Microsoft is no stranger to paying settlement charges for practices it shouldn't be doing. After being accused of treating employees unfairly for protected leave, the company will have to pay $14 million for the affected staff.
Microsoft Accused of Pay Discrimination
Its California workers claim that the company has been discriminating and retaliating against those who took protected leave such as pregnancy, parental, family care, and disability leave, and the court is siding with the employees.
The Civil Rights Department of California stepped in and launched an investigation regarding the matter in 2020, specifically if it violated California's Fair Employment and Housing Act and the Americans with Disabilities Act, as per Engadget.
It was then found that workers who took protected leaves received lower bonuses and were given bad performance reviews, which affected their eligibility for merit increases, stock awards, and promotions. In all the accusations, Microsoft failed to resolve the issue.
CRD claimed that the company "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."
The settlement charge of $14.4 million will be divided among the impacted workers between May 2017 and the date of the court's approval. Microsoft will also have to take other measures to make sure that the practice doesn't happen again.
On top of hiring an independent consultant for policy and practice recommendations to make sure that managers refrain from any discriminatory consequences, managers and HR will have to go through specific discrimination training as well.
The independent consultant will also work with the company to make sure that employees have an easier way to raise complaints, particularly if their protected leave has impacted their opportunities at work.
Civil Rights Department of California Director Kevin Kirsh said in a statement: "We applaud Microsoft for coming to the table and agreeing to make the changes necessary to protect workers in California.
Penalty for Violations of Children's Privacy Laws
As reported by the Office of Public Affairs on June 12, 2023, Microsoft has also agreed to pay $20 million in civil penalties. The company is said to be collecting and retaining personal information from children who use Microsoft's Xbox Live service.
In the press release, it states that Microsoft was aware that certain users were children but still continued to collect personal information like telephone numbers, all without notifying the parents of the practice or obtaining parental consent.
Principal Deputy Assistant Attorney General Brian Boynton said "It is essential that before collecting children's personal information, online companies provide complete and timely disclosures about their information collection practices so that parents can make informed decisions."
The settlement will also require Microsoft to clearly communicate with parents about their children's data. Furthermore, a procedure will be set up to monitor whether Microsoft is complying with the new statutes.
"Our proposed order makes it easier for parents to protect their children's privacy on Xbox, and limits what information Microsoft can collect and retain about kids," FTC's Bureau of Consumer Protection Director Samuel Levine stated.
