An admin assigned a Microsoft 365 license to the Employees group. Contractors are added only to a Contractors group, which is itself a member of Employees. Contractors report that they have no license. What should the admin do, with the least ongoing effort?
Choose one.
Group-based licensing applies the license only to users who are direct members of the licensed group. Members of a nested group are not licensed through the parent group.
The contractors are members of Employees only through the nested Contractors group, so the Employees assignment never reaches them. Two facts decide the answer: nesting isn't followed, and a license can be assigned to more than one group. Licensing the Contractors group directly fixes the gap and keeps licensing automatic as contractors come and go. Licensing each contractor works too, but it creates per-user work for every new contractor. Changing the group type or reversing the nesting leaves the users in a nested group.
- Spot the nesting: contractors are only indirect members of the licensed group.
- Recall that group-based licensing reaches direct members only.
- Look for a fix that keeps licensing tied to membership.
- Choose a second group assignment on the Contractors group over per-user assignment.
Exam tip: Group-based licensing ignores nested groups: license the group the users are directly in.
AB-900 Core Objects: Microsoft 365 Licenses and the Exchange, SharePoint and Teams Admin Centers — the lesson that teaches this.