Major suppliers will be required to offer their employees a minimum of 12 weeks paid parental leave ©PA Images
Major suppliers will be required to offer their employees a minimum of 12 weeks paid parental leave ©PA Images

Microsoft requires suppliers to provide paid parental leave

14 September 2018

Microsoft is introducing minimum paid parental leave requirements for its major suppliers.

Under the new rules suppliers of the tech giant will be required to offer employees a minimum of 12 weeks paid parental leave, of up to $1,000 a week, to all parents taking time off for the birth or adoption of a child. It will apply to suppliers with more than 50 employees and to supplier employees who “perform substantial work for Microsoft”. 

Dev Stahlkopf, corporate vice president and general council at Microsoft, said the company was making the change despite recognising it might increase costs.

Referring to the US-based company’s earlier decision in 2015 to require suppliers to provide paid time off, Stahlkopf said: “By implementing that requirement, we were able to focus our resources on businesses that share with us a commitment providing employees with important benefits such as paid time off. We believe now is the time to work with our suppliers to take a next important step.”

Stahlkopf said the move was in response to family leave legislation recently passed in Washington state that will introduce paid parental leave from 2020. Writing on Microsoft’s blog, Stahlkopf said Microsoft realised the law would only benefit supplier employees in Washington and “leave thousands of valued contributors outside of Washington behind”.

“So, we made a decision to apply Washington’s parental leave requirement more broadly, and not to wait until 2020 to begin implementation,” be said.

Citing the benefits of paid parental leave, Stahlkopf said studies had shown woman who receive paid maternity leave were more likely to be in work a year later and to earn more than those who didn’t. Employers who provide paid parental leave also saw higher productivity, higher moral and lower workforce turnover rates.

She added paid parental leave was also be beneficial to fathers, citing data from California’s paid family leave programme that showed men took paternity leave at twice the rate and for longer periods when it was paid.

Stahlkopf said the company rule was a minimum requirement and was not meant to replace state laws that offered more generous leave. “Many of our suppliers already offer strong benefits packages to their employees, and suppliers are of course welcome to offer more expansive leave benefits to their employees,” she said.

Microsoft will work with its US suppliers over the next 12 months to ensure that parental leave is implemented. Stahlkopf added it would work with suppliers to understand the impacts the new rule was having.

“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,” she said.

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