Microsoft to Begin Disclosing Salaries, Drops Non-Compete Clauses
(Photo: Efes, Wikimedia Commons)Microsoft has announced a raft of beneficial new employment policies. The biggest change is it will begin divulging salary ranges for open positions. Microsoft isn’t being benevolent — this will be required by Washington state law starting in 2023. However, the company has also announced three other changes to its employment policies. Given the competitive nature of the tech market, it might just spur other companies to do likewise.
The new salary disclosure policy is a huge deal, and makes Microsoft the first “Big Tech” company to take this approach. In its announcement of the new policies, Microsoft said it’s part of the company’s commitment to “pay transparency.” The company says starting in January 2023, it will “publicly disclose salary ranges in all of our internal and external job postings across the U.S.” It adds a reminder that it had also stopped asking potential employees for salary histories “several years ago.” This is the result of a new bill that was passed in March of 2022. The bill requires any company in Washington state with 15 or more employees to disclose a salary range for open positions. It also requires companies to list other benefits that are included. It modifies existing law that says companies only have to disclose the minimum wage once an offer has been made.
Microsoft is also doing away with non-compete clauses and will cease enforcing existing clauses as well. It says going forward, “U.S. employees will not be restricted by a noncompete clause in seeking employment with another company who may be considered a Microsoft competitor.” This clause does not apply to senior leadership and executives, however. Microsoft says it made the decision based on “concerns” it heard that the policy was “at odds with our talent principles.”
Microsoft also has included non-disclosure agreements (NDA) as part of a separation with certain employees. This requires them to not disclose certain events surrounding the termination of their employment. That’s also going on the ash heap of history, starting immediately. The company says “Microsoft’s U.S. settlement and separation agreements no longer include confidentiality language that prohibits workers from disclosing alleged conduct that they perceive is illegal discrimination, harassment, retaliation, sexual assault, or a wage and hour violation occurring in the workplace.”
Finally, the company also says it will launch a “civil rights audit” of its workforce policies. The audit will be conducted by a third party, and will be completed some time next year.
Microsoft says these new policies are part of its “listen first” philosophy. Although its statement has the usual PR speak about unlocking innovation and yada yada, these are all good changes. Since Microsoft competes so heavily with neighboring Amazon and other tech heavyweights, it’ll be interesting to see if any of them follow suit. Even if a company like Google doesn’t copy Microsoft, by publishing its salaries it’ll give workers in those fields a better understanding of where the market is at least. This could further incentivize competitors to compete directly by showing their salaries are bigger, or that it offers better benefits.