<p>I would say it depends on the difference. Is the difference $500 or $5000+? It also depends on what your ability is to ok the difference. If it is a corporate decision you have the unfortunate function to tell the employee the situation and that is all you can do; of course with some kind of compassion. If you can approve the difference and it is the $500 it is probably best to eat the $500 and present it that you can approve it for the current year but following years will be based on what the formula comes out to be. If it is the $5000 it is different. Right or wrong the amount was grossly overstated. Although we would like for our employees to understand everything that goes on it rarely is the case so this would fall under that thought and would need to be explained; it will be their choice to agree or accept the reasoning. </p>
<p>My guess is that if it is the grossly overstated amount and the person does not agree or understand after explaining your reasoning more issues will follow … </p>
<p>Years ago I accepted a job transfer with a company which included a salary increase. The day I received my first check I didnt open it up until I walked out to my car when leaving for the day. As I was sitting in my car looking at my weekly increase of $26,000 I put my personal logic to work and told myself this was a gross mistake and proceeded to walk back into the building to talk to the HR person to say there was a mistake. </p>
<p>The difference is over 25K. It is part of the reason why it is unreasonable for this employee not to have questioned the amount. If the amount was only few thousands, I would have just authorized to pay her, but this amount is too big. I am thinking about what younghoss said in post #15.</p>
<p>I read the worksheet again. On the side of the travel amount, it had a reference to the benefit page (secondment benefit section 4.4), and it describes how the amount is calculated. The worksheet does not say “estimate.”</p>
<p>What percentage of the employee’s income is this mistake?</p>
<p>If I am a new hire, how am I supposed to know if it is a mistake, or just a generous benefit? Especially if it is only a small part of my total income; I would probably think it was a strange kind of bonus or something. And since I don’t know what everyone else gets, how am I supposed to know it is out of line? (Obviously if it was 3x the income you could reasonably judge it was wrong).</p>
<p>And that extra $25K could easily be the deciding factor in accepting the job.</p>
<p>Unless it had been explained to me verbally how the payment was supposed to be calculated, so that I might have a reason to suspect it is wrong - would it be reasonable for me to know?</p>
<p>At my level in my company, there is a bonus plan. If I got a job offer for my position saying “$2500 bonus”, I would think, meh. If the offer said “$25000 bonus” I would be pretty stoked - that would be a non-trivial boost to my income, but not an outrageous amount, either.</p>
<p>If my company came back later and said “sorry, we made a typo”, I would be p***ed.</p>
<p>We don’t really have enough detail to judge whether the employee should have known. But if you can’t come to some mutually acceptable compromise, the employee will be angry that they have been screwed, will probably leave (how much will it cost to replace this person?), and meanwhile they will be poisoning the well so to speak.</p>
<p>On the work sheet, it lists Housing, Utilities, medical coverage, travel, car, school allowance…This line item was listed as Travel, not a compensation. Cost of business class ticket from one location to another could be easily figured out via Expedia. In this case the difference is 10 times, not 10 or 20%. This is also not a new employee, we do not hire new employee as an expat.</p>
<p>On the one hand I feel bad for the misunderstanding, and she based her decision (moved her family, and her H quit his job) on this amount. At the sametime, I can´t help but feel she is taking advantage of the situation.</p>
<p>Has she done the ex-pat thing before? Would she have had the knowledge to realise this number was out of line?</p>
<p>I have a lot of ex-pat friends and hear stories about benes- private school tuiton for thier kids, boarding school in the home country for their kids (people in Saudi), university tuition, all moving costs, certain travel costs, tax advantages, etc. It sounds like a great deal.</p>
<p>If she is new than she might have simply thought, “wow, this is great, just like I always heard” If she is an old hand, then did she know it was an error and hoped to capitalise on that? Or do some companies do things that way?</p>
<p>Is she uninformed or unethical or somewhere in the middle?</p>
<p>Sounds like she’s trying to take advantage of a situation. If the travel line was clearly defined as a RT biz class ticket that’s a fairly easy thing to verify and is commonly known. I travel quite a bit internationally and work for a European company, so we all know the typical cost of airfare to various parts of the world. </p>
<p>If she was just focussed on the bottom line and the components were clearly spelled out, that’s a poor reflection on her attention to detail. </p>
<p>off-topic, to all the HR folks…our pay statements are now only available on-line, which is a huge PITA to check every 2 weeks, so I don’t. My husband often comments to me when he’s doing our online banking that my pay went up/down a few $s. I don’t even focus on it. While it may be a time saver for HR, it probably ends up costing employees more time. (and it really doesn’t save trees - most paper is made from chips from the sawmill process or trees that were thinned so the surrounding trees can grow bigger to become lumber).</p>
<p>nj2011mom: I am in HR and I agree it’s a PITA to have to check on-line. However, even when people get hard-copy paystubs, they don’t open them or look at them. People also complain about the fact that they then have to dispose of something that they don’t want anyone else to see.</p>
<p>post 23 has in interesting perspective about his bonus, but I think a difference here is that I think the formula for figuring the travel cost was provided, unlike the previous bonus example.
