that has to be one huge severance package for a mistake to be that large in sum.

The mistake also meant that about 20 people were under-paid. I guess buy your guy's views, Microsoft should get to keep that money, right? I mean, people can't have their cake and eat it too. If Microsoft has to stick by the error that they made, then it doesn't matter if it is in favor of Microsoft or not.

20 people were underpaid? Based on what, that 25 people were overpaid?

It doesn't always work like that. Besides, if an employee did turn out to be underpaid, MS would be under legal obligation to pay them their full share in full - as per whatever agreement the employees had signed during their stay, or signed onto when hired.

As to a company being able to reclaim any overpayments, it's largely based upon the state in which the company resides. For most states, though, the company is entitled to - when it comes to actual payroll earnings . . . severance packages can be viewed entirelly different as they are not typically something that's part of the employees "wages and benefits." It's a buy out, the company is making the employees and offer if they were to go ahead and resign . . . instead of the forthcoming inevitable pink slip with no pay.

Some states can and do view such severance packages as part of an employee's earnings and income, but not contractual. In which case, any overpay on part of the company, and it could end up being declared a "business loss" should it ever go to court, and the company is still out of their money. Again, it entirelly depends on state law.

Either way, MS screwed up. They took the right action by sending the former employees a letter notifying them of the mistake, and asking for repayment (notice in the letter, MS hasn't demanded the amount to be returned, simply requested). It's in the employees hands, they can more than likely work something out with MS - either payment in full, monthly amounts, or even negotiate the amount owed . . . failure of the employee to respond at all, and it could possibly end up in court.

Plain and simple - both sides are wrong, and both sides are right.

 

[Conti027]

This can go anyway you want to take it. There is bad and there is worse. Things happen.
If I was the guy getting the extra money I wouldn't want to give it back.
But if I was the owner in the company I would want it back. its greed
but most likely if I was the owner or whatever and was as big a MS I would just let them keep it.
But I'm not going to turn around and say MS is wrong tho.

 

[laszlo]

they calculate the payments with own software which has a "fatal error" somewhere...

 

[newtekie1]

20 people were underpaid? Based on what, that 25 people were overpaid?

It doesn't always work like that. Besides, if an employee did turn out to be underpaid, MS would be under legal obligation to pay them their full share in full - as per whatever agreement the employees had signed during their stay, or signed onto when hired.

Base on this, which linkin posted a few posts before mine. Try reading next time.

If there is no legal obligation for the employee to have to return any overpayments, then there is no legal obligation for Microsoft to return the underpayments either. And even still, most here don't care about the legal aspect. What I was talking about were the people say "Microsoft screwed up, now they have to live with it". Well yeah, they did, so I guess those 20 employees that got underpaid are screwed by most people here's logic.

 

[DrPepper]

they calculate the payments with own software which has a "fatal error" somewhere...

They might use linux.

 

[FordGT90Concept]

Base on this, which linkin posted a few posts before mine. Try reading next time.

If there is no legal obligation for the employee to have to return any overpayments, then there is no legal obligation for Microsoft to return the underpayments either. And even still, most here don't care about the legal aspect. What I was talking about were the people say "Microsoft screwed up, now they have to live with it". Well yeah, they did, so I guess those 20 employees that got underpaid are screwed by most people here's logic.

The people at the receiving end of the money can't be held accountable in any way, shape, or form, for a mistake made by someone currently under the employ of Microsoft. Microsoft would have to prove that those people that received extra money were tied to some criminal plot in order to require it be returned. Basically, so long as it was an accounting accident and not criminal, the people who screwed it up in the first place will be taking the fall, not the people who received it.

Microsoft admitted it was accidental and not criminal so, if Microsoft were to take it to court now, they wouldn't stand a chance unless they have substantial evidence that proves it was criminal.

 

[newtekie1]

The people at the receiving end of the money can't be held accountable in any way, shape, or form, for a mistake made by someone currently under the employ of Microsoft. Microsoft would have to prove that those people that received extra money were tied to some criminal plot in order to require it be returned. Basically, so long as it was an accounting accident and not criminal, the people who screwed it up in the first place will be taking the fall, not the people who received it.

Microsoft admitted it was accidental and not criminal so, if Microsoft were to take it to court now, they wouldn't stand a chance unless they have substantial evidence that proves it was criminal.

It doesn't have to be criminal for Microsoft to legally get the money back. Payroll overpayments(and underpayments) happen daily, and the company has every legal right to get the money back, nothing criminal about it.

 

[FordGT90Concept]

Checks are legally binding contracts from the moment it is signed by the author. The only way Microsoft could undo what it already authorized is to tell the bank to stop payment (or voided before they are released) before they are deposited. Once the checks are deposited, Microsoft can only sue or appeal to those employee's good nature. If they were still employees, they could have threatened to fire if the money is not returned (could go either way in that case). There is no legal statute, anywhere, that says employees who were over paid as the result of an accounting error need to return the excess funds. Microsoft has no one to blame but themselves.

If it were criminal, (someone was funnelling excess funds away to eventually have those people pay it back, for instance) the law would be on Microsoft's side.

