Perhaps the person that knew how to calculate severance was one of the original 1400 laid off.

Perhaps this guarantees members of the Dynamics HR team a spot in the next 3600.

Anyway a good advertisement for MS Dynamics all around. Perhaps MS is starting early to win that coveted "shooting yourself in the foot" year end award for 2009.

Should they pay it back? Only if they are obligated to by any severance agreement they signed.

Should Microsoft have asked for it back? Depends on the amount in question. If its a couple of weeks extra severance then no. If its a couple of years worth of pay then yes. I would expect its small or Microsoft would have "leaked" the information.

Reaction to the Microsoft mistake? The people responsible for the mistake were probably just trying to cover their butts by asking for the money back. The person at the top of that decision should be fired. Ultimately why did it happen? Because Microsoft has too many C's and D's.

Honestly I don't know if there is a set cap for compensation and if there is not I find it hard for Microsoft to claim anything by legal means. After all if they paid more and it isn't against law to pay more. How can they ask for the money back when both the employee and HR signed papers?

That aside the PR fiasco can be really bad. Lets recap on the spending to promote Windows. $300,000,000.00 (300 million). Divide that by 1400 and it comes to about $214,285.00 per fired employee wasted in destroyed image for the company.

What will most Americans think when they buy Microsoft? What would anyone think? Like you mention Joe, what credibility does this leave the software with? Would you go back to work at Microsoft? Would you start working at Microsoft? What will this do to potential talents? Will this start a migration of developers, designers and capable persons to other companies? What will the impact be on the quality of products?

I don't know how much overpaid the employees were, but if it costs one tenth of the Windows campaign to clean this PR mess up, it's still about 22 grand per ex-employee. Wouldn't it have been better to let the keep the money?

Advice to anyone who has just been axed -- if you were paid by direct deposit, close that bank account immediately! Employers can withdraw money from your bank account almost as easily as they transferred it in. And don't rely on transfers to a savings account at the same bank. Banking laws now allow banks to remedy a shortage in any linked account by withdrawing funds from another account. It's called an offset, and if your employer overdraws your checking account via a withdrawal, the bank can go directly to your savings or even credit card accounts to get the money back.

Next time you see them, be sure to thank your Congress person for this fine legislation.

Joe; "That fraking Microsoft. Why doesn't Bill Gates just open up his wallet, for once?"

I hope this should be thus, but it's difficult, do you remember?

Bill Gates decides to jail poor Russian teacher for using non-genuine Windows
http://english.pravda.ru/society/stories/09-02-2007/87229-microsoft_windows-0
Quote:
Microsoft denied the request for clemency despite opinions expressed by several Russian government officials who followed suit of President Putin and spoke against the prosecution of the high school principal.

“Alexander Ponosov is a teacher who committed himself to educating children. A salary paid to the teacher for his work is rather modest. There is simply no comparison between his salary and that paid to an ordinary staff working for your company. Now Alexander Ponosov is facing several years in jail,” says the letter sent by Gorbachev and Lebedev to Bill Gates.

The authors of the letter stress the point that the school teacher bought the computers with preinstalled software. However, those who supplied the computers “are out of sight for the law enforcement agencies.” “Under the circumstances, we request you to show leniency and withdraw the claims to Alexander Ponosov. The withdrawal of claims would greatly encourage those who use the Microsoft products in Russia,” says the letter.
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What a terrible situation. How many of those former employees are behind on their mortgage or rent? This is chump change to MS.
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I suppose that money could be used to give people like Andre another free laptop ahem 'to review' their next product line.
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Go to hell MS, specifically to Steve and Bill here.

Joe; "That fraking Microsoft. Why doesn't Bill Gates just open up his wallet, for once?"

Considering that Bill Gates will go down in history as the greatest philanthropist of all time (as measured by the amount of money he has given out to philanthropy), this statement is at least unfair....

What a ridiculous debate - of course the money should be paid back... Microsoft have done nothing illegal in laying people off, but keeping an overpayment IS an illegal act.

It's worth bearing in mind that although it is OK to not like Microsoft, it is NOT OK to steal their stuff... regardless of of the antipathy you feel for the company.

