The 9,000 Microsoft "permatemps" have cleared what may be the final hurdle to getting $97 million they won in 2001 from a lawsuit against...

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The 9,000 Microsoft “permatemps” have cleared what may be the final hurdle to getting $97 million they won in 2001 from a lawsuit against the company.

After a series of procedural delays, the payouts were awaiting an Internal Revenue Service ruling on how taxes would be withheld.

Yesterday, an attorney for the contract workers said IRS negotiations have concluded and the agency is expected to sign off on a taxation approach shortly.

“We don’t anticipate there will be any difficulty with it now,” said attorney Judith Bendich at Bendich, Stobaugh and Strong in Seattle.

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That means checks could be sent in mid- to late October to the people who worked on long-term assignments for the company but were denied the benefits paid to regular employees. They first sued in 1992 in a case that eventually led to Microsoft changing its policies and limiting the duration of temporary-worker jobs.

A final agreement with the IRS was received on Aug. 3, signed by the lawyers and returned to be finalized by the IRS within two or three weeks, Bendich said.

After the IRS signs off, a payment-distribution plan will be submitted for court approval.

The taxation is complex. The IRS considers the checks to represent income from wages, interest and investment gain, according to Bendich’s firm.

News about payouts from the settlement has come in fits and starts as the process dragged out through the years. A recent report that the IRS had made its ruling, for instance, proved to be premature.

An IRS spokeswoman in Washington, D.C., referred questions about the settlement process to a spokeswoman in Seattle, who could not comment and referred a reporter to the D.C. media office.

Details are posted at a Bendich, Stobaugh and Strong Web site: www.bs-s.com/msoft.html.

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com