 

[newtekie1]

Checks are legally binding contracts from the moment it is signed by the author. The only way Microsoft could undo what it already authorized is to tell the bank to stop payment (or voided before they are released) before they are deposited. Once the checks are deposited, Microsoft can only sue or appeal to those employee's good nature. If they were still employees, they could have threatened to fire if the money is not returned (could go either way in that case). There is no legal statute, anywhere, that says employees who were over paid as the result of an accounting error need to return the excess funds. Microsoft has no one to blame but themselves.

If it were criminal, (someone was funnelling excess funds away to eventually have those people pay it back, for instance) the law would be on Microsoft's side.

You have a very wrong concept of how things work. I suggest you educate yourself.

Just because one entity writes a check and gives it to another entity, that doesn't mean the first entity can't legally get the money back if the check was an error. Checks are not legally binding contracts, they are only representations of money used to transfer money from one entity to another. There are exceptions to this. A check can be used as legally binding if "Final Payment" or "Payment in Full" etc. is writen in the memo line. If the party cashes the check with such phrases writen on them, then it is considered that the party cashing the check is in agreement with it. Again, this is something that varies greatly from state to state though.

There are plenty of legal statutes stating that an overpayment may be collected by the employer, of course they vary from state to state. Indiana Code 22-2-6-4 covers the what rules the employer has to follow to deduct the money from the employee's pay. Clearly giving legal statute that overpayments can be collected by the employer. I'm sure other states have similar laws governing this. In any event, the employee must return any overpayment, regardless of state, as long as the overpayment was caught and the employee was notified in a timely manner(again what constitutes a timely manner varies from state to state, but in this situation they were notified in under 10 days, which would be considered a timely manner in any state). Yes, the employee can try to fight it, but in the end the company is entitled to sue the person, and the company would win in any US court.

 

[phanbuey]

Think of it like this... how much money does MS spend on PR to look good in the eyes of the consumer? More than $125,000, i would imagine.

And how quickly they look like a bunch of cheap idiots in one move, for $125,000? Lol big time fail.

 

[Ahhzz]

http://forums.techpowerup.com/showthread.php?t=86109


repost

 

[imperialreign]

Base on this, which linkin posted a few posts before mine. Try reading next time.

rather blunt statement from you right there. The link that Linkin had posted I had figured lead to the update in the OP as it had been thanked by btarunr, and I don't always double-check most links out of the repetivie nature they generally turn out to be.

Try being a little less uncouth in how you present your statements. It's something that seems to come up occasionally based upon how you respond to others.

If there is no legal obligation for the employee to have to return any overpayments, then there is no legal obligation for Microsoft to return the underpayments either. And even still, most here don't care about the legal aspect. What I was talking about were the people say "Microsoft screwed up, now they have to live with it". Well yeah, they did, so I guess those 20 employees that got underpaid are screwed by most people here's logic.

I didn't say there wouldn't be any legal obligation for the ex-employees to return the funds . . . or didn't you read [/i]my[/i] post? It entirelly depends upon the state legistalture . . . and last I checked, I know absolutely squat about WA state law.

Otherwise, the money that MS owes to the ex-employees that were underpaid - MS would be under federal mandated law to pay them the amount that is owed.

Although most here don't seem to care about any legal aspect, that's aside the point as there is definitely a legal aspect involved.

We're beyond any moral obligations here, though. If the ex-employees that were over payed don't want to pay MS, that's their deal. MS has already taken the proper course of action by informing the former employees of the mistake, and requesting the payment to be returned, and that the former employees can contact MS to work things out. If the former employees don't return the money, and MS decides to take them to court for it - MS is already on better ground than they would be.

If a former employee doesn't feel they're entitled to repaying the full amount, they're more than willing to contact MS and negotiate the situation as well.

 

[FordGT90Concept]

Indiana Code 22-2-6-4 covers the what rules the employer has to follow to deduct the money from the employee's pay.

Sure, they could deduct it from the next pay check but there is no "next paycheck" for the employees they fired. As I stated before, the only way Microsoft could get the money is to beg for it or sue the employees that received too much. If the checks weren't deposited yet, they could stop payment and issue correct checks. Once the check has been deposited, the ball is in the judicial court system.

 

[phanbuey]

Sure, they could deduct it from the next pay check but there is no "next paycheck" for the employees they fired. As I stated before, the only way Microsoft could get the money is to beg for it or sue the employees that received too much. If the checks weren't deposited yet, they could stop payment and issue correct checks. Once the check has been deposited, the ball is in the judicial court system.

it depends on where the error was made... if it was a payroll error, then the employees HAVE to give it back. i.e. bank of america - ee's signed severance agreements which paid them for 4 weeks, there was a payroll error and they got an extra week... later on when BOA did an audit and figured it out, the EE's had to give back the money even after they were not employed - since they signed an agreement specifying how much they should have recieved.

If its an HR error, then its a different story.

 

[FordGT90Concept]

True, because the contract specifically states an amount and that amount was exceeded.