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Microsoft has agreed to pay a $14.4million settlement over claims from the California Civil Rights Department (CRD) that it penalized workers for taking protected forms of leave.
The settlement also requires Microsoft to provide training to managers and its HR teams to prevent future discrimination.
The CRD alleged that since 2017, Microsoft had discriminated and retaliated against employees based in California who took parental, disability, pregnancy, and family care leave.
The filing accused Microsoft of suppressing workers' raises, promotions, and bonuses, with employees who took protected leave reportedly receiving unfairly poor performance reviews.
As a part of the settlement, Microsoft will implement an independent consultant whose role will be to ensure employees who take protected leave are not being discriminated against by unfair policies; to provide training for people managers and HR personnel; and to give staff a safe channel to raise complaints.
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Penalizing workers for taking parental, disability, pregnancy, or family care leave is illegal under California state law and federal law.
The agency argued that workers who took the leave received lower scores in performance reviews than counterparts who did not.
This led to fewer promotion opportunities, pay-rises, and stock awards, and stunted career development, the CRD claimed.
According to the agency, this amounted to sex and disability discrimination and infringed upon the rights of workers to take leave free from retaliation.
If the settlement is approved by a state judge, workers would be entitled to monetary relief through a share of the $14.4million settlement, but it is not clear exactly how many individuals could be eligible.
Microsoft has also committed to taking steps to prevent future discrimination, though in a statement said it disagrees with the CRD, denying their allegations and any wrongdoing.
“Microsoft is committed to an environment that empowers our employees to take leave when needed and provides the flexibility and support necessary for them to thrive professionally and personally," a spokesperson said in a statement.
In a statement, Kevin Kish, Director of the Civil Rights Department hailed the settlement and Microsoft’s agreement to make changes after its past failures.
"The settlement announced today will provide direct relief to impacted workers and safeguard against future discrimination at the company," Kish said.
“We applaud Microsoft for coming to the table and agreeing to make the changes necessary to protect workers in California.”