Evan Gates remaining one of thr richest people in the world shows what a small percentage of his money that he does give away.

"Considering that Bill Gates will go down in history as the greatest philanthropist of all time (as measured by the amount of money he has given out to philanthropy), this statement is at least unfair...."
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If you want to read about a TRUE philathropist, google Chuck Feeney, he gave away over $3.5 Billion and just kept a couple of million. for himself, that's unselfish giving and TRUE philantropy! imo

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In the Bible it talks about the poor woman who gave her last two shillings to the church and Jesus said, that she has given much more than those who gave large sums of money because they still had so much more but she gave everything she had.

Keep the money. Tell MS to take a hike. It's their problem, and they should pay for it.

@MattR, I don't know if it can be called theft. After all both parties agreed to that payment. Can companies pay more severance pay than required by law. I'm no lawyer, but inclined to believe so. Could that extra money have been paid when the employee was dismissed as an extra to help sooth things out? I guess so. Could management then change their mind and want it back? Maybe.

Either way you look at it it's bad, real bad, for Microsoft. In one scenario, the accidental overpayment, they're incompetent. In the other, an agreed upon and later recalled extra bonus, it's plain dishonest. In a time when Microsoft is pushing business applications like Dynamics this comes down as a very large and very cold water bucket on the head of onlookers.

"Should the laid off employees payback Microsoft?"

Yes, they're not entitled to it.

"Should Microsoft even ask for the severance repayments?"

Yes, if it's substantial.

"What's your reaction to Microsoft making the mistake and then asking for the cash back?"

Unfortunate.

@I-Man: Who is Evan Gates?

Seriously,
1) Yes they should expect to have to give it back. The signed exit papers probably had a formula that showed how the payout was calculated. Since it was signed by both parties, it's valid and enforceable.

2) Yes, Microsoft should ask for it back. Imagine the outcry from shareholders (to whom Microsoft is ultimately responsible) if they didn't.

3) Embarrassing for Microsoft? Yes. PR disaster? No. Will anyone's response matter? Hardly.

Quote "Considering that Bill Gates will go down in history as the greatest philanthropist of all time (as measured by the amount of money he has given out to philanthropy), this statement is at least unfair...."
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Its of little consequence (IMO) to someone with wealth on the scale of Mr Gates to give away the amount of money that he has. That being said, if as alleged it was received by the intended recipients then good on him.
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Just dont invite him to your charity dinner if you are allergic to mosquito's
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Oh and in answer to JPHs comment above where he said:"PR disaster? No. " Id disagree. At best IMO it again shows incompetence on behalf of Microsoft, and at worst it shows them to be "hardup" and desperate for cash.

All this speculation is interesting, but what are the real facts? Is there a contract in place that defines an overpayment and specifies an action in the case of an overpayment?

If you add an extra 0 to your credit card dinner bill, you can be sure that your mistake in no way removes your obligation to honor that amount that you authorized, even if it is 10 times what you meant to pay.

And if an officer of your company makes a written offer of employment at a salary that is higher than you intended, then your company must honor that offer. You can ignore the mistake, yell at the officer who made it, fire the officer who made it, but you cannot rescind that offer with an "Oops. We made a boo-boo."

Microsoft can bully and threaten. But I suspect that unless it really has a legal case, then overpayment is its own fault. Or it may have something in writing to cover itself and is only trying to be polite about it (but not really succeeding, of course).

How many more ways is MS going to turn this layoff into a PR disaster? First they announced a layoff that’s too small and won’t really even have a material effect on the company’s bottom line, as Wall Street so clearly showed with the big drop in share price. Then instead of biting the bullet and letting everyone go at once they drag out the thing over 18 months so 90K+ employees now worry that they’ll get the ax when the next shoe drops. And now they overpaid and want their money back? Yes, MS is entitled to it back but no they should not have even considered asking for it because it has cost them way more than it could have possibly saved.

Of course they should pay it back, I'm surprised when people ask these sort of questions.

That money belongs to the share holders, including the pension funds of many people who earn a heck of a lot less than the typical MS employee.

