Are Women Losing Jobs Due To Increased Maternity Leave? A New Study Reveals Problems

Posted: June 30, 2018

When the Maternity Benefit Act was amended in 2017 and it increased maternity leave from 12 to 26 weeks in all establishments with a workforce of more than 10 employees, it was hailed as a historic step towards empowerment of women. Is the reality panning out as planned?

Besides increased maternity leave, the amendment had also mandated the setting up of creches within a prescribed distance of the workplace and permission for female employees to visit their child in the creche four times during work hours everyday.

Expectations from the amended act

It was believed that the new provisions would ensure better physical and mental health of both the new mothers and their children and also provide greater job stability to the female workforce. However, it was anticipated by many that the positive intentions of the government through this amendment may not actually be as fruitful as anticipated.

It was feared that while larger establishments with better financial stability may be able to bear the additional cost of giving six months paid maternity leave to their female employees, micro and small enterprises with lower profit margins would not be able to sustain the additional expense. In the long run, therefore, this well meaning could result in a negative sentiment towards hiring women and even result in retrenchment of pregnant employees.

The apprehensions seem to have come true much sooner than expected.

A new study reveals significant challenges

A recent study by TeamLease has revealed that an estimated 11-18 lakh women could lose their jobs in FY 2018-19 itself (complete report here: PDF) and this number is over and above the average annual attrition rate for female workers. The participation of women in the national workforce has been on the decline steadily; from a healthy 37% in 2005 it has already dwindled to 27% in 2013.

The survey interviewed 300 employers across 10 key sectors — aviation, BPO/ITeS, real estate, education, e-commerce, BFSI, IT, manufacturing, retail and tourism and attributed the massive job loss to the amended Maternity Benefit Act 2017.

Though many of the large and medium scale enterprises have taken the amendment in a positive manner and incorporated provisions for maternity leave benefits to their female employees in their annual budgets, micro and small scale businesses are feeling the pinch on account of higher expenses and lower productivity due to the enforcement of this Act.

While the corporates believe maternity leave at full salary is an investment in retaining skilled and valued female employees and also maintaining much desired diversity at workplaces, the smaller establishments think of this amendment as an undesirable and forced burden which stretches their already narrow profit margins beyond acceptable limits.

Impact on Hiring and Retention of female employees

Many employers believe that women’s performance goes down when they become pregnant and deliver a child, and that they also tend to take more leaves on account of their own poor health and childcare; such employers feel that the legal compulsion to pay their full salaries inspite of their reduced productivity is totally unjustified. If they have to be given six months’ paid leave as maternity benefit and creche facility has to be created within the prescribed vicinity of the workplace then they would rather not hire any women at all or dismiss them as soon as they announce their pregnancy since their organisation can not afford the expenses related to the maternity benefits.

Lack of adequate maternity benefits and fear of retrenchment may compel women to even postpone their maternity plans or not reveal their pregnancy for as long as they can hide it.

How does India fare vis-a-vis other countries?

The good news is that India is now one of the countries that offer the highest quantum of maternity leave. The bad news is that though some organizations do offer 1-2 weeks of paternity leaves to their male employees, our country is yet to make it mandatory on the lines of the Maternity Leave Act. India has also not cared to adopt the concept of shared parental leaves. Not only developed countries like Russia but quite a few smaller countries like Lithuania, Estonia, Hungary, Denmark, Belgium offer shared parental leaves. In fact, Norway and Sweden mandate a certain number of weeks’ leave as compulsory paternity leave.

India also doesn’t have a social security system to compensate, even partially, the private establishments for providing the mandatory maternity benefits. It doesn’t offer any tax benefits to the organizations to encourage them to hire female workers. Thus it places the entire financial burden on the individual organization thereby increasing the total cost to the company (CTC) of hiring a female employee and making it unsustainable for the smaller businesses. A 100% company-funded maternity benefit also creates a significant gap between the CTC of male and female employees. This in turn leads to gender bias against women at the time of hiring and also retrenchment of female workers when they become pregnant.

The Maternity Leave Act also reinforces traditional gender role of women as sole caregivers

Providing leave to only the female parent and the clause of providing creche at mother’s workplace and allowing her to visit the child four times during the day perpetuates the notion that childcare is only the mother’s responsibility, overlooking the fact that many fathers are equally capable of taking care of the child and may even want to take it up gladly. It also ignores the single fathers who may need to be with their child during the work hours.

The concept of shared parental leaves, on the other hand, promotes equal responsibility of childcare for both men and women and also provides the father an opportunity to bond with the child better.

If the government is really keen to make this well-intentioned amendment a success, it must incorporate the provision of shared parental leaves and mandatory paternity leaves. It must find ways to incentivise the smaller enterprises by providing tax cuts or sharing the financial burden in order to provide an equal footing to the female workforce along with greater job security. This move will ensure that women can return to work earlier and in a much healthier and calmer state of mind. Moreover, it will also help promote greater gender diversity at workplaces.

Such positive and thoughtful steps only can ensure that female workers are not discriminated against and are able to enjoy motherhood as well as their work without any fear of job loss.

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