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In a respite to low-wage earners, and a bid towards healthier workforces, Microsoft has announced a new policy mandating at least 15 days of paid leave each year for its US suppliers.
The leave, to be availed either through 10 days of paid vacation and five days of paid sick leave or through 15 days of unrestricted paid time off, will apply to suppliers with 50 or more employees in the US.
Employees who have worked at the supplier for more than nine months (1,500 hours), and who perform substantial work for Microsoft will qualify for the new benefit.
Given the cost implications of the new policy, Microsoft’s general counsel and EVP (legal and corporate affairs, Brad Smith, has said the company will work with suppliers to implement these changes over twelve months.
“We want to be clear. Many of our suppliers already offer strong benefits packages for their employees, including paid time off,” he explained.
“We’re not aware of any large company that has taken the approach that we’re launching today, so we want to be thoughtful and well-informed about our implementation of this step.”
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He stated that the past year has seen increasing debate about income inequality and the challenges facing working people and families.
As a result, one of Microsoft’s conclusions is that paid time off benefits both employers and employees, by contributing to a happier and more productive workforce.
He cited a University of Pittsburgh study, which found one flu day can reduce on-the-job transmission of the virus by 25%, while two flu days can reduce such transmissions by 39%.
He also made a case for low-wage earners, saying only 49% of those in the bottom fourth of earners get paid time off, compared with almost 90% among the top quarter of earners.
“The people who work for our suppliers are critical to our success and we want them to have the benefit of paid time off,” he added.