An objectively good thing happened in big tech Thursday: Microsoft said it will require companies that supply it with subcontractors—think cafeteria and custodial staff—to give those workers 12 weeks of paid parental leave. In doing so, Microsoft is once again taking the lead in ensuring contractors get benefits that other big companies reserve for full-time employees.
Back in 2015, Microsoft began requiring its suppliers to give their employees 15 days of paid vacation and sick leave annually. That prompted other tech companies like Facebook to follow suit. Labor advocates hope Microsoft’s new parental leave policy inspires a similar trend.
Thursday’s announcement builds off that work. “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,” wrote Microsoft VP and General Counsel Dev Stahlkopf in a blog post. It will not cover individuals who contract with Microsoft themselves.
These workers will be guaranteed 66 percent of their wages or up to $1,000 a month for three months. Microsoft notes that this policy will be a minimum requirement; if local laws require a more generous leave package, employers will need to adhere to that. Paid parental leave has been shown to help everyone—children, parents, and employers, which retain workers at a higher rate if they offer it.
“Cleaning all of the floors every night is not easy. I need maternity leave because it gives me the time for my body to heal and recover,” says Hajira Aden, a janitorial worker with SBM Site Services who works at Microsoft, and is a member of the Seattle chapter of the Service Employees International Union. Aden is currently on unpaid maternity leave, but would be covered by this new policy had it been in effect. “To get by, I have to rely on short-term disability to cover my bills,” she says, noting the new parental leave policy will help families like hers in the future.
That Microsoft is requiring not just maternity leave, but paternity leave as well is especially important. “Taking paternity leave leads to greater gender equality within the household, and that, of course, makes it easier for the mother to return to work,” Eileen Appelbaum, an economist and co-director of the Center for Economic and Policy Research, tells WIRED. She says research suggests fathers who are able to bond with their children in those early months end up being more involved in their lives forever.
The policy will help bridge the gap between full-time employees at Microsoft, who already had generous leave benefits, and the thousands of contractors working at all levels of the company—from landscaping staff to contract IT workers—whose contributions are often less celebrated and compensated.
“Our hope is that this type of action brings forth a robust conversation about the working conditions and benefits for subcontractors,” says Maria Noel Fernandez, campaign director for Silicon Valley Rising, a coalition of advocates for labor equality in the tech industry. And that’s a lot of workers. According to the American Staffing Association, 15 million people in America are employed with contracting companies that staff workers for corporations; about 13 percent of those—roughly 2 million people—work in tech or scientific sectors. Indeed, Google parent company Alphabet reportedly has more contract workers than full-time employees.
Fernandez notes that while this move is encouraging, Microsoft doesn’t have the cleanest record in supporting its subcontractors. Just this month Bloomberg reported that after Microsoft bug testers unionized in 2014, they were fired by their employer, Lionbridge Technologies.
Thursday’s announcement is part of an image shift for Microsoft. As Silicon Valley has faced increased criticism in the past two years, Microsoft has been trying to position itself as the moral conscience of the tech industry, a change from its former reputation as a competitive bully.
Whatever the motivation for the move, family leave advocates are applauding. “Companies like Microsoft know that offering paid leave isn’t just the right thing to do, it’s good for the bottom line, helps increase gender equity in the workforce, and allows people to stay employed and get ahead,” says Ellen Bravo, co-director of Family Values at Work.
The corporate policy change comes at a time when the lack of paid leave in the US stands in stark contrast to the rest of the industrialized world. In fact, the United States is the only high-income country that does not offer government-subsidized paid parental leave for mothers or fathers. Of the 193 countries in the UN, the US is part of a small group that offers no paid leave for new parents, according to UCLA’s World Policy Analysis Center. The others? Suriname, New Guinea, and some Pacific island nations.
Without a federal leave program, American workers have little access to paid parental leave. Microsoft notes in its announcement that this is true even for professional positions. Only 22 percent of professional workers have such a benefit, according to the Bureau of Labor Statistics. For service and maintenance workers the number is even smaller—7 percent.
The result: Parental leave becomes a luxury available only to those who work for certain companies. That leads to devastating and wide-ranging effects. Not only does it cause many women to return to work before they are physically healed from childbirth, but it cuts crucial early-life bonding time babies need, and leads to gender and pay inequality.
“We have to ensure time to care does not remain a workplace perk dependent on who you work for or where you live,” says Bravo. She advocates for a federal social insurance fund, like those in place in a handful of states.
15 million Americans work for companies that staff workers for corporations. Of those, about 13 percent—roughly 2 million people—work in tech or scientific sectors.
Washington, where Microsoft is headquartered, will soon be one such state. In 2020, a new Paid Family and Medical Leave law will go into effect there, allowing workers to draw from an insurance fund financed by a payroll tax. Microsoft modeled its new policy after the Washington law. Stahlkopf says the company didn’t want to leave contractors in other states behind, “so we made a decision to apply Washington’s parental leave requirement more broadly, and not to wait until 2020.”
When that law goes into effect, Washington will be only the fifth state to require paid leave. Microsoft contractors in California, New Jersey, New York, and Rhode Island will benefit from state insurance pools that will help cover paid family leave. Contracting companies in other states will be left to cover the cost themselves, which could be burdensome.
All of which underscores why a piecemeal, state-by-state, business-by-business solution will never be enough. “All workers deserve the Microsoft treatment. And the only way that all workers are going to get the Microsoft treatment is if we get a federal solution,” says Kathleen Romig, senior policy analyst at the Center on Budget and Policy Priorities.
Recently, members of Congress have shown some bipartisan interest in a federal paid-leave bill. On August 2, Republican Senator Marco Rubio of Florida, with input from Ivanka Trump, introduced a paid family leave bill that would allow some new parents to draw from their future Social Security income to pay for parental leave.
But Romig and other critics say that Rubio’s bill doesn’t adequately solve the problem, and arguably puts working parents at a disadvantage later in life, noting that low-income workers disproportionately need Social Security. “It’s very problematic to use Social Security as a piggy bank. I don’t think we should be asking parents to forgo their future retirement to take family leave,” she adds.
Romig and Bravo say a different paid leave bill does a better job of helping working families. The Family Act, introduced in 2017 by Senator Kirsten Gillibrand of New York and Representative Rosa DeLauro of Connecticut, both Democrats, would provide a two-thirds wage replacement for parental or medical leave, without having to draw down Social Security. Instead, workers would pay a modest payroll tax increase to support the benefit.
A recent survey from benefits provider Unum of 1,227 employees across America found that paid family leave was the most desired workplace benefit—particularly among millennials. Voters of every political affiliation overwhelmingly support a federal paid parental and medical leave benefit of some kind, according to a survey of 1,004 voters commissioned this summer by the National Partnership for Women and Families. This suggests many people would be willing to pay a small payroll tax to secure such a benefit.
The Family Act would provide paid leave for new parents, but also for any worker needing to care for a loved one. That, advocates note, is where Microsoft’s policy is still lacking. “More parental leave is obviously a good thing,” says Silicon Valley Rising’s Fernandez. But, she adds, “as we think about what the standards are of these jobs, it’s a fraction of what’s needed if Silicon Valley is really serious about improving the lives of its subcontracting staff.”
At least it’s a good start.