When implemented this decision will drastically change the situation that is described in The Other Microsoft. By itself it is already a very significant and positive change that deserves to be considered and appreciated. Of course we'll see in the coming weeks and months how this announcement translates into real changes for Microsoft's suppliers employees and especially for the 'temporary' workers presently deprived of any paid time off. Of particular interest will be the situation at LOCAL/Lionbridge Technologies where the collective bargaining is on going: at the last meeting, on February 27, LOCAl/Lionbridge Technologies had refused to provide any paid time off of any sort (see pages 8 and 9 of their contract proposal).
Microsoft's announcement changes the story of The Other Microsoft that will need at least one new chapter to take it into account and tell what's next to come.
We'll bring those changes into the book as fast as possible but until we are able to do so we'll keep you up to date on this blog.
Paid time off matters: Ensuring minimum standards for the people at our suppliers
Posted
We believe paid time off is an important benefit for workers in our
economy. Today we’re announcing that over the next year we will make
changes to ensure that a wide variety of suppliers that do business with
Microsoft in the U.S. provide their employees who handle our work with
at least 15 days of paid leave each year.
We’re publishing this blog today to share information both on what we’re doing and why we’ve decided to take this step.
What We’re Doing. Let me share the most significant aspects of what we’ve decided to do:
We’re committed to working with our suppliers to understand the impact of this change on them and pursue the best approach to implement this well. We’re not aware of any large company that has taken the approach that we’re launching today, so we want to be thoughtful and well-informed about our implementation of this step. We don’t want to make changes that undermine the breadth and diversity of our suppliers. For example women/minority owned businesses account for over $2 billion of our supplier services in the U.S. We also want to be sensitive to the needs of small businesses. For these reasons, we are going to launch a broad consultation process with our suppliers so we can solicit feedback and learn from them about the best way to phase in the specific details. We’re committed to the direction that we’ve set, but focused on learning as much as we can about how to implement this effectively.
Why We’re Doing This. Over the past year there has been increasing debate about income inequality and the challenges facing working people and families. While this is often discussed as a general topic, at times individuals have raised pertinent questions for companies in the tech sector, including Microsoft. This has led us to step back and think anew about the types of benefits policies we want to have with our suppliers.
As we’ve studied the issue, we’ve reached a couple of conclusions:
We then thought about this in the context of the broader supplier relationships on which we rely. Like many companies in many industries in the United States, we rely on a wide variety of other companies that supply us with goods and services that reflect their core competencies. From building maintenance to management consulting and campus security to software localization, we rely on a large group of outside companies to do what they do best. The people who work for our suppliers are critical to our success and we want them to have the benefit of paid time off.
By taking this new step, we will focus our resources on doing business with companies that share a commitment to providing these types of strong benefits for employees.
In sum, we concluded that this is the right step for our business. We also hope that our experience – and especially the feedback we receive from our suppliers – will be valuable to others considering similar changes. Our goal is to make this change in a thoughtful way and to share our experiences with those who are interested.
We’re publishing this blog today to share information both on what we’re doing and why we’ve decided to take this step.
What We’re Doing. Let me share the most significant aspects of what we’ve decided to do:
- First, we’re focusing on ensuring a minimum of 15 days of annual paid time off for the eligible employees at our suppliers, either through 10 days of paid vacation and five days of paid sick leave or through 15 days of unrestricted paid time off.
- Second, this new benefits minimum will apply to suppliers with 50 or more employees in the United States. It will apply to their U.S. employees who have worked for them for more than nine months (1500 hours) and who perform substantial work for Microsoft. We recognize that this approach will not reach all employees at all of our suppliers, but it will apply to a great many.
- Third, because we recognize that this approach may increase the costs for some of our suppliers, our plan is to work with them to implement these changes over the next twelve months. We appreciate that this may ultimately result in increased costs for Microsoft, and we’ll put a process in place for addressing these issues with our suppliers.
We’re committed to working with our suppliers to understand the impact of this change on them and pursue the best approach to implement this well. We’re not aware of any large company that has taken the approach that we’re launching today, so we want to be thoughtful and well-informed about our implementation of this step. We don’t want to make changes that undermine the breadth and diversity of our suppliers. For example women/minority owned businesses account for over $2 billion of our supplier services in the U.S. We also want to be sensitive to the needs of small businesses. For these reasons, we are going to launch a broad consultation process with our suppliers so we can solicit feedback and learn from them about the best way to phase in the specific details. We’re committed to the direction that we’ve set, but focused on learning as much as we can about how to implement this effectively.
Why We’re Doing This. Over the past year there has been increasing debate about income inequality and the challenges facing working people and families. While this is often discussed as a general topic, at times individuals have raised pertinent questions for companies in the tech sector, including Microsoft. This has led us to step back and think anew about the types of benefits policies we want to have with our suppliers.
As we’ve studied the issue, we’ve reached a couple of conclusions:
- First, paid time off benefits both employers and employees by contributing to a happier and more productive workforce. Research shows paid time off contributes to the health and well-being of workers and their families, strengthens family ties, increases productivity, improves retention, and lowers health-care costs. In addition, as a University of Pittsburgh study recently concluded, paid sick leave contributes to the health of one’s colleagues. As the study found, one flu day reduced on-the-job transmission by 25 percent, while two flu days reduced such transmissions by 39 percent.
- Second, the lack of paid time off disproportionately impacts low-wage earners. While estimates vary, the overall trend is clear. As one study found, only 49 percent of those in the bottom fourth of earners get paid time off, compared with almost 90 percent among the top quarter of earners. Lack of paid time off also has a disproportionate impact on minorities at a time when the tech sector needs to do a better job of promoting diversity.
We then thought about this in the context of the broader supplier relationships on which we rely. Like many companies in many industries in the United States, we rely on a wide variety of other companies that supply us with goods and services that reflect their core competencies. From building maintenance to management consulting and campus security to software localization, we rely on a large group of outside companies to do what they do best. The people who work for our suppliers are critical to our success and we want them to have the benefit of paid time off.
By taking this new step, we will focus our resources on doing business with companies that share a commitment to providing these types of strong benefits for employees.
In sum, we concluded that this is the right step for our business. We also hope that our experience – and especially the feedback we receive from our suppliers – will be valuable to others considering similar changes. Our goal is to make this change in a thoughtful way and to share our experiences with those who are interested.
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