California’s Office for Civil Rights announced Wednesday that global software giant Microsoft has agreed to pay $14.4 million to settle allegations that it retaliated and discriminated against employees who took protected leave such as parental and disability leave.
The settlement is the result of a years-long investigation by California authorities, and the consent decree awaits approval by a state court in Santa Clara County, where the Redmond, Washington-based company has an office.
State officials, who launched an investigation in 2020, alleged that employees who took time off work due to pregnancy, disability or to bond with a newborn or care for a sick family member received docked bonuses and unfavorable performance reviews.
These factors in turn undermine employees’ eligibility for performance pay increases and promotions, and the practice disproportionately affects women and people with disabilities, the ministry said.
In a statement, Civil Rights Director Kevin Kish praised the company for “coming to the negotiating table and agreeing to make necessary changes to protect California workers.”
In a statement, Microsoft said the allegations were inaccurate but that it “continues to listen, learn, and support our employees.”
As part of the settlement, Microsoft will take steps to prevent future discrimination, including updating its management training, and an outside consultant will monitor and report on the company’s compliance.
The bulk of the settlement, $14.2 million, will be paid to affected workers who worked for Microsoft between May 13, 2017 and the date of court approval of the settlement (to be determined) and took at least one state or federal protected leave day.
Eligible employees will each receive a base salary of $1,500, with additional increases based on salary, length of employment and other factors.
Microsoft has about 221,000 employees worldwide, about 7,000 of whom live in California, according to the California Department of Civil Rights, which did not have an estimate of how many employees might be eligible for compensation.
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