The tech giant is giving its 1,000-plus U.S.-based suppliers 12 weeks of paid leave, following companies like IBM, Facebook, Netflix, American Express and Etsy
Microsoft is the latest tech giant to boost its parental leave benefits — for its cafeteria workers and custodians as well as its developers.
The Redmond, Wash.-based company announced on Thursday that it is working with its 1,000-plus U.S. suppliers over the next year to implement a minimum of 12 weeks paid parental leave, up to $1,000 a week, for the birth or adoption of a child. The benefit was inspired by Washington state’s generous paid parental and sick leave plan going into effect in 2020, which grants 12 paid weeks of parental leave for employees upon the birth or adoption of a child, plus another two weeks for complicated pregnancies.
“As we looked at this legislation, however, we realized that while it will benefit the employees of our suppliers in Washington state, it will leave thousands of valued contributors outside of Washington behind. So, we made a decision to apply Washington’s parental leave requirement more broadly, and not to wait until 2020 to begin implementation,” wrote Microsoft vice president and general counsel Dev Stahlkopf in a blog post. (The company has yet to respond to Moneyish requests for comment.)
The new policy applies to suppliers with more than 50 employees, and covers supplier employees who perform substantial work for Microsoft, the post explained. And these workers are guaranteed up to 66% of their wages, up to $1,000 a week — unless local laws require a more generous leave package, in which case the Microsoft suppliers will need to meet that offer. This adds to the parental leave policy for employees that Microsoft announced in 2015, which offers 12 weeks of 100% paid parental leave for new parents — which is in addition to the eight weeks of paid maternity disability leave that new mothers receive, meaning Microsoft moms can take a total of 20 weeks of fully paid leave if they choose.
Microsoft joins big tech companies like IBM in continuing to expand paid parental leave benefits to employees. IBM announced last October that it is now offering 20 weeks of paid maternity leave — up from a previous 14 weeks — to new moms employed by the tech giant. Dads, partners and adoptive parents who initially got six weeks, will now receive double that, with 12 paid weeks off.
IBM also gives employees a reimbursement of up to $20,000 for expenses related to surrogacy or adoption for straight and same-sex parents, an increase from the initial $5,000 offered for just adoptions. The new reimbursement is available to workers even if their efforts at becoming parents are unsuccessful, so that employees can pursue parenthood without depleting their savings, IBM’s vice president of benefits Barbara Brickmeier said, noting that the new benefits reflect the company’s understanding that “no one size fits all.”
“We have a general approach of wanting to meet employees where they are,” Brickmeier told Fortune. “People are forming families in various ways.”
Individual companies are stepping up because the U.S. as a whole consistently ranks at the bottom, benefits-wise, in comparison to other countries, particularly those in Europe, that offer paid parental leave programs that make life much easier for new parents. In Finland, for example, mothers can start their maternity leave seven weeks before their due date. After that, the government covers an additional 16 weeks of paid leave. New moms in Denmark get a total of 18 weeks, and new parents in Sweden get 480 days of leave at 80% of their normal pay.
Yet in the US, workers can take 12 weeks of unpaid, protected job leave, which many families can’t afford to take. Paid parental leave is only available to about 13% of Americans working in the private sector, according to the Bureau of Labor Statistics, which plummets to just 7% to 8% percent of workers in service and maintenance jobs — which is what makes Microsoft’s move to cover its suppliers such a big deal.
“The case for paid parental leave is clear,” Stahlkopf added in his post. “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. And, paid parental leave is not solely a benefit for women. Data from California’s paid family leave program shows that men take paternity leave at twice the rate and for longer periods of time when the leave is paid. This increased bonding and time spent caring for young children is correlated with positive outcomes such as higher test scores for these children.”
And in recent years, some more U.S. companies have made an effort to improve their employee benefit policies. Facebook currently offers four months of paid leave for new parents, moms and dads alike. Netflix has 12 months of paid parental leave that employees can use at their own discretion, giving pregnant staffers and their spouses the ability to better manage the work-life balance of starting a family. American Express introduced a new policy in 2016 that gives men and women 20 weeks of paid leave upon the arrival of a new child, and as much as $35,000 for adoption and surrogacy options. And online marketplace Etsy launched a gender-neutral parental leave policy giving new parents 26 weeks of paid leave they can use within two years of welcoming a new child.
The recent Congressional tax overhaul has also spurred more business chains to give hourly workers paid leave benefits. CVS’s full-time employees now qualify for up to four weeks of paid parental leave, for example, and Walmart’s full-time hourly associates also receive 10 weeks of paid maternity leave and six weeks of paid parental leave.
Research suggests that paid maternity leave leads to better health for mothers and babies; lower rates of postpartum depression and newborn and infant mortality; and higher rates of breastfeeding and child immunizations. Working women who received 12 weeks or more of paid maternity leave were more likely to start breastfeeding their baby and continue to breastfeed for at least six months — the recommended time frame by the American Academy of Pediatrics – than women who did not get any paid leave, a study published in the Centers for Disease Control and Prevention found.
Paid leave also encourages female employees to stay at their jobs longer. A study from 2011 found that when California became the first state to offer paid leave, new mothers were more likely to return to work. Between one and three years later, moms of small children were working more and at higher salaries.
This article was originally published in October 2017, and has been updated with Microsoft’s new parental leave policy and new paid leave data.
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