The much-lauded Maternity Benefit (Amendment) Bill 2016, which stipulates 26 weeks of maternity leave for up to two children, may end up becoming a double edged sword. When it was first passed, the Bill was praised by many as being a progressive attempt to bring more women back into the workforce. Former Labour Minister Bandharu Dattatreya had even termed it a ‘humble gift’ for women.
However, a recent report by HR firm TeamLease has found that the reverse may also happen. According to the report, while larger companies are more likely to welcome women into their workforce, smaller companies and startups may find the Bill to be a deterrent and may hesitate to employ women.
What the amended Bill entails
The Maternity Benefit (Amendment) Bill 2016 is an amendment to the 1961 Maternity Benefit Act. The amended Bill entitles Indian women working in the private sector, to 26 weeks of paid leave. As per the amendments, nursing mothers may also have the option to ‘work from home’ for a stipulated duration beyond the 26 weeks, based on the agreement between the woman employee and the employer. The Bill also allows for 12 weeks of maternity leave for mothers who are adopting a child below the age of three months and also for commissioning mothers who take the surrogacy route. As per the amended Bill, the maternity leave benefit is reduced to 12 weeks for the third child, and six weeks if a woman wishes to have a fourth child.
The thought behind the Bill was that giving new mothers six months of maternity leave will enable a large number of working women, primarily those in the organised sector, to take care of their new born babies, provide exclusive breastfeed for the first six months and recover from child birth. This would also make it easier for women to join back after the stipulated six months are over – giving them time to find alternative means of support, if possible.
The ground reality
Team Lease’s survey titled ‘The impact of maternity benefits on business and employment’, conducted with 350 start-ups and SMEs, has revealed that close to 1.1 million to 1.8 million women may lose their jobs across 10 sectors such as aviation, tourism, banking, e-commerce, information technology and IT-enabled services, education, etc. This is because, with the Law putting the entire financial burden on businesses, many, especially startups and SMEs are unable to handle it, and thus, find it easier to avoid hiring women in the first place.
According to the survey, retaining women post-maternity could cost establishments 80-90 percent of the annual salary in the case of a white-collar employee, and up to 135 percent for a blue collar worker. Many of the SMEs and startups surveyed have categorically stated that they would avoid hiring women, because of what it would cost them in six months’ pay and the additional financial burden of hiring a temporary substitute. Larger organisations, many who already have well planned maternity benefits, have backed the law.
This is worrisome for a country which has one of the lowest participation of women in the work force. According to data released by the International Labour Organisation (ILO), while the percentage of Indian women in the work force increased between 1990 and 2005, from 35 to 37 percent, the trend has seen a reversal with the percentage decreasing to 27 percent in 2014. While there are a number of factors that have led to this reversal, marriage and motherhood are among the most quoted reasons.
How other countries have done it right
Apart from the fact that the entire burden of financing the maternity leave falls on the employer, another reason why it fails is that the Amended Maternity Leave Policy puts the onus of childcare entirely on the mother. Fathers who wish to be with their babies have to often resort to taking sick leaves, which many hesitate to as they fear that it may affect their future prospects in the company.
While currently Central Government employees can take 15 days of paternity leave, there is no such entitlement in the private sector. Large companies such as Ikea, Google India, Star India and Deutsche Bank have taken the progressive step of allowing their male employees to avail of paternity leaves as well, but many do not offer any such benefits to their male employees.
However, countries which see both a higher concentration of women in the workforce, and also enjoy a work-life balance, are those that guarantee parental benefits for both parents. This, then, ensures that both parents have the opportunity to avail of leave to look after their baby. In fact, studies from countries such as Denmark, Australia, Britain and Canada, have shown that fathers who availed of paternity leave after their babies were born were more likely to continue participating in the child’s day to day care giving activities such as bathing, feeding, putting the child off to sleep. These countries also rank as some of the happiest in the world.
Sweden was the first to bring in the policy, back in 1974, when it replaced maternity leave with parental leave, hence giving both parents the option of staying back and caring for their children. Sweden provides a total of 480 hours of parental leave, which can be shared by both parents. In fact, the Swedish Government is now asking its fathers to take five months off work to encourage fairer sharing of leave between both parents.
Iceland gives a total of nine months of parental leave – three months for mothers, three for fathers and an additional three for either parent, with 80 percent of their pay. Denmark gives its fathers a total of 14 days off, which is fully paid. Apart from that, either parent can avail of an additional 224 days. Fathers in Finland are granted eight weeks of paid leave, while mothers have 23 weeks, which can be split between pregnancy and after the birth of the child.
Tax concessions to businesses and public funding of maternity leave are also other factors that help women get back into the workforce. Infact in France, which gives 16 weeks off, the maternity leave is paid for by public healthcare, and as per a study conducted in 2010, 80 percent either return to work or start actively looking for work after the period is over.
Similarly, in Denmark, the leave period is either funded by the employer or the Udbetaling Danmark, the authority which is responsible for collecting and disbursing public funds. In Bulgaria, too, mothers are entitled to 410 days of maternity leave at 90 per cent of their gross salary paid by the National Health Insurance Fund. After the baby turns six months, the leave can be transferred to the father.
For women to actually reap the benefits of a progressive Maternity Policy, the Government should be willing to atleast partly fund the maternity leave period, or provide sops such as tax incentives for companies for following the Law. It should also consider bringing in a Law for paternity leave to ensure that men are also a part of the child rearing process.