Despite offering such a comprehensive benefits plan, Microsoft has not always been in compliance with laws governing these plans. In the case Vizcaino v. Microsoft Corporation the court ruled that the company denied some of its workers benefits under its Savings plus 401(k) plan (SPP) and Employee Stock Purchase Plan (ESPP) based on the mistaken assumption that they were independent contractors and therefore not eligible for its benefits.
Even though these workers were originally hired on the basis of being independent contractors, for tax purposes the IRS reclassified them as being Microsoft employees. Due to this reclassification the workers requested eligibility for the SPP and ESPP benefits, of which they were subsequently denied. After initially losing the case at the District Court level the plaintiffs appealed, which led to the Oct. 3, 1996 Ninth Circuit Court panel ruling in favor of the plaintiffs. Microsoft requested for this ruling to be reviewed by the Ninth Circuit, which led to a reaffirmation of the panel's earlier decision.
Through its review the court found that the workers could not be considered independent contractors while working for Microsoft. In addition the court found that by law eligibility in the SPP plan could be determined if workers were paid from Microsoft's United States accounts, which they were. As for the ESPP plan the court found that the company always offered it to all employees, and that these particular workers had accepted it earlier.
References
Benefits at Microsoft/Our Benefits Plan." (2007). Microsoft Careers Website. http://members.microsoft.com/careers/mslife/benefits/plan.mspx (Accessed April 20, 2007).
Wilson Sonsini Goodrich & Rosati. (1998). "Employee benefits & compensation updates: Vizcaino v. Microsoft Corporation." Findlaw Website. http://library.findlaw.com/1998/Jan/1/127436.html (Accessed April 20, 2007).
