Microsoft agreed to pay California a $14.4 million fine and committed to reviewing its leave policy moving forward after the civil rights department accused the company of employee retaliation against protected time off since 2017.
Microsoft's Settlement with California's Civil Rights Department
According to CNBC, California's Civil Rights Department announced the proposed settlement with Microsoft on Wednesday. The settlement demands a $14.4 million fine for denying raises, promotions, and stock awards to employees who used parental, family care-taking, or disability leave.
The tech giant based in Redmond, Washington, houses approximately 6,700 individuals in California, as per the complaint. Out of its 221,000 workforce, the representation of women comprises 31.2% of the total workforce in 2023, which is a rise from 27.6% in 2019, as per the company's latest diversity report.
The complaint alleges that the discriminated workers who received lower performance-review scores were predominantly women and individuals with disabilities, affecting their pay, opportunities for promotions, and altering their career paths.
Microsoft's Discriminatory Workplace Culture
According to legal filings, the agency's three-year investigation revealed that Microsoft's workplace culture discourages employees from taking advantage of protected leave, with managers making negative comments when employees exercise their rights.
The state agency asserted that Microsoft's policies and practices disproportionately affect women and people with disabilities who use or will use protected leave, which have a discriminatory adverse impact based on sex and disability that Microsoft cannot justify on the grounds of business necessity.
In an email statement to Yahoo Finance, a Microsoft spokesperson reiterated the company's dedication to fostering an environment where employees can take leave and receive the necessary support for their professional and personal development. Despite disagreeing with the agency's allegations, Microsoft committed to listening, learning, and supporting its employees.
Holding Microsoft Accountable for The Discrimination
Yahoo Finance reported that Kevin Kish, director of the Civil Rights Department, said the settlement would offer direct relief to affected workers and help prevent future discrimination within the company.
Microsoft employees affected from May 2017 until the court's judgment will receive compensation from a $14.4 million settlement fund, while the rest of the settlement will support the agency's enforcement initiatives.
Under the proposed settlement, Microsoft will engage an independent consultant to assess and recommend improvements to the company's practices regarding annual rewards and promotions for workers, implement measures to ensure that employees are aware of procedures for lodging discrimination complaints, and will be obligated to report its findings to the department overseeing the settlement.
Civil Rights Department Protecting Workers' Rights
In recent years, the state's Civil Rights Department has announced several substantial settlements, primarily in sex discrimination cases. These include a $100 million agreement with video game maker Riot Games in 2021, a $54 million settlement with Activision Blizzard last year, and a $15 million settlement with Snapchat parent Snap announced last month, The Express Tribune reported.
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