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Govt proposes to bear cost of 7 out of 14 weeks extended maternity leave

A study by TeamLease earlier this year estimated that there would be a net job loss of 11-18 lakh women in the current fiscal as a result of the new norms.

twitter-logo BusinessToday.In   New Delhi     Last Updated: November 15, 2018  | 13:17 IST
Govt proposes to bear cost of 7 out of 14 weeks extended maternity leave
PC: Reuters

The much-lauded Maternity Benefit (Amendment) Act, 2017, which allowed women a 26-week paid leave after childbirth, unfortunately led to fewer women getting hired. After the Act was passed, a poll by LocalCircles had 11% businesses saying that they hired only male employees while another 46% said they hired mostly male and a few female employees.

Similarly a study by TeamLease earlier this year estimated that there would be a net job loss of 11-18 lakh women in the current fiscal as a result of the new norms. There were several reported instances of employers trying to cut costs by asking female employees to quit after the maternity leave period was more than doubled or retrenching them on flimsy grounds before they went on leave.

So, the government is now reportedly looking at ways to encourage hiring of women and work around the perceived maternity leave roadblock. A senior government official told The Economic Times that the Labour Ministry proposes to reimburse employers the salaries paid for seven of the additional 14 weeks of maternity leave for female employees in the Rs 15,000 salary bracket who have been EPFO subscribers for 12 months. This would cost the exchequer Rs 400 crore annually.

"Much on the lines of Pradhan Mantri Rojgar Protsahan Yojana, the Labour Ministry now plans to give fiscal incentives to employers to retain female workers availing 26 weeks of maternity leave," said the source, adding that there have been several representations before the ministry on how the extended maternity leave has become a deterrent. The proposed policy will start on a pilot basis in New Delhi and Maharashtra and scale up across India subsequently.

Labour Minister Santosh Kumar Gangwar yesterday chaired a meeting on incentives to help employers bear the extra financial burden and a policy in this regard is expected to be finalised soon.

The Maternity Benefit Act, 1961, protects the employment of women during their maternity leave and entitles them to benefits including full pay. The act is applicable to all establishments employing 10 or more people such as factories, mines, plantations, shops and other entities, as may be notified by the Central Government. To be eligible for maternity benefits, a woman must have worked in an establishment for at least 80 days in the past year.

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