If they don't then I'd put them in the same basket as the bank execs who failed to properly access risk, the Enron guys who cooked the books and the that Bernie guy who ran the $50b Ponzi scam.

Whoever was responsible for authorising the over payments should, at a minimum, be hauled over the coals and demoted down a rung or two and have their salary reduced accordingly. Don't fire him/her because they'd then be eligible for severance pay, hopefully they will resign in shame.

I-man, if you are fanatically anti-Gates, anti-Microsoft, it's easy to find the statistic that best serve your point. Facts don't change and Gates has made plegdes to give out most of his money in the future.

@Philosopher
I'd like to carry on with your dinner bill analogy. Yes, if I make a mistake and authorise a higher payment, that's my mistake and I'm stuck with it. But if I put down a pile of cash expecting to get some change and I don't get enough because the diner has taken more money than the bill states, then I would kick up a fuss and demand the rest of the money back.

In one case, the person authorising the payment (in this case, Microsoft) has made a mistake but legally they're stuck with it. No amount of saying, "Oops, we didn't mean it," will change matters. But in the other case, both the payer and payee agreed what should be paid (i.e. the bill) but the payee got too much money. In that case, the payer is well within their rights to ask for the overpayment back.

I don't know which case applies here but, either way, I don't think it would have been possible for Microsoft to get the money back without losing face too badly.

@Jess Meats,
The dinner bill analogy actually happened, although it happened about 35 years ago and on a business trip. The bill only specifies the minimum amount that the customer agrees to pay the restaurant; adding the tip, calculating a new total, and signing the bill constitutes agreement by the customer to pay the new total, not the old tip-less total.

In that case, the customer made a mistake and incorrectly calculated a much higher final total than he meant to. From what I remember, the amount of alcohol he consumed probably contributed to his arithmetic errors.

But the bill's final total and his signature, both added by him, constituted the legally binding agreement. The law didn't care if he was drunk or unable to add, it didn't care what he meant to say, it only cared that the restaurant's bill contained a Total section and a signature line, and that the customer put a number in that Total section and signed the bill.

Admittedly, a restaurant that really cared about its customers would have rectified the error. But I don't recall that his post-incident attitude did anything to contribute to the restaurant's charitable mood.

Likewise, whatever calculations Microsoft uses are not likely given to, let alone agreed to by, the person being fired. There may be a general rule, such as such-and-such weeks pay for some number of years of service. But those guidelines are adjusted for unused vacation time, company credit card balances, employment ratings (which, if used to adjust severance, often drop to reduce that severance even though the company never admits it), and so on.

And if Microsoft cannot get its hidden formula right, an employee with no access to the full formula can be expected to double-check it and agree to it. The fired soul can only agree to the final number, which is likely all that is contained. I may be wrong about Microsoft's exit papers, but from knowing others who are let go from various other companies, there is much dispute over the little information they are given (especially if based on ranking/ratings), and the final number is the only thing that either side has to go by in a formal dispute.

Of course, if the company shows you that they made an error, and you don't dispute that an error occurred, and you still refuse to pay back the extra, you are probably still in the right. But you also are unlikely to ever be hired back as long as the current regime remains in power.

Such are contracts.

@RightPaddock:
Re: "That money belongs to the share holders"

No, the money legally belongs to whoever Microsoft legally gave it to.

If $300 million for a stupid ad campaign and $10 million to Jerry for his completely inane discussion about showering with your clothes on doesn't belong to the stock holders, then a few measly bucks mistakenly committed to fired employees are nothing more than insignificant rounding error.

But that's irrelevant: What is relevant is what did the termination contract state, and what did Microsoft and the employee both agree to. THAT is what is relevant. Not some whining about widows and orphans who own Microsoft stock.

Re: "Whoever was responsible for authorising the over payments should,..."

Yeah, yeah, yeah, whatever. But you forget one of the most endearing attributes of a huge and cumbersome bureaucracy, and that it to effectively shield any one individual from blame.

It all starts at the top, RightPaddock. At the top. If he's not in control of the company, then the company needs a new top. But it still starts at the top.