Microsoft agreed to pay $14.4 million to settle allegations it retaliated and discriminated against employees who had taken legally protected time-off, according to a state agency in California.

The California Civil Rights Department alleged employees who took leave from work due to pregnancy or disability, or to bond with a new baby or care for a sick family member, received lower bonuses and unfavourable performance reviews.

In turn, those factors harmed employees’ eligibility for merit pay increases and promotions, the department stated. The practice also disproportionately impacted women and people with disabilities.

California-based employees who took protected leave and worked for Microsoft from May 2017 to the present may be eligible to receive compensation.

As part of the proposed settlement, Microsoft will take steps to prevent future discrimination, including updated manager and human resource training.

An independent consultant will monitor and report whether Microsoft is complying with the settlement.

The settlement is subject to a court approval. If it is approved, the company will pay $14.2 million to cover direct relief for impacted workers and $225,000 for costs associated with the department’s enforcement efforts.

California Civil Rights Department director Kevin Kish applauded the tech giant “for coming to the table and agreeing to make the changes necessary to protect workers in California”.

A representative for Microsoft told Mobile World Live that while it believes “the agency’s allegations are inaccurate, we will continue to listen, learn and support our employees”.

“Microsoft is committed to an environment that empowers our employees to take leave when needed and provides the flexibility and support necessary for them to thrive professionally and personally,” the company said in a statement.