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FCA Overpaid Workers $12 Million In Unemployment Benefits And It's Taking The Money Back

Illustration for article titled FCA Overpaid Workers $12 Million In Unemployment Benefits And Its Taking The Money Back
Photo: Getty Images

Fiat Chrysler, an automaker that made $3 billion in operating profit last year, is having 24,000 of its workers pay back an average of $500 in unemployment benefits they received from the company after the U.S. government raised its unemployment allowance.

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Prior to the Covid-19 virus outbreak, FCA’s contract with its hourly employees under the United Auto Workers union had a specific threshold of unemployment aid required to be paid by the automaker in the event of temporary layoffs.

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Workers receive 74 percent of their normal 40-hour workweek pay on unemployment, and FCA has to make up the rest to satisfy the full amount of the worker’s normal paycheck.

But due to the virus and the economic shutdown that followed, the U.S. government’s unemployment benefits were retroactively increased, meaning some workers got double-pay from the government and FCA, according to Automotive News:

Fiat Chrysler Automobiles says it overpaid about 24,000 hourly employees while their plants were shut down and has told them to either pay back the extra amount or have it deducted from future paychecks.

On average, the workers received $500 more in supplemental unemployment benefits than they were contractually entitled to, FCA said. The overpayments occurred because a federal coronavirus relief program retroactively increased the workers’ government unemployment checks for the week ending April 4, taking their total compensation above the level that FCA’s contract with the UAW requires during a temporary layoff.

If you multiply 24,000 workers by an average of $500 each, that amounts to about $12 million in over-payment from Fiat Chrysler. That’s just 0.4 percent of the company’s operating profit last year.

FCA expects workers to pay back the extra money they received either up front in a lump sum, or it will be deducted from their future paychecks in $100 weekly increments. An FCA spokesperson told Auto News that many have already repaid, and the UAW claims there are no official grievances yet (probably because nobody actually worked any hours).

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On the one hand, 24,000 workers just got a free, small loan from their employer during harsh economic times that they can repay in relatively small increments in the future. If that had been planned, FCA would be heralded as a heroic employer.

But of course the bigger point here nobody likes talking about is a company that makes billions in profit refusing to embrace a small mishap and even consider letting their workers keep a nice bonus during hard times.

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Where is that $12 million going to now? The snack bar in the boardroom where you all try to figure out the Chrysler 200 again?

Reviews Editor, Jalopnik

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DISCUSSION

Man, they could have turned this into a positive PR opportunity and instead they thought of the shareholders and turned it into a negative one. This will not go well.