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June 19, 2001
Oops: Firm Seeks Return of Severance Pay
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Jose, Calif.-based Komag laid off some workers in January, giving all of them two weeks' severance pay for every year of work - though it meant to give them only one week per year.

So about 60 former employees of the Komag computer-disk factory in Eugene, Ore., and an undisclosed number in San Jose received letters from their former employer recently, demanding return of some of the money.

Komag blamed everything on a "clerical error," according to the Eugene Register-Guard, which also reported that the financially strapped company has been aggressive in reclaiming the money, which apparently totals hundreds of thousands of dollars.

Komag and the former employees are in an unusual bind, employment experts say.

"I haven't heard of any situation like this," said Linda Kessel, an employment attorney with the Eugene firm of Harrang Long Gary Rudnick.

Ten former Komag employees interviewed by The Register-Guard agreed that the money is the company's, but most said they didn't realize they were getting overpaid.

Their check amounts didn't seem unusually high because the severance was lumped with their two final weeks of pay, plus vacation pay, they told the newspaper.

"I assumed they knew what they were doing," said one ex-employee, Alexandria Scholes.

Scholes, a facility maintenance technician at Komag for 3 1/2 years, is unemployed while enrolled at a computer-training program at a local community college.

"I don't have the money to pay it back right now," Scholes said. "I have bills I have to pay from whatever I get from unemployment and financial aid. Until I can get a job, there's not a whole lot I can do to take care of that problem."

Komag has worked out payment plans with some laid-off workers, Chief Financial Officer Ted Siegler said.

Komag would be having an easier time if the workers were still on its payroll, since employers that accidentally overpay employees generally can deduct the difference from future paychecks, said Christine Hammond, administrator of the Oregon Bureau of Labor and Industries wage and hour division.

But the bureau wouldn't get involved in a case like Komag's.

"We pursue unpaid wage claims. If an employee were paid in full, there wouldn't be a claim for us to be pursuing," Hammond said.

Komag has pressured employees with increasingly threatening letters, according to the Register-Guard. The threats include taking the former employees to court.

To view the Register-Guard story, click here.
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