To do business with technology giant Microsoft, the companies who want to run cafeterias, desk operations, miscellaneous work and other functions will have to abide the new rule of Microsoft by offering paid parental leave to their employees. 

Three years ago, Microsoft announced that it would require a wide variety of suppliers that do business with them in the United States to provide their employees with the important benefit of paid time off. Lately, the company has announced that over the next year it will take a further step, to ensure that these suppliers also provide their employees who handle our work with paid parental leave.

According to the technology giant, paid time off is good both for employers and employees, and it was the right step for their business. By implementing that requirement, the company can focus on their resources on businesses that share a commitment to providing employees with important benefits such as paid time off. 

What is Microsoft doing?

Over the next 12 months, the company will work with the U.S. suppliers to implement this new paid parental leave policy. It will require that suppliers offer their employees a minimum of 12 weeks paid parental leave, up to $1,000 per week. This change applies to all parents employed by our 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.  This minimum threshold applies to all the suppliers across the U.S. and is not intended to supplant a state law that is more generous. Many of the suppliers have already offered strong benefits packages to their employees and suppliers are of course welcome to provide more comprehensive leave benefits to their employees.

Microsoft will work with the suppliers to understand the impacts of this change, and it will thoughtfully make these changes. The company appreciates that this may ultimately result in increased costs for Microsoft, and it’ll put a process in place for addressing these issues with the suppliers. The company’s first step will be reaching out to the suppliers and discuss the impact of this policy change.

The case for paid parental leave

The company took this decision during an ongoing national dialogue about the importance of paid parental leave. The case for paid parental leave is clear. Studies show that paid parental leave enriches the lives of families.  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.  Employers who offer paid time off for new mothers experience improved productivity, higher morale and lower turnover rates. And, paid parental leave is not solely a benefit for women, when men and women have the opportunity to take paid leave, it can help counteract gender caregiving stereotypes, neutralize stigmas and promote equity in the home and office.