Microsoft To Require Its U.S. Suppliers To Offer Paid Leave

03/26/2015 12:20 pm ET | Updated Apr 01, 2015
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For the past several months, White House officials and Democrats in Congress have been using the bully pulpit to encourage more U.S. businesses to offer their workers paid leave. Their motto: “Lead on leave.”

On Thursday, Microsoft showed them how it’s done.

In a blog post on the company’s website, Brad Smith, a Microsoft vice president, announced that Microsoft will be taking steps to require all of its large U.S. contractors to offer their workers at least 15 days of paid leave per year. That time could come “either through 10 days of paid vacation and five days of paid sick leave or through 15 days of unrestricted paid time off,” Smith wrote.

There are certain restrictions. The new requirements will apply only to suppliers with 50 or more employees, and within those firms, they'll apply only to employees who have worked there for at least nine months and do “substantial work” for Microsoft.

While the new terms certainly won’t apply to everyone in Microsoft’s supply chain, the company said they “will apply to a great many.”

Like any modern U.S. firm of its size, Microsoft deals with all sorts of suppliers, “from building maintenance to management consulting and campus security to software localization,” as Smith noted Thursday. A lot of these companies may already offer their workers the paid time off that Microsoft will require, but plenty of them probably don’t. For example, it's not hard to imagine that the janitorial firms whose workers clean Microsoft’s offices at night don't currently provide the kind of paid time off that Smith describes.

If Microsoft stands by its pledge, then the companies that fail to meet its standard will lose Microsoft’s business. The company said it plans to work with its suppliers over the next year to help them implement the new policies.

By using its considerable contracting power to encourage more paid leave, Microsoft is taking a step that even the White House, for all its talk on the subject, has been loath to pursue.

The federal government holds more contracts than any private-sector firm -- a power that presidents going at least as far back as Franklin Roosevelt have wielded to set higher labor standards. Officials in the Obama White House have used procurement rules to raise working standards in several ways, like setting a new minimum wage for contractors and cracking down on wage theft. But as The Huffington Post has reported, White House officials have thus far declined to give contracting preference to firms that offer paid leave.

Though the standards vary, other developed countries already have laws in place that guarantee workers some amount of paid leave, be it vacation time, sick days or child leave. The U.S. doesn’t require private-sector businesses to offer such perks, and lower-income workers are less likely than their better-paid counterparts to have some kind of paid leave. Current U.S. laws on the matter are unlikely to change any time soon, with Republicans controlling both chambers of Congress.

In his blog post, Smith said that Microsoft believes offering paid leave is not only a nice thing to do but also a good business practice, leading to a “happier and more productive workforce.”

“The people who work for our suppliers are critical to our success and we want them to have the benefit of paid time off,” he wrote.

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