I dont know why I didn't recall this earlier, but I'm positive this is the reason for their 18 months on 6 months off policy. They were sued over the status of employees versus contractors and they settled out of court in 2000. There was likely similar events going on again later so were forced to make company wide changes in 2014.
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https://www.geekwire.com/2014/inter...al-staff-18-months-requiring-six-month-break/
An internal Microsoft memo, distributed earlier today, outlines new restrictions on the company’s use of “external staff” — including a new limit on people who work on projects for Microsoft through vendors.
All contingent workers will be prevented from accessing Microsoft’s buildings and network for a period of six months after every 18-month period in which they perform work for the company, according to the memo.
Perhaps most notably, the policy includes vendors (“v-dash” workers, in Microsoft lingo), who previously were able to work on projects indefinitely, without the break that some other types of contingent workers (“a-dash” temporary workers) are required to take.
One effect is to create a clearer distinction between the company’s direct employees and its contingent workforce. The new policy comes amid word that Microsoft is planning to
make cutbacks in its use of contingent staff, beyond
the 18,000 layoffs of Microsoft employees announced yesterday
https://www.cga.ct.gov/PS99/rpt\olr\htm/99-R-0775.htm
MICROSOFT CASE
In 1989 and 1990 the Internal Revenue Service (IRS) ruled that Microsoft misclassified certain workers as independent contractors. Following this ruling approximately 10,000 current and former contingent workers sued Microsoft for benefits, including the ability to participate in its lucrative stock-purchase plan. They also sued for the value of past benefits that Microsoft did not provide.
The class action suit consists of the independent contractors identified in the IRS ruling and workers placed in Microsoft by temporary employment agencies. The plaintiffs worked for at least 20 hours per week for at least five months during a year, any time after 1986. Microsoft objected to the fact that the temporary employees, who were not identified in the IRS ruling, were plaintiffs in the suit. A lower court agreed with the company and the plaintiffs appealed the court's decision.
In May 1999 a special, three-judge panel for the U.S. Ninth Circuit Court of Appeals ruled that the temporary workers could participate in the lawsuit. The opinion also stated that Microsoft must provide full benefits to the plaintiffs.
Microsoft appealed this decision to the full Ninth Circuit and that court upheld the portion of the special panel's ruling that concerned participation in the class action suit. It overturned the portion of the decision concerning benefits and said that workers were entitled only to participate in the company's stock purchase plan. If the workers win their lawsuit, Microsoft could owe them up to $20 million in stock.
https://www.latimes.com/archives/la-xpm-2000-dec-13-fi-64817-story.html
Microsoft Corp. will pay $97 million to settle a federal lawsuit from employees who claimed the software giant classified them as “temporary” workers for years to deny them standard benefits such as health insurance and the lucrative employee stock purchase plan, thereby saving the company millions.
Under the agreement announced Tuesday, between 8,000 and 12,000 people are eligible for a share of the settlement. The amount each worker will receive depends on when he or she worked, how long he or she worked and the total number of people who file claims under the settlement.
Microsoft has more than 40,000 employees; about 5,000 of them are so-called contingency workers. The settlement is unlikely to adversely affect the bottom line for Microsoft, which reported a $9.4-billion profit last year.
The issue has wide-ranging implications for the nation. The Labor Department estimates that more than 10 million Americans are temporary or contract workers.