Microsoft agrees to $14 million settlement over wage discrimination in California

Microsoft must pay $14.4 million to settle a case alleging retaliation and discrimination against California workers who took protected leave, such as family care, parental, disability or pregnancy leave. The Civil Rights Department of California (CRD) launched an investigation into Microsoft in 2020 to examine whether the tech giant violated laws such as California's Fair Employment and Housing Act and the Americans with Disabilities Act. The proposed settlement still needs court approval.

CRD alleged that workers who took protected leave “received lower bonuses and unfavorable performance evaluations, which in turn affected their eligibility for merit increases, stock awards, and promotions.” The California department also alleged that Microsoft “failed to take adequate steps to prevent discrimination, thereby altering the career opportunities of, and ultimately excluding, women, people with disabilities, and other employees who worked at the company.”

Microsoft's payment will go to affected employees from May 2017 until the date of court approval. The company must also retain an independent consultant for policy and practice recommendations to ensure that managers do not use protected leave as a deciding factor in rewards and promotions – managers and HR must complete special training on discrimination. The independent consultant will also work with Microsoft to ensure that employees have a straightforward method to raise complaints if they feel that using protected leave has affected their position with the company. In addition, the independent consultant must provide an annual compliance report reflecting Microsoft's compliance with the agreement.

“The settlement announced today will provide immediate relief to affected workers and protect them from future discrimination at the company,” said Kevin Kirsh, director of the CRD. “We welcome Microsoft coming to the bargaining table and agreeing to make the necessary changes to protect California workers.”