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Microsoft to require paid parental leave for suppliers’ employees

August 31, 2018

Microsoft will require its suppliers to offer eligible employees in the US a minimum of 12 weeks paid parental leave, up to $1,000 per week, the software giant announced yesterday in a blog post by Corporate VP and General Counsel Dev Stahlkopf.

The decision follows a policy enacted in 2015 mandating 15 days paid time off for eligible contract workers.

The Redmond, Wash.-based software giant will work with it US vendors over the next 12 months to implement the new paid parental leave policy, which applies to all parents employed by Microsoft suppliers who take time off for the birth or adoption of a child. The new policy applies to suppliers with more than 50 employees and covers supplier employees who perform “substantial work” for Microsoft. 

These types of benefits and incentives are great not only for the contingent workers but for the industry as a whole, said Dawn McCartney, senior director, contingent workforce strategies and research, the Americas, at Staffing Industry Analysts.

“We are currently experiencing something companies are not used to dealing with … extremely low unemployment rates and a war for talent,” McCartney said. “Although the tech companies in Silicon Valley have always struggled to compete for talent, we are seeing this affect organizations everywhere, not just in the technology vertical. The demand for talent is impacting every role, from light industrial/blue collar to the professional roles. In order for companies to truly have a competitive advantage, they are going to need to get creative and to be willing to give more than they have up to now, even if it means there is a cost associated to it.”

Microsoft’s paid parental leave policy is informed by state laws, including one in Washington state that was passed in 2017.

“Microsoft will work with our suppliers to understand the impacts of this change, and we will make these changes in a thoughtful way,” Stahlkopf wrote in the blog post. “We appreciate that this may ultimately result in increased costs for Microsoft, and we’ll put a process in place for addressing these issues with our suppliers. Our first step will be reaching out to our suppliers to discuss the impact of this policy change.”

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