Microsoft Will Require Suppliers – Including Some Small Businesses – to Provide Paid Parental Leave

Larger Microsoft Suppliers Must Offer Paid Parental Leave

The support for parental leave is gaining steam in the US, especially with millennials who seek a work/life balance in their lives. Building on a 2015 announcement, Microsoft (NASDAQ: MSFT) says it will require more of its suppliers within the US to provide paid parental leave for their employees.

Larger Microsoft Suppliers Must Offer Paid Parental Leave

In 2015 Microsoft started this process by requiring its suppliers to provide a minimum of 15 days of paid leave each year. The directive applied to suppliers with 50 or more employees in the United States and was required for employees who had worked for more than nine months (1500 hours).

According to Microsoft, the new directive will include many small businesses owned by women and minorities, which account for more than $2 billion of business in the US.

Paying for parental or any other type of paid leave is a great recruiting tool for new employees and an important enticement for existing employees to stay with any organization. As the job market continues to tighten, these incentives will be even more significant.

On the official Microsoft blog, Corporate Vice President and General Counsel Dev Stahlkopf explains why the company is expanding on the 2015 initiative. Stahlkopf says, “Paid time off is good both for employers and employees, and it was the right step for our business.”

As it applies to parental leave he adds, “Studies show that paid parental leave enriches the lives of families.  Women who take paid maternity leave are more likely to be in the workforce a year later and earn more than mothers who do not receive paid time off. Employers who offer paid time off for new mothers experience improved productivity, higher morale, and lower turnover rates.”

The New Requirements

Microsoft says it is going to be working with its US suppliers over the next 12 months to implement the new expanded paid parental leave policy.

Under the new policy, suppliers will be required to provide 12 weeks paid parental leave of up to $1,000 per week. The changes will apply to parents employed by Microsoft suppliers who take time off for the birth or adoption of a child.

The policy still applies to suppliers with more than 50 employees who perform a considerable amount of work for Microsoft.

What is a Microsoft Supplier?

The Microsoft Supplier Program (MSP) is used by the company to find preferred and prequalified groups of suppliers around the world.

The companies are invited to the MSP program after they have been vetted and show they meet Microsoft Compliance through its category certification process.

Benefits of Parental Leave

Offering extended parental leave and other similar benefits may not always be an option for small businesses, but with some creative thinking, there are now more tools and resources to make it possible.

Small business owners can use freelancers and remote workers to save on the cost of hiring a replacement for temporary help. This eliminates the need to provide insurance, benefits and other costs associated with having a temporary employee on premises.

Your efforts will translate into keeping your most valued employees longer including all the benefits this will give your organization. The result will be a happier staff you can trust to run your company as you look to expand with a new location or other ventures.

Photo via Shutterstock

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Michael Guta Michael Guta is the Assistant Editor at Small Business Trends and currently manages its East African editorial team. Michael brings with him many years of content experience in the digital ecosystem covering a wide range of industries. He holds a B.S. in Information Communication Technology, with an emphasis in Technology Management.

2 Reactions
  1. Cool idea and I like that it’s coming from industry and not the government. Then companies, when choosing to become a Microsoft partner, can know the “cost” upfront and balance it with their pricing. Then it becomes a business decision not a regulation.

  2. I guess they are now focusing more on productivity. It is more than just keeping your employees sane and fulfilled. It is also about driving motivation up.