If the formula says(for example): rt biz flight Washington DC to Paris in June, $39,000, then any adult that had traveled in the last 10 yrs would know thats about 10 times the cost of such a flight. That would either be an example of a HUGE! stipend included with the ticket, or WAY obvious error. Either way, anyone not trying to capitalize on an obvious error would say “What is this?”</p>
<p>nj - my company has done online paystubs ever since I’ve been working there. Can you access the system from home? If I need one, I just pull it up at home and print out a copy. The system saves them for two years and i can have as many copies as I need of certain ones without taking up unnecessary space in my filing cabinets. </p>
<p>I do have to check mine every time because when you paychecks vary as much as mine do, you need to be on top of it. My company does things a bit funky… we’re ‘salaried’ at x amout of money… when you get a raise it’s a percent of x amount of money, rather then say 50 cents an hr or whatever… but in our paycheck they convert it to an hourly rate and we do get paid time and a half on overtime, even though we’re ‘salaried’. we then get performance ‘bonuses’ or ‘incentives’ in one pay check a month. Some of these show up under one line item on our pay check, other show up on other line items, etc. you need to be on top of things to make sure everything you are supposed to be getting is in there, to the best of your ability. Then, if you worked any overtime, they go back and re-calculate what you would have been paid hourly based on your salary plus the amount of incentive that you earned during that pay period. They then pay you an adjustment on your overtime pay. It’s quite complicated. So if someone makes… say 15 dollars an hour base pay, which is 22.50 on overtime… and they work five hours OT, they’ll get that 22.50x5 in their paycheck. Now at the end of the month when incentives get released, if they figure out that your incentive worked out hourly worked out to be 5 dollars per hour, they’ll go back and pay you an extra 7.50 per hour for each of those 5 hours that you worked. These things all show up differently in each paycheck. I remember showing pay stubs to my loan person when I was getting my house and she looked at it like it was a foreign object. :)</p>
<p>I had gotten two 200 dollar incentives for something one time and for some reason only one went in my paycheck. I think it took me like two months to get the other 200 dollars straightened out with HR. Apparently they thought it was a typo when two were requested.</p>
<p>The employee could decide not to go on any vacation and pocket the money…so it could have been seen by her as another way for the company to get her more money to give her an incentive to make the move.</p>
<p>The number was on the summary sheet (with the calculations hidden somewhere in a twenty page document). The package was presented to her by someone in HR, who I assume went over the numbers on the summary sheet. Obviously the number didn’t jump out at the HR person or he or she would have jumped up and said that something didn’t look right and check it out. I have to assume that the package was checked by someone in your department. </p>
<p>This person relied on the numbers and made changes that can’t be undone. I say, pay her the $25,000 and put in procedures to make sure this kind of mistake doesn’t happen again.</p>
<p>This is a situation where the ethics and the law may diverge. Even assuming that she knew that this was a typo, depending on the law where you are located, the company may be liable at least this one time. Since I am not a lawyer anywhere outside of the US, the general legal statements below, are not meant to apply to your issue, since the law of the country where you are will be controlling. These opinions are illustrative only.</p>
