I'm no HR expert, and not sure I fully understand the issue, but:
1. You don't want to reward those who took off too much time, but you don't necessarily want to assume it was their fault completely.
2. You certainly don't want to punish those who were careful and honest.
How about splitting the difference, for example:
Those who took off the extra time pay back half of it.
Those who didn't get 1/2 the extra time off.
Obviously doesn't have to be half, but some number of days that everybody gets free because of the Paycheck company error.
And maybe try to pry a discount out of the Paycheck company to make up for it.
Michael
