Question about over paid severance

[EtOH]

Ok. I have been with this company for 5+ years. I got laid off in January.

Severance letter said I would be paid for xx amount of weeks plus vacation time. One of my statements the week prior to getting laid off said I had 200 hrs, the paystup post layoff said 40 hrs vacation.

I asked and got no definative answer on which was right or why the change of hours.

Get paid severance/vacation etc.

4-5 months later I get a letter from the company saying the double paid my severance and they want half back.

I haven't gotten around to responding yet and I get another letter saying "We got that money back from the IRS so you now only owe us $xxxx. Please send a check".

If I am reading that right they got the IRS to give them money that was paid to the IRS in taxes, which I am now responsible for.

Is any of this legal?

The way they handled my lay off was shoddy to say the least, it was easy to tell my boss threw me on the list at the last minute and the paper work wasn't right (political reasons, long story).

Anyway does anyone have any suggestions here?

Is it my fault they didn't tell me what my exact severance was and then double paid it? Can they ask for it back? Is it legal to "recover" that money from the IRS and let the IRS handle it?

EtOH

 

[BoomerD]

AFAIK, they notify the IRS that they made an overpayment error and can deduct the amount of tax they overpaid...and yes, if you keep it, you are now liable for the taxes on the full amount of severance.

If the overpayment is a large enough amount, they can certainly sue you for the overpayment and/or turn you over to a collection agency...which won't look good on your credit report...PLUS, if future employers run your credit, they'll see this as well. Doesn't show the best of ethics...

 

[kranky]

You have a couple separate issues IMHO.

1. Were you entitled to 200 hours of vacation pay, or 40?
2. Did you sign anything that said you would receive $X? If so, did you receive more than $X?

The tax thing probably means they originally withheld taxes on the severance, and wanted ALL of it back including the taxes. But then they recovered the taxes from the IRS and you now aren't being asked to return the amount they recovered. But in any event, your severance is income and is taxable.

See this link.

 

[EtOH]

I could write them a check for the full amount. What gets me is that NO where did they ever give me a $ amount of my severance. How the hell was I supposed to know it was double paid?

Hell I didn't even know until they sent a letter about it, I never got an straight answer on how much my severance was.


EtOH

 

[EtOH]

Originally posted by: kranky
You have a couple separate issues IMHO.

1. Were you entitled to 200 hours of vacation pay, or 40?
2. Did you sign anything that said you would receive $X? If so, did you receive more than $X?

The tax thing probably means they originally withheld taxes on the severance, and wanted ALL of it back including the taxes. But then they recovered the taxes from the IRS and you now aren't being asked to return the amount they recovered. But in any event, your severance is income and is taxable.

See this link.

I specifically asked which vacation hrs number was correct, they wouldn't answer. So I have no idea. In my mind the 200 hours is correct, but obviously not in theirs.

Nothing in my severance package had a $ amount on it, it was very vague.

As for Boomer's comment on Ethics, that isn't an issue. Based on the way my severance was handled it was obvious my new boss shoved me out to make room for his buddies.

1) My name wasn't even on the severance package to start with
2) They direct deposited my severance/paycheck instead of mailing it like they said they would which tells me they rammed my lay off through and hadn't taken me off the payroll yet.
3) The admin in our group who put the packages together was shocked I was let go because my name wasn't on the original list of packets she put together.

Ethics aren't even in the equations in my opinion based on the crap the boss pulled.

EtOH

 

[BoomerD]

Originally posted by: EtOH

Originally posted by: kranky
You have a couple separate issues IMHO.

1. Were you entitled to 200 hours of vacation pay, or 40?
2. Did you sign anything that said you would receive $X? If so, did you receive more than $X?

The tax thing probably means they originally withheld taxes on the severance, and wanted ALL of it back including the taxes. But then they recovered the taxes from the IRS and you now aren't being asked to return the amount they recovered. But in any event, your severance is income and is taxable.

See this link.

I specifically asked which vacation hrs number was correct, they wouldn't answer. So I have no idea. In my mind the 200 hours is correct, but obviously not in theirs.

Nothing in my severance package had a $ amount on it, it was very vague.

As for Boomer's comment on Ethics, that isn't an issue. Based on the way my severance was handled it was obvious my new boss shoved me out to make room for his buddies.

1) My name wasn't even on the severance package to start with
2) They direct deposited my severance/paycheck instead of mailing it like they said they would
3) The admin in our group who put the packages together was shocked I was let go because my name wasn't on the original list of packets she put together.

Ethics aren't even in the equations in my opinion based on the crap the boss pulled.

EtOH

YOU may not see this as a question of ethics, but if it gets into your credit report, potential employers probably will.
The company has notified you of an overpayment in your severance package and wants it repaid. If you don't do this, regardless of how your termination was handled, how the severance payment was made, or the lack of documentation, it will still reflect on your character.
While I certainly understand the desire to say "FUCK YOU. You paid me what YOU thought I should get...I'm keeping it all!", but, the reality of it is that the company now says they overpaid you...unless you can prove that they didn't...that you were entitled to every dime, you have an ethical obligation to repay them. (and more than likely, a legal obligation as well.)

 

[EtOH]

I may very well have an obligation to do it. One of my issues is that I was never given answers as to how much my severance was.

Up until the two letters saying it was overpaid I didn't have a clue, I thought that money was the vacation hours, not being over paid.

