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01/13/2011 08:44 am ET | Updated May 25, 2011

Yale Payroll Gaffe Costs Gay Employees Thousands

Sixty-one Yale employees with same-sex partners will face reductions of thousands of dollars in their salary over the coming year, reports the New York Times.

Due to confusion regarding differences between state and federal tax laws for domestic partnerships, those employees with same-sex partners -- for whom Yale extends health coverage -- were wrongly listed as tax exempt on national forms. Because their unions are not recognized as marriage on a national level, the employees should have only received Connecticut tax breaks. The error lead to tax exemptions in 2010 that are technically illegal.

In late December, Yale sent out a letter to those effected, informing recipients of the mistake and explaining that to compensate for the error, Yale has covered the discrepancy and will deduct the amount owed over a three-month pay period.

For some, this means a crippling paycheck reduction. One employee told the Times that the decrease would amount to 33 percent of take-home pay before accounting for this year's taxes, and that some were liable to take an $8,000 hit this year.

Change.org called the issue a "colossal mix-up" and said that a handful of universities and companies have adopted a policy called "grossing up" to avoid such situations.

A Yale spokeswoman told the Times that the university will work with those for whom the cuts are a hardship: "For those employees, greater repayment flexibility will be provided on an individual basis."

What do you think of this mistake? Should Yale offer to cover such discrepancies for employees with same-sex partners, like some organizations have started to do? Let us know what you think in the comments section.

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