Microsoft Is Outlier With Paid Leave Contractor Policy

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By Genevieve Douglas

Microsoft stands alone, for now, with its new policy to require U.S. suppliers to provide paid family leave benefits for subcontractors providing janitorial, food, and other services.

Only a handful of companies have required paid parental leave standards among their contractors and vendors, Ellen Bravo, director of the Family Values @ Work consortium, told Bloomberg Law. “Our expectation is that it won’t reach large numbers of people.”

Microsoft Corp. announced Aug. 30 that it would require its contractors in the U.S. to give workers paid time off for new parents. The new policy requires companies to provide at least 12 weeks of paid time off, up to $1,000 a week, at the birth or adoption of a new child to qualify for a contract with the tech giant. The policy will apply to companies with 50 or more workers that perform “substantial” work for Microsoft Corp.

This is a new strategy to expand paid parental leave benefits. Family leave hasn’t “really become an issue yet” among staffing companies, Toby Malara, government affairs counsel for the American Staffing Association, told Bloomberg Law. Staffing, recruiting, and workforce solutions companies hire more than 15 million temporary and contract employees per year, ASA data show. Only 7 percent of workers in the private services sector have access to paid family leave, according to the U.S. Bureau of Labor Statistics.

The reality of paid leave benefits is “they aren’t monolithic,” Maria Noel Fernandez, campaign director for Silicon Valley Rising, told Bloomberg Law. “Each company engages on these issues in a different way,” although the technology sector has the unique ability to require paid leave among sub-contractors because the organizations have the money to make it happen.

States’ Influence

Paid leave legislation at the state and local level are largely driving companies’ strategies on paid leave benefits.

That was certainly the case for Redmond, Wash.-based Microsoft, as the state’s paid family leave law will require subcontracted employees to receive paid parental leave benefits starting in 2020, Dev Stahlkopf, corporate vice president and general counsel for Microsoft, said in a blog post announcing the new benefit requirements.

Only a handful of states and the District of Columbia have programs for longer forms of paid leave; each program has different eligibility requirements, structures, financing, length of leave, and other details.

Businesses in Washington support the pending paid family leave mandate because they helped craft the legislation, Bob Battles, general counsel and director of government affairs for employment law at the Association of Washington Business, told Bloomberg Law.

“The plan we have is a good, fair plan for employers. It takes into account employers’ needs and employee needs,” Battles said. Overall, employers in Washington “want to do what’s right for employees but they also have to be able to stay in business.”

The paid leave mandate in Washington also was sparked by national discussions, Battles said. “We are seeing a trend nationwide, and Washington’s business community felt it was important to be part of the conversation.”

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