<p>I do not think this matter is the same as the example of the obvious advertising error. There are elements here that would be viewed as an employment contract (at least where I live.) In contrast, the advertising example is not a contract, but an offer, which can be withdrawn under many circumstances. All caveats that the law of you present place of business must be evalutated: If the terms are in conflict (worksheet vs. benefit description), which they appear to be, there are a number of factors which would be examined if this were to be litigated. The employee has suggested detrimental reliance, i.e. that she would not have moved to another country for this job etc, etc but for this money. If she could prove this, she might be able to be successful in a court. Of course, the company has its rights (i.e. termination under permitted situations - the contract probably has some outs for the employer), amendment after the initial term, non renewal, to name a few. She might not be able to prove detrimental reliance, as there are countervailing facts, too. I assume that this money, even $25,000 is not that big when compared to her total package, which included relocation, school tuition and other benefits. If this amount is a small percent of the total, it may not be reasonable to find that she really did rely to her detriment. </p>
<p>All that said, my own personal view of compensation for employees is that I should pay them what they want or hire someone else. If they are not happy with the money, they won’t do a good job, and they will look for other work. I would probably look to HR, who made the error, to approve the money, and clarify that this will not be paid a second time. She can then stay or go as she pleases during the second year. I wouldn’t like someone who took advantage of a typo, and she might not sue or quit over it if you don’t pay, but I think her behavior is probably average in such a situation.</p>
<p>There is another possibility- sometimes people threaten suits, and yes, sometimes even file suits not because they feel they’ve been wronged and want a judge to rule in their favor. Sometimes the strategy is that the deep pockets(company) may rather settle than fight in court. Sadly, any attorney that does this contributes to the poor reputation of attorneys. While I’m sure there are just a few, this gives all attorneys a “black eye”.
Unfortunately the OP cannot read the mind of the employee to truly know what was believed and what might be convenient to appear to have believed.</p>
<p>anothermom2 - thank-you very much for your very professional opinion on this matter ( I just got a freebie from a lawyer). </p>
<p>The offer was done in the US and she is still considered as an employee of US, so I think the US law would govern. </p>
<p>Additional information…the reason I kept on referring to it as a worksheet is because it is not something we would normally show to an employee. It is used more for management to figure out how much an expat would cost (someone with 5 kids would be a lot more expensive than someone with one kid). The worksheet is not normally checked carefully because it is meant to be an estimate. </p>
<p>Myself and other expats never saw our worksheet. We are given an offering letter, which this employee also received. In the letter, it states the base salary, and each benefit we would receive during the secondment, but not the dollar amount. As an example, the company would pay for travel in accordance with our global secondment policy, the company would pay for school tuition. The reason we don’t put down exact dollar amount is because all of those costs could vary. The problem we have here is this employee’s HR showed her the worksheet.</p>
<p>I spoke with legal and HR today. Our legal said even if it (worksheet) is a contract, it does allow for typo, especially when it is so obvious (10 times of normal amount). It is further supported by how much we pay other expats in the similar situation as this employee, and the amount is calculated according to policy.</p>
<p>HR advised me not to pay in order to adhere to policy. The amount could be easily made up at bonus time because it is a small percentage of employee’s total compensation. If the employee would quit over this then she is being short sighted.</p>
<p>I am trying to see if we could offer her something else in lieu of paying her this amount.</p>
<p>The question of whether your employee relied on the 25K is one part of it- you acknowledge that she did. Whether or not it was reasonable for her to do so is the other part. Depending on the ambiguities in the documents and the facts of the case, if it ever went all or nothing (law suit) I could see where it could go either way. If the employee stands to lose more than she’d gain, it’s unlikely she’d choose to take it to that level, but if she doesn’t care about her future with the company, I suppose anything is possible. If I were you, I’d compromise - offer her some kind of a reasonable settlement.</p>