Microsoft Agrees to $14.4 Million Payout Over Allegations of Penalizing Workers Who Took Parental and Disability Leave

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Disclaimer: The information presented here is for general informational purposes only and is not intended to provide specific legal or financial advice. Always consult with a professional advisor before making any significant decisions.

Microsoft Corporation has agreed to pay $14.4 million to settle allegations that it retaliated and discriminated against employees who took protected leave, such as parental and disability leave. This announcement was made by the California Civil Rights Department on Wednesday.



Background of the Case

The proposed settlement is the result of a multi-year investigation by the California Civil Rights Department. The consent decree, which is subject to approval in the state court in Santa Clara County where Microsoft has an office, stems from an investigation that began in 2020. The agency alleged that Microsoft employees who took leave due to pregnancy, disability, or to bond with a new baby or care for a sick family member, were penalized. These penalties included receiving lower bonuses and unfavorable performance reviews, which negatively impacted their eligibility for merit pay increases and promotions.

Disproportionate Impact on Vulnerable Groups

The department highlighted that this practice disproportionately affected women and people with disabilities. Kevin Kish, the civil rights department director, commended Microsoft for agreeing to make necessary changes to protect workers in California.

Microsoft’s Response

In response, Microsoft issued a statement claiming that the agency’s allegations are inaccurate. However, the company expressed its commitment to continue listening, learning, and supporting its employees.

Settlement Terms

As part of the proposed settlement, Microsoft will implement measures to prevent future discrimination. This includes updated training for managers and monitoring by an outside consultant to ensure compliance.

Allocation of Settlement Funds

The majority of the settlement funds, $14.2 million, will go to the affected workers. The employees covered under this settlement worked at Microsoft from May 13, 2017, to the yet-to-be-determined date of court approval for the settlement and took at least one leave protected under state or federal law. Each eligible employee will receive a base payment of $1,500, with additional amounts determined by factors such as salary and length of employment.

Microsoft’s Workforce

Microsoft employs approximately 221,000 people worldwide, including nearly 7,000 in California. The California Civil Rights Department did not provide an estimate of how many workers could receive payments from this settlement.

Conclusion

This settlement underscores the importance of ensuring that employees who take legally protected leave are not unfairly penalized. The measures that Microsoft will implement as part of this settlement aim to create a more equitable workplace, free from discrimination and retaliation.

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