Maternity Leave: A Potential Financial Liability To Employers?

Working women in India were welcomed with a maternity bill benefit of half a year, contrary to the long standing three months leave.

The Lok Sabha had passed the historic mandate on 9th of March 2017, providing relief to approx. 2 million working women in the country.

However, the private sector doesn’t seem to be favouring the bill, citing burden of 26 weeks of paid leave for an employee. It is extremely difficult for private sector to manage for an employee’s absence while paying for six months.    

Giving another jolt to the private companies through a recent RTI reply, the government has confirmed that employers need to bear the complete cost of compliance and providing childcare support to its employees, which was not addressed in the Maternity Benefit Act before.

Priya Krishnan, Founder & CEO, Founding Years Learning Solutions, India's leading daycare company said, "A legislation that was seen as a boon for the women workforce and help bring more women back to work, is turning out to be a significant setback in women employability given the lack of strategic thought that seems to have gone into its roll-out. Through this RTI reply, the government has unfortunately confirmed the long-held fear of the corporates bearing the complete financial burden in complying with the Maternity Benefits Act.

What this effectively does is that retaining women suddenly becomes a far more expensive proposition for employers. For women between 25-35 years in particular, this will be even more daunting as even before they can make significant progress in their careers, they are seen as a potential financial liability by prospective employers.

She added, “While other countries provide voucher systems and subsidies, it is sad to see that in India, the government has diminished its own role in the larger objective except for mandating companies to implement this, that too mid-financial year.”

“Women employability and increasing its attractiveness cannot be only the employers' responsibility especially when the government has stated it as a legal goal."