Microsoft Contractors Cut Again

On Monday March 2, 2009, Microsoft contractors were notified of an across the board 10% pay cut, 15% for new contracts. On the same day, Microsoft contractor, Philip Palios sent word to about five-hundred fellow Microsoft contractors that he was planning a peaceful protest starting the same day.

Protesters are to gather on the corner of 156th Ave. and NE 40th St. from 6pm-8pm every day. As of right now, the plan is to do this through March 13.

"I will be there every day, I hope you will too...but even just showing up one of the days is helpful and is a strong symbol of our concerns," wrote Palios.

While it seems completely conceivable that this mass pay cut is just another result of tough economic times, contractors are viewing this act as a boondoggle rather than necessary armament against a struggling economy.

While the 10- 15% pay cut is an amount agreed upon between Microsoft and its contracting agencies such as Volt Workforce Solutions- through which Palios is employed- many of these agencies are attempting to pass their loss off to its employees as a pay cut.

An email sent by Volt Monday morning to its employees contained a paragraph and a half long epilogue discussing the "considerable turmoil" of the present economy before going on to explain that they plan to "participate in some key cost containment initiatives."

"If you feel this is unfair and a breach of contract, as I do, I encourage you not to agree to these new contract terms. By uniting as valuable people who work at Microsoft we can show our concern and force an alternate course of action," said Palios in an address to fellow Microsoft contractors.

Volt distributed an addendum to employee contracts requesting that all contractors lend their signatures by the close of business Tuesday, March 3. "Before we lawyer up," as an anonymous Volt employee put it.

Tacoma labor attorney James Beck termed the rush in getting the addendum agreed to and signed in such a short amount of time suspicious.

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"Generally if you're given a contract that's enforceable you're going to have to provide something else, a return, to support the change in the contract," added Beck.

"We have evaluated all pay rates for our Microsoft agency temporary workers and have concluded that we will be asking each of you to share in these measures by accepting a 10% reduction in your pay rate," read the request Monday morning. One might question how there is reciprocal "sharing" when the entire burden of the cut is being pushed onto the shoulders of contractors, which translates into zero loss for the contracting agency.

Microsoft has a legacy of being poised securely at the cusp between the present and the future of technology. It has another legacy, though mostly unknown except to insiders, of their less-than-equal treatment of contractors.

Microsoft is not alone in being guilty of contractors being taken advantage of.

IT consulting firms across the region have been taking similar actions against contractors. Just before the holidays Neudesic, a Bellevue technology solutions company, retracted half of the money promised in the form of bonuses in the original contracts.

The IT industry is notorious for middle men taking huge percentages of the contractor's billing rate, as well as for dropping employees the minute they're not billable. Many industries have standardized rates as to what a middle man can take off the top. The entertainment industry, as an example, allows an agent to take a standard ten percent of the client's billing rate.

Beck named the lack of central organization, a factor present for Boeing workers for example, as a possibility as to why IT workers are not unionized.

The following weeks will show whether IT workers in tough economic times will organize or fold.