India has the third most progressive maternity benefit laws globally, behind only Canada and Norway (TeamLease Report, 2018). With the landmark amendment to the law in 2017, our country effectively beat developed countries like United States, France, Japan, UK, etc., to recognise the mother’s right and need to take a leave of six months to take care of herself and her infant after delivery. The policy, amongst many things, is expected to boost the female labour force participation rate (LFPR) because, despite increased education and income levels, India’s female LFPR remains at a shocking 18.6 per cent versus 55.6 per cent in males. The situation is no better among urban women. They constitute a mere 16.1 per cent of the workforce compared to 56.7 per cent of males (Ministry of Statistics & Programme Implementation, 2020). Hence, this article aims to critically analyse India’s Maternity Benefit (Amendment) Act 2017, to understand whether the law will successfully bring more women to the workforce. It also compares the law with international practices to offer solutions to make childcare leave policy more gender-neutral. The Law and its Benefits With the latest reform, The Maternity Benefit (Amendment) Act, 2017, increased paid maternity leave to 26 weeks from 12 weeks earlier for women employees unless they have two or more surviving children. It recognised the rights of mothers who opt for adoption or surrogacy by extending them paid maternity leave for 12 weeks. Women can also avail work from home option post their maternity leave on terms mutually agreeable to the mother and her employer. Lastly, companies employing more than 50 employees will have to mandatorily provide crèche facilities, with the mother having the right to visit the daycare centre four times per day (The Maternity Benefit (Amendment) Act, 2017, 2017). Studies suggest that the amendment will positively impact female labour force participation (TeamLease Report, 2018). The longer paid leave will improve job security for women and ensure they take due care pre-and post-delivery. The Maternity Convention 2000, adopted by the International Labour Conference in June 2000, recommended that maternity leave be at least 14 weeks (Cerise et al., 2013). Research studying data from nine European countries between 1969 and 1993 also showed similar results that parental leave of around three months is associated with increased women employment, especially of childbearing age (Del Rey et al., 2021). Hence, a generous maternity leave induces women to shorten the time spent out of the labour force and lengthen the periods protected by maternity leave schemes (Brugiavini et al., 2013).
While the policy is hugely considerate in terms of duration, it falls short in its implementation strategy. As per the law, the employers will have to bear the entire cost of providing a paid maternity leave to women employees, inadvertently making them more expensive than male candidates. The amendment doesn’t directly state that employers will have to bear the cost burden. Still, in reply to an RTI application to the Ministry of Labour and Employment, the government said the costs for providing crèche facilities must be borne by the employer (Singh et al., 2018). This means that if a man and a woman with similar educational qualifications and experience were to apply for the same job, the cost a company would have to bear for a woman employee would be significantly higher, putting her at a disadvantage. While the cost of hiring a male candidate is limited to salary and other statutory benefits, for women, the company now has to pay for a 26 week paid maternity leave, setting and maintenance of a crèche and the salary of an interim hire (Nikore, 2017). The increased cost burden can have several severe fallouts on female labour force participation. First, companies may now prefer low-cost male employees versus female candidates. Second, it may lead to women receiving a lower upfront salary to allow companies to compensate for the additional maternity costs to be incurred later. Third, contractual employment may increase even in the formal sector, at multi-national companies, start-ups and other service-based companies to avoid any statutory obligations (Nikore, 2017). A TeamLease report published in 2018 revealed that the bill would be counterproductive to women participation in the next 1- 4 years. From an organisational perspective, large public and private companies and medium-sized companies will be more enthusiastic about the amendment. They are likely to increase women employees since the financial and opportunity cost of replacement is higher than retention. However, start-ups, SME’s, sectors with legacy HR practices and closely-held family-run businesses across the industry may perceive the bill as a deterrent and reduce women intake (TeamLease Report, 2018). Lastly, by providing parental leave only to women, the amendment essentially puts the onus of childcare solely on them.
Similar to BRICS nations, the Indian government, to ease the employer cost burden, can supplement employer contributions via social security programs and tax rebates (Dubey, 2021). The Employees’ State Insurance Act, 1948, can also be tweaked to cover all establishments and workers across wage levels. Currently, beneficiaries of this scheme, including maternity claimants, have to meet two eligibility criteria. First, the employee’s company should be covered under the ESI Act. Second, the female employee herself should not be earning more than Rs 21,000 per month. The ESI Act needs to be extended to all since it effectively neutralises the high-cost burden of hiring a female candidate. Under this Act, employer contribution to the insurance scheme is gender-agnostic, i.e., it’s the same for all employees. At the same time, the benefits are gender-sensitive since the Employees’ State Insurance Corporation pays for the maternity benefits only to women (Mathew, 2019). Moreover, government-funded or cost-sharing models for maternity leave payments also help reduce female discrimination in families. Research indicates that female employment is higher when governments pay for maternity leave in countries with a higher level of discrimination in the family (Cerise et al., 2013). Lastly, apart from state support in maternity leave, the government should also introduce a similar leave policy for fathers to encourage women to step outside their house to pursue their careers. This will promote equal uptake of domestic and childcare responsibilities and consequently reduce the gender norm of women being the primary caregivers. Currently, the only paternity leave legislation present in India is in government services. The Central Civil Services (Leave) Rules, 1972, allows male government employees to take a leave for 15 days before or within six months of the delivery or adoption of the child. Also, in October 2020, the government entitled male employees to Child Care Leave (CCL). However, CCL will be given only to those male employees who are single parents, including widowers, divorcees or unmarried. While this is a welