Microsoft agrees to $14 million California pay discrimination settlement

Microsoft is set to pay $14.4 million to resolve a case alleging retaliatory and discriminatory practices against California workers who took protected leave, such as family care, parental, disability and pregnancy leave. The Civil Rights Department of California (CRD) launched an investigation into Microsoft in 2020, looking into whether the tech giant violated laws such as California's Fair Employment and Housing Act and the Americans with Disabilities Act. The proposed agreement is subject to court approval. 

CRD claimed that workers who took protected leave "received lower bonuses and unfavorable performance reviews that, in turn, harmed their eligibility for merit increases, stock awards, and promotions." The California Department also alleged that Microsoft "failed to take sufficient action to prevent discrimination from occurring, altering the career trajectory of women, people with disabilities, and other employees who worked at the company, ultimately leaving them behind."

Microsoft's payment will go toward workers impacted from May 2017 until the date of the court's approval. The company must also retain an independent consultant for policy and practice recommendations, ensuring that managers don't use protected leave as a determinant when deciding rewards and promotions — managers and HR will need to undergo specific discrimination training. The independent consultant will also work with Microsoft to confirm that employees have a straightforward method to raise complaints if they feel taking protected leave has influenced their standing in the company. Furthermore, the independent consultant must provide an annual compliance report reflecting Microsoft's following of the agreement.  

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

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