Then I get a letter saying basically "hey sorry we laid you off but we paid you too much money, send it back in the envelope enclosed". Funny side note there was NO envelope enclosed

It takes someone who has been laid off a while to scrape that money back together. Then 2 weeks later I get another letter saying "hey we just pulled that money back from the IRS, so you owe them now" without even giving me time to get it all worked out.

I even have the money and was going to write them a check, now I am pissed about the whole thing.

How the hell can I prove them didn't over pay me when they wouldn't even tell me how much they were going to pay me.

 

[JS80]

Originally posted by: EtOH
I could write them a check for the full amount. What gets me is that NO where did they ever give me a $ amount of my severance. How the hell was I supposed to know it was double paid?

Hell I didn't even know until they sent a letter about it, I never got an straight answer on how much my severance was.


EtOH

You didn't sign a waiver when they handed you the severance check?

 

[EtOH]

I signed it but that was prior to my vacation hours getting mysteriously changed. At that time with a horrid economy and not many jobs it came down to get something or get nothing. I chose something. Now that something has changed from what I can tell.

When the original letter came in I was out of town and didn't get it until over a week later. I got the money together and was ready to mail it when I got this new letter saying that I only owed 10% of what I did before to the company and 90% to the IRS.

Here is the general math

Severance = $9000 ($6000 to me, $3000 to IRS)
Severance overpay = $9000 ($6000 to me, $3000 to IRS)

Letter 1 says they recovered the $3000 from the IRS and please mail them $6000.

Letter 2 says they got the IRS to give them $5000 (which I now owe the IRS) and I owe them another $1000.

Some of this I have only figured out after I had run out of time and had to sign the letter. In a normal economy I might have been pickier but in this one I took what was offered and got the hell out. Now they want some back.

 

[JS80]

Originally posted by: EtOH
I signed it but that was prior to my vacation hours getting mysteriously changed. At that time with a horrid economy and not many jobs it came down to get something or get nothing. I chose something. Now that something has changed from what I can tell.

When the original letter came in I was out of town and didn't get it until over a week later. I got the money together and was ready to mail it when I got this new letter saying that I only owed 10% of what I did before to the company and 90% to the IRS.

Here is the general math

Severance = $9000 ($6000 to me, $3000 to IRS)
Severance overpay = $9000 ($6000 to me, $3000 to IRS)

Letter 1 says they recovered the $3000 from the IRS and please mail them $6000.

Letter 2 says they got the IRS to give them $5000 (which I now owe the IRS) and I owe them another $1000.

Some of this I have only figured out after I had run out of time and had to sign the letter. In a normal economy I might have been pickier but in this one I took what was offered and got the hell out. Now they want some back.

Do not send check until everything is written and clear (defined severance amount + your PTO balance).

 

[morrisbj]

I think they need to show you and explain all the math behind what they did pay you, and what they think they should have paid you. If they can't show you numbers, they have no proof that you owe anything back.

 

[BoomerD]

Originally posted by: JS80

Do not send check until everything is written and clear (defined severance amount + your PTO balance).

Agreed. Request a formal audit of your PTO and defined severance pay. Do NOT send a check until you receive this. Undoubtedly you have pay stubs to verify how much vacation you ACTUALLY had in your vacation bank. I always knew almost to the hour how much vacation I had accrued.

 

[EtOH]

Originally posted by: BoomerD

Originally posted by: JS80

Do not send check until everything is written and clear (defined severance amount + your PTO balance).

Agreed. Request a formal audit of your PTO and defined severance pay. Do NOT send a check until you receive this. Undoubtedly you have pay stubs to verify how much vacation you ACTUALLY had in your vacation bank. I always knew almost to the hour how much vacation I had accrued.

Yep. I have my paystubs prior to and post "Work Force Adjustment"

 

[EtOH]

Also to be clear I DO have the money to return and do NOT have an issue returning it if indeed I am obligated to.

To be quite frank they did me a favor. I was miserable under my new boss anyway. To give you an idea how bad it had gotten I got laid off right after the holidays, during a bad recession/depression/jobmarket/etc, and my stress level went DOWN.

EtOH

 

[JulesMaximus]

Dude, time to lawyer up. I'd also go to the EDD or whatever state department you have that regulates employment and see if any of the things they've done is even legal. Especially the paid time off benefits you were paid out.

Sounds like they are trying to fuck you. Fuck them back...hard.

 

[MadAmos]

This.

Originally posted by: JulesMaximus
Dude, time to lawyer up. I'd also go to the EDD or whatever state department you have that regulates employment and see if any of the things they've done is even legal. Especially the paid time off benefits you were paid out.

Sounds like they are trying to fuck you. Fuck them back...hard.

 

[BoomerD]

From a quick browsing of the Jaw-Ja DOL site, it appears that Jaw-Ja follows the US DOL FLSA laws and does not have their own laws governing provisions such as vacation pay. Therefore, :

"How are vacation pay, sick pay and holiday pay computed and when are they due?

The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or holidays (federal or otherwise). These benefits are a matter of agreement between an employer and an employee (or the employee's representative). "


The company does not have to pay you for unused vacation pay, sick leave, etc., unless you have a contract specifying such payment...

Kahleeforneeya DOES have a law that says that if a company gives paid vacation, they must pay the employee any unused time at termination.