Microsoft Changes Policy for Contractors

In what it said was a response to lawsuits and a restructuring, Microsoft Corp. will soon require its long-term contract workers to take a 100-day hiatus -- an increase from 31 days -- after one year of full-time employment at the company.

The policy isn't groundbreaking -- other high-tech firms already have such regulations -- but some observers questioned Microsoft's motives. The policy will take effect July 1 and will force some 6,000 so-called "permatemps" to periodically find other work or seek permanent positions at the company.

Microsoft spokesman Dan Leach said the company is sorry it had to take the step, knowing it will affect people who choose multiple assignments at the firm. "Our goal is to make sure we are turning to temporary staffing (in an appropriate manner)," said Leach.

Microsoft lost one round of its battle with the permatemps last month, when the U.S. Supreme Court let stand a decision by the 9th U.S. Circuit Court of Appeals in San Francisco. The decision said Microsoft must open its discounted stock-purchase policy to as many as 10,000 temporary employees who had worked at the company for at least five months in any 12-month period.

Also pending is a ruling in a separate lawsuit, filed by Seattle-based law firm Bendich, Stobaugh & Strong in 1998, addressing temporary employees' eligibility for health and retirement benefits. Attorney Stephen Strong said he wasn't impressed with the new policy.

"It's unclear to me to whom this policy applies. But if (Microsoft) is taking long-term employees and firing them for 100 days to avoid paying full benefits, then it violates state and federal law," Strong said.

Mike Blain, a former Microsoft contract worker and co-founder of The Washington Alliance of Technology Workers, said the policy doesn't provide Microsoft workers with any meaningful voice on the job. He said his organization will continue to organize contract workers and other Microsoft employees.

Response is mixed, according to information posted on the alliance's Web site. While some permatemps say the move is good because it may force Microsoft to hire people on a regular full-time basis, others say Microsoft is using every legal loophole to avoid calling its workers "employees" and paying benefits.

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