Business Standard

Going family way no child's play

Small businesses have concerns over expenses, liability; some predict initial dip in hiring of women

Sayan Ghosal 

A more comprehensive maternity benefit compliance regime might soon become a reality for businesses with the passage of the Maternity Benefits (Amendment) Bill by the Rajya Sabha. However, small and medium-size enterprises are concerned about the increase in expenses, and the practical difficulties in providing creche facilities near the workplace. An International Labour Organization (ILO) study ranks India 11th from the bottom out of 131 countries in female workforce participation. The percentage of women undertaking formal employment has also dropped in recent years, from 37 per cent in 2004-05 to 29 per cent in 2009-10, though education levels had increased significantly in the same period. The Bill aims to rectify this by providing a more holistic environment for female employees to balance occupational and familial responsibilities, without having to leave the workforce. It is expected to benefit around 1.8 million working women in the organised sector. Certain important changes have been proposed to the current legislation, the Maternity Benefits Act, 1961. This applies to factories, mines, plantations and other establishments with 10 or more employees. Realising the need for change with the advent of nuclear and two-income families in recent times, the Bill increases the period of fully-paid maternity leave from 12 to 26 weeks (exceeding the 14-week ILO minimum standard) for mothers with less than two children. The amendment also enhances the period of leave that may be taken by these women prior to delivery to eight weeks, instead of the six weeks previously allowed. Women who adopt children (up to three months of age), and commissioning mothers (a biological mother who uses another woman for delivery) have also been proposed to be included under the scope of the law and the amendments provide for 12 weeks of maternity leave for these categories. Employers have been given the opportunity of extending maternity benefits provided to women after the expiry of these prescribed periods, by allowing 'work from home' options on mutually agreed terms, if the nature of work is capable of being performed away from the workplace. The proposed amendments also make it compulsory for establishments with 50 or more employees to provide creche facilities (either separately or along with common facilities) that can be accessed by female employees up to four times a day, in addition to the two nursing breaks already allowed. According to Atul Gupta, partner, Trilegal, in the absence of a provision on the duration of creche visits and the period for which this benefit can continue, employers should have the ability to lay down guidelines and ensure the relationship is symbiotic. Additionally, the Bill makes it mandatory for employers to inform all female employees of their available maternity benefits during the time of appointment.

According to Section 21 of the Act, not providing maternity benefits attracts a penalty of up Rs 5,000, as well as imprisonment of three months, extendable to a year. Any non-compliance with the creche provisions could also attract imprisonment of up to a year, and a fine of Rs 5,000. With the reality of these additional requirements knocking at the doorsteps of businesses, some small and medium sized establishments have taken to these proposals unenthusiastically. The additional costs associated with payments of enhanced benefits and establishment of creches have been considered unfeasible by some of these entities. "Smaller organisations typically have tighter budgets and lesser flexibility. The amendments would increase institutional costs and require engaging of substitute staff to ensure business continuity," said Gupta of Trilegal. He says this might also result in a dip in the hiring of women in the micro, small and medium enterprises sector, at least initially. Shachi Irde, executive director, Catalyst India, agrees. "With the government not compensating organisations for extending maternity leave, small and medium companies might become wary of recruiting women, as it would be considered an added cost to the company," she said. Businesses are also concerned over the liability issues associated with children at the workplace, as well as the generality of the provision for establishment of creches, which has not been applied on the basis of the number of working mothers in an establishment. The wide applicability of this provision could cause an unnecessary burden on these categories of enterprises, leading to wastage of resources that could be utilised elsewhere. Though there will be one-time as well as recurring costs for businesses with the implementation of these proposals, the picture is not all grey. Providing additional benefits have been known to increase workforce retention rates and lower absenteeism. Institutions could also save on the large rehiring costs associated with resignations related to maternity. Many companies, especially those in the information technology space, have leaves for adoption, for surrogacy and even for expecting fathers. Though the Bill now attempts to legislate formally on some of these aspects, it remains silent on paternity leave. Major changes introduced in the Maternity Benefit (Amendment) Bill, 2016 Enhancement of maternity benefit from 12 weeks to 26 weeks for working mothers with less than two children Provision for maternity benefit of 12 weeks for adoptive and commissioning mothers Work from home option for women after expiry of maternity benefit period on mutually agreed terms Provision for establishment of creches in establishments with 50 or more employees Women employees to be provided information by employer on available maternity benefits at time of appointment Compliance related issues businesses may face after implementation of changes Additional maternity oriented payouts after enhancement of benefits Longer absence of women employees from the workplace during maternity Costs incurred to provide creches Liability issues associated with children at the workplace

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First Published: Sun, August 21 2016. 21:20 IST
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