Microsoft Mandates Key Suppliers To Give Employees Paid Sick and Vacation Time

In a move that could broaden the discussion on income equality beyond gender, race and status, Microsoft will require its suppliers of contract workers to offer them paid vacation and sick time. The new policy, which applies to suppliers with 50 or more employees ranging from engineering and development staff to maintenance and security personnel at its numerous facilities, requires they offer either 10 days of paid vacation and five days of paid sick leave or 15 days of unrestricted paid time off.

Brad Smith, Microsoft's general counsel, said yesterday in a blog post that employees in the U.S. who have worked at least nine months, or 1,500 hours, "who perform substantial work for Microsoft," will be eligible. It's unusual for a large U.S. company to issue what could amount to a costly stipulation for suppliers, but one long sought-after by proponents of fair pay and income equality  The move could lead other companies to enact similar benefits, a report in The New York Times today suggested.

The U.S. doesn't require paid sick leave and 43 million workers aren't offered it, according to the report. Consequently, many people are forced to come to work when they're sick, which often makes others sick and reduces productivity, Smith said in his blog post. Citing a University of Pittsburgh study, Smith said when an employee doesn't come to work when he or she has the flu, it reduced the risk of others catching it from that person by 25 percent and when taking two days off it reduced transmission of the virus by 39 percent.

Another survey, whose source he didn't identify, found only 49 percent of those in the bottom fourth of earners, receive paid time off.  "Lack of paid time off also has a disproportionate impact on minorities at a time when the tech sector needs to do a better job of promoting diversity," Smith noted.  We've long recognized that the health, well-being and diversity of our employees helps Microsoft succeed. Our commitment to them extends beyond the workplace."

While it isn't clear how many employees will benefit from the company's new mandate, Microsoft uses 2,000 outside suppliers who provide contract employees overall, according to The Times report. It surely is likely to raise the ire of those who have fewer employees or individuals who provide contract services to Microsoft. "We recognize that this approach will not reach all employees at all of our suppliers, but it will apply to a great many," Smith said in his blog post. "We've long recognized that the health, well-being and diversity of our employees helps Microsoft succeed. Our commitment to them extends beyond the workplace."

Some suppliers surely won't welcome the move as offering paid time off will be more costly for them. Smith indicated that Microsoft will work with them. "We also want to be sensitive to the needs of small businesses," Smith said. "For these reasons, we are going to launch a broad consultation process with our suppliers so we can solicit feedback and learn from them about the best way to phase in the specific details."

Whether or not Microsoft's move will lead other companies to enact similar policies remains to be seen. Employees working for a smaller company may feel further left out. But if you're a proponent of fairness in pay and compensation, this is a noteworthy step to further that goal.

Posted by Jeffrey Schwartz on 03/27/2015 at 12:46 PM