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Companies to bear the cost of childcare facilities for employees, says government

The government in the Maternity Benefit Act made it mandatory for the employers with 50 or more employees to provide creche facility, either separately or through a common facility.

Sonal Khetarpal   New Delhi     Last Updated: November 2, 2017  | 00:19 IST
Companies to bear the cost of childcare facilities for employees, says government

In a recent RTI reply, the government confirmed that employers need to bear the complete cost of providing childcare support to its employees.

The government in the Maternity Benefit Act made it mandatory for the employers with 50 or more employees to provide creche facility, either separately or through a common facility. Before this, the bearer of the cost was not addressed in the Maternity Benefit Act.

The legislation though set to bring women back to workforce might actually deter companies, especially small enterprises, to hire women due to the increasing cost of employing women, feels industry experts.

"For women, between 25-35 years in particular, such a proposition will hurt them the most even before they can make significant progress in their careers, as they will be seen as a potential financial liability by prospective employers," says Priya Krishnan, Founder & CEO of Founding Years Learning Solutions, that runs day care centres under the brand names KLAY Schools and The Little Company.

She adds that it is counterintuitive that 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."

The IFC report - Tackling Childcare - noted that in firms that provide childcare facilities, the employee turnover rate is substantially lower, and vacancies are filled faster. Such firms witness improvements in the quality of applicants. The biggest benefit, however, is the increase in productivity due to lower absenteeism and leave taking, greater focus and enhanced motivation and commitment.

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