Microsoft demands its suppliers, contractors to offer employees paid family leave, or risk doing business with them

Microsoft declared in a new policy on Thursday, that its suppliers and contractors will have to provide no less than 12 weeks of paid leave to new parents, for either a birth or an adoption. The tech giant mandated a pay of up to $1,000 per week for those on paternity leave, and has offered vendors 12 months to implement the change if they want to continue to work with them. This applies to vendors with more than 50 employees and covers workers involved in substantial projects for Microsoft.

The decision was spurred by a new parental leave legislation that will take effect in Washington in 2020. “While the law will benefit the employees of our suppliers in Washington State, it will leave thousands of valued contributors outside of Washington behind,” Ms. Dev Stahlkopf, Microsoft’s general counsel said, adding that Microsoft’s new policy will affect thousands of workers outside of Washington. “We understand this may increase our costs, and we think that’s well worth the price,” she opined.

Currently, Microsoft provides its own employees 12 weeks of fully paid leave for new parents, and an additional eight weeks for birth mothers. With this mandate, it is inching toward providing similar benefits to a workforce that isn’t directly employed under them.

“Studies show that paid parental leave enriches the lives of families,” Stahlkopf said, adding that women who take paid maternity leave are more likely to be in the workforce a year later and earn more than mothers who do not receive paid time off.

At present, a meagre 13% of private sector workers in the United States have access to paid parental leave, the Bureau of Labour Statistics reveals. Some experts affirm that measures like these reinstate the importance of parental benefits, but contend that a concrete federal policy be established to improve work-life balance of employees.

“That’s the only way we’re going to see large margins of low- and middle-income Americans get access to paid leave,” said Adrienne Schweer, a representative of the Paid Family Leave Task Force at the Bipartisan Policy Center, a Washington, D.C. based think tank.

For more details visit the Microsoft Blog.