Microsoft Settles California Pay Discrimination Case for $14.4 Million

Microsoft has agreed to a $14.4 million settlement to address allegations of retaliation and discrimination against California employees who took protected leave, including family care, parental, disability, and pregnancy leave. The California Civil Rights Department (CRD) began investigating Microsoft in 2020 to determine if the company breached laws such as California's Fair Employment and Housing Act and the Americans with Disabilities Act. This settlement awaits court approval.

According to CRD, employees who utilized protected leave faced lower bonuses and adverse performance reviews, negatively affecting their eligibility for merit increases, stock awards, and promotions. The department also accused Microsoft of insufficient action to prevent discrimination, impacting the career advancement of women, people with disabilities, and other employees, leaving them disadvantaged.

The settlement will benefit employees affected from May 2017 until the court approves the agreement. Microsoft will also hire an independent consultant to review and recommend policies, ensuring that managers do not consider protected leave when deciding rewards and promotions. Managers and HR will receive specialized discrimination training. Additionally, the consultant will help Microsoft establish a clear process for employees to report if they believe their protected leave has affected their standing in the company. The consultant will provide an annual compliance report on Microsoft's adherence to the agreement.

"The settlement announced today will provide direct relief to impacted workers and safeguard against future discrimination at the company," said Kevin Kirsh, CRD's director. "We commend Microsoft for agreeing to implement the necessary changes to protect workers in California."