Epic Fail: Microsoft asks for overpaid severance payments back

In a failure that would make a blue screen of death or Vista launch proud, Microsoft is asking former employees for severance payments back due to overpayment.

A letter sent to some of the 1,400 employees laid off by Microsoft details “An inadvertent administrative error” resulting in overpayments. The company asks for the overpayment to be paid back in 14 days, or else (via Kotaku):

“We ask that you repay the overpayment and sincerely apologize for any inconvenience to you,” says the letter, which spells out what happens if you pay back the dough in or out of the same tax year in which it was received. Reading between the lines, they threaten recipients with a big tax hit if they don’t give it back.

While Microsoft may well be legally entitled to demand the money back, 14 days is more than a little rough, and could actually financially disadvantage those affected by more than the amount asked for. For example, severance payments could have been used in full to pre-pay mortgages, or put on term; drawing down against that money could result in lost interest (with a broken term deposit) or bank penalty (withdrawing against a mortgage). And that’s presuming that they can access the funds; if some former employees can’t get to those funds, and don’t have another way of paying them back, they may need to borrow money to make the payment. Ultimately the employees have done nothing wrong, and yet they could now be punished due to an error from one of the biggest companies in America.

And that’s not counting the cost of the negative PR the move is already having for Microsoft. Epic fail.