Maternity Bill amendment can lead to 11 to 18 lakh job losses: Teamlease Report
Passed in 2017, to help the women employees, The Maternity Benefit Amendment Act to increase the duration of paid maternity leave to 26 weeks has proven to be ineffective instead.
As per the latest report by Team Lease Services, the instant consequences of the amendment is not in favour of the women workforce.
The report titled ‘The Impact of Maternity Benefits on Business and Employment’ says that the bill will cause an estimated job loss of 11 lakh to 18 lakh in FY18-19 across the 10 sectors considered for the study.
While the bill also impacts the currently employed women workforce, the 2017 amendment bill will significantly hinder the entry of new women into the workforce.
As of 2017, there are 27% of women present in total Indian workforce, out of which 14% of the total women workforce is employed in the formal sector. Though, only 3 out of the 10 sectors covered under the study believe that the impact of the bill will be positive.
As they believe that financial and opportunity cost of replacement is higher than the cost of retention, large companies (both private & public sector) as well as medium-sized public-sector companies are more passionate about the act and are expected to hire more women workforce.
Whereas, as a deterrent and would hence look to lessen the hiring of women, start-ups, SMEs, medium-sized MNCs and sectors with legacy HR practices and closely-held family-run businesses across sectors distinguish the act.
The report also explains that the bill will lead to a possible job loss of about 1.6% to 2.6% across sectors and there will be fewer takers for women in the workplace in the short term (up to1 year)
Especially, for permanent jobs or long-term projects, businesses have become cautious to hire women.
They are overlooking the benefits of adding women to their workforce.
According to the report, by 2025, increasing the women Workforce Participation Rate can potentially result in the share of women in jobs going up to 35%, leading to increase the GDP growth by 16 percent to 60 percent.
If more and more establishments realize the benefits of adding women to the workforce, India could potentially add 6.8 crore women employees to its staff by increasing the amount of female workforce participation.
"The investment employers will make towards this end will go a long way in improving women’s workforce participation and, thereby, boost national in.” says Ms. Rituparna Chakraborty, Co-founder & EVP, TeamLease Services.
She further states that as with most reforms of such scale, the mechanics of change are as critical as the reform itself. It would require a participative approach.
She also suggests that the government should support the corporate at every step by allowing flexibility as well as financial support so that all types of companies can be a part of the endeavour without hesitation."
