SEATTLE — For the first time, Microsoft will mandate a basic level of benefits for the tens of thousands of contract workers employed on the software giant’s behalf.
During the next 12 months, the company will require its U.S. suppliers — which provide workers who do everything from serving food and driving buses to testing software — to give 15 days paid leave a year to their employees who work on Microsoft projects.
Previously, Microsoft required only that its vendors comply with labor laws.
“This kind of step is good for people and good for business,” said Brad Smith, Microsoft’s general counsel. “It seemed to be the single biggest step that we could take that would have the biggest impact” on the well-being of the company’s contractors, he said.
The status of contractors and temporary workers has come into the spotlight as part of national debates on income inequality and what responsibility thriving U.S. technology companies have to their lowest-paid workers.
In response to questions about a unionization drive among a group of contractors, Microsoft said in January the company was considering changes to its vendor policy with an eye toward improving working conditions for contractors.
Microsoft directly employs about 41,000 people in Washington state, chiefly at its Redmond campus and offices in Bellevue and Seattle, as well as 17,500 elsewhere in the U.S. But the company, with 122,000 employees worldwide, has a much more expansive footprint.
Contractors working on Microsoft projects are said to number in the tens of thousands at any one time. The company doesn’t release a tally, and Smith, in an interview, didn’t have one.
But a 2009 review of figures from internal software used to track human-resources information indicated Microsoft then was making use of the services of about 80,000 contract workers of various types in addition to its regular, full-time workforce.
It’s also unclear how many people will be affected by the new policy, which applies to Microsoft vendors with 50 or more employees. The requirement covers workers who have been employed by the contractor for more than nine months and who do “substantial” work at Microsoft.
The time off can be broken up between 10 days of paid vacation and 5 days of sick leave, or 15 unrestricted days off, Smith said.
He emphasized that many Microsoft contractors already have paid time off. After all, the contractor label includes high-priced consultants and marketing advisers who often have generous benefits packages.
Philippe Boucher, who is employed by Lionbridge Technologies to work on Microsoft’s campus vetting the content of Windows applications, in 2014 helped lead a group of workers in a rare unionization push for better benefits and wages.
Boucher, who has worked for Lionbridge for more than three years, draws a $22-an-hour wage with no paid time off. The Temporary Workers of America, chartered in a federally overseen vote in September, is now in talks with Lionbridge’s lawyers on contract terms.
Boucher self-published a book on his and his colleagues’ experience and keeps a blog chronicling the contract talks.
“We definitely read what they wrote, and it helped prompt our thinking and our desire to learn more,” Smith said.
Microsoft has had an occasionally testy relationship with its contract workers. A group of temporary workers sued in the late 1990s, arguing they were unfairly excluded from the stock options and other benefits then awarded to permanent employees. The company ended the litigation with a $97 million settlement among about 8,000 workers and pledged policy tweaks to keep workers from remaining in limbo for years.
Since then, attention to vendor policies in Big Tech has occasionally focused on working conditions at the Asian factories churning out iPhones or Xboxes.
Greater awareness of increasing income inequality, coupled with a startup boom that’s minting millionaires at a pace reminiscent of the dot-com bubble, has shifted attention to the corporate residents of cities like San Francisco and Seattle.
President Barack Obama this year has voiced support for a law to mandate paid sick leave. A bill being considered in the Washington Legislature would do the same.
“People are asking themselves questions that weren’t part of the conversation five or even two years ago,” Smith said.
Adding benefits may raise costs for some Microsoft vendors and, in turn, the company itself. Microsoft will work with its vendors to address that as the policy is deployed in the next year, Smith said.
Microsoft officials began discussing the shift in vendor policy in December, Smith said. The company in January started seeking out other large U.S. companies that have publicly pursued similar policies, and wasn’t able to find any, he said.
Some of Microsoft’s peers in Silicon Valley have taken other steps to shift their vendor policies.
Apple this month said it would transition much of its campus security workforce from contractors to full time. Google, which made a similar move last year, recently ordered its shuttle-bus contractors to give their employees a raise.
A unionization push among bus drivers in Silicon Valley has seen the drivers who shuttle employees of Facebook, Yahoo, eBay and others opt to join the Teamsters. The drivers of the Connector, Microsoft’s contractor-operated shuttle bus service, are represented by the Communications Workers of America.