Microsoft reaches settlement in California over punishing employees for taking protected leave

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February 26, 2024, a sign on the Microsoft stand is lit up at the 2024 World Mobile Communications Congress in Barcelona. Xavi Torrent | Getty Images
Microsoft is paying $14.4 million to settle a case in California, which involves allegations that Microsoft retaliated against employees who took legally protected leave. California’s Department of Fair Employment and Housing announced the proposed settlement on Wednesday. Almost all of the money will go to California workers who took or will take protected parental, family care, or disability leave since 2017 and decide to participate in the settlement. “Due to the disproportionately high number of women and individuals with disabilities who use or are likely to use protected leave at Microsoft, Microsoft’s policies and practices that have been questioned also have a discriminatory adverse impact based on gender and disability, and Microsoft cannot demonstrate that it has a business necessity for this,” the agency said. The complaint alleges that Microsoft failed to take sufficient measures to prevent management from considering protected leave in the assessment of employees’ “impact,” which is a factor in annual bonuses, promotions, stock awards, and performance growth calculations. Microsoft, headquartered in Redmond, Washington, has approximately 221,000 employees in California, about 6,700 of whom. Microsoft did not immediately comment. Under the leadership of CEO Satya Nadella, Microsoft seeks to achieve greater diversity at the executive level, while taking a more proactive response to harassment and discrimination issues. Over the years, the proportion of women in partners, executives, directors, and managers at Microsoft has increased. According to Microsoft’s latest diversity report, women accounted for 31.2% of Microsoft’s core employees in 2023, up from 27.6% in 2019. In 2022, Microsoft said it would amend its rules on sexual harassment and gender discrimination after a report by an external group found problems with the company’s handling of complaints. Employees have reported concerns about retaliation after applying for protected leave in California. The proposed settlement states that Microsoft disputes the organization’s claims. As part of the settlement, Microsoft will provide training for California employees’ direct and second-level managers, as well as human resources staff responsible for handling bonuses and performance growth. Managers will also be instructed not to consider paid leave when making “impact” decisions. APTMetrics consultants will be responsible for monitoring compliance. Watch the video now 5:20 05:20 Microsoft AI CEO Mustafa Suleiman on the Future of AI and Humanity Squawk Box