‘You’re being laid off … and you owe us money’

March 11, 2009 by
Filed under: In this week's e-newsletter, IT staffing, Latest News & Views, Payroll software 

When faced with the unenviable task of laying off staff, it’s important for companies to do everything right. An unfortunate accounting error during a staff reduction recently caused a big embarrassment for one well-known company.

Microsoft recently made headlines after it laid off 1,400 workers. And then the news got even worse.

The software giant discovered that an “inadvertent administrative error” resulted in some former staffers being paid more severance than the company planned.

So what did the company do? It sent a letter to all those affected and asked them to pay the money back.

The costs of the error weren’t exactly insignificant — Microsoft’s HR chief Lisa Brummel estimated 25 former employees each received an average of $4,000 – $5,000 in extra cash.

But several critics jumped on the company for being insensitive and making a big PR mistake. And the company listened — last week, Brummel apologized and announced the former employees would now get to keep the oversize checks.

What do you think about this story? Should Microsoft be repaid the money? Or would it have been best to let it go and not draw any attention to the mistake?

Let us know your opinion in the comments section below.

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Comments

9 Comments on ‘You’re being laid off … and you owe us money’

  1. FMLA law Family Medical Leave Act update, Latest cases on FMLA Law : FMLA Law News Update March 12 on Thu, 12th Mar 2009 8:21 am

    2. [...] ‘You’re being laid off … and you owe us money’ | HRTechNews.com … By Sam Narisi Some doctors charge steep fees for FMLA forms By Lydell… DT: What amazes me is that managers have the time, and desire, to check up on their employee by going on Facebook or MySpace… oregondiver: Whenever I hear of an employee … HRTechNews.com – http://www.hrtechnews.com/ [...]

  2. Joan L. Peterson on Tue, 17th Mar 2009 10:52 am

    3. The company made the mistake not the employee. It is the companies responsibility to absorb the error without bringing embarassing attention to themselves and perhaps look at the incompetent pesonnel they still have working for the company. Surley there was more than one person that verified the amount being paid out.

  3. HB on Tue, 17th Mar 2009 10:59 am

    4. Perchance someone in that operation may not be getting their bonus this year. Then again, the error was humane, a helping hand to a gentleman or a lady out of a job. Compare with the diabolical derivatraders that nearly destroyed our economy, (nearly, I guess the jury is still out on that one), and the millions they are getting, and I think a lot of those folks still have their jobs.

  4. Louie on Wed, 18th Mar 2009 3:12 pm

    5. I am surprised at the commotion raised and the comments made in regards to a company trying to retrieve a significant amount of dollars paid out in error. Issuing a large number of severance checks like that with differing pay scales, work centers, and other potential contractual obligations could easily create some interesting compensation scenarios. Since the company is large –i.e. Microsoft they should eat it? Why? What would the government do if it issued 2000 taxpayers excessive refunds for $4000-$5000–that’s only 10 million a paltry some but would they say forget it? I think they have every right to ask for it back, the same way an employee has the right to ask if they are shorted on a weeks pay or a commission check. Mistakes do happen and it’s not to say this was not a serious error. I know that in my letter to them I would have spoken to their conscience about doing the right thing, which in this case would have been returning the money. And one last thought on this, references. Although they should be strictly factual and I bet MS will do that the chances of these employees ever getting back appear slim at best and when reference checkers dig deep other people often speak on condition of anonymity.

  5. Darrell on Tue, 7th Apr 2009 10:23 am

    6. Once upon a time I was hired by a well known computer hardware company. They offered me a sign on bonus. I negotiated double that bonus. I received two checks. One for the original amount, and one for the double amount. I took the original amount check to the Personnel guy that I negotiated with and he said – “Our mistake – we wrote it and signed it so it’s yours – cash it.” In other words, that company took responsibility for its mistake and didn’t force me to take responsibility for their mistake. Huh.

  6. Louie on Tue, 7th Apr 2009 12:00 pm

    7. Actually, I changed my mind, especially since I was wrong about the 2000 employees.

  7. Cristel on Tue, 7th Apr 2009 12:35 pm

    8. This type of mistake may not hurt Microsoft but it could financially ruin another. The bigger picture here is that the employees (I assume) knew what they were supposed to get. When they received more than that, they should have said something. I do payroll and people will be in your office the first second they are shorted a few cents but never when you over pay them. I think we need to work on our morals.

  8. SG on Tue, 7th Apr 2009 2:15 pm

    9. It really depends on the terms of the layoffs and severance agreements. Were the employees offered the severance package as an incentative to agree a “voluntary” layoff? If so, Microsoft cannot reneg on its offer after the layoff, can they? If the dollar amount of the “mistake” was disclosed to the employee in writing (and I would think even a verbal agreement) and then later the same amount paid, then the employee should not have to repay anything. However, if the severance agreement was for a fixed amount and the employee later received a higher amount, then the employee knowingly kept money it knew it was not entitled to and Microsoft is not wrong in asking for it back. Except maybe from a PR perspective – it will cost them much more than $125,000 to try to regain a positive reputation, won’t it?

  9. marc on Tue, 7th Apr 2009 2:38 pm

    10. It was a misteke…give the money back. God forbid an employee was shorted on a paycheck because that employee will have everyone and his brother on your back until you get it straight. But hey, employers don’t run companies anymore…the employees are in charge and they want to take everything from the owners. yes, I am a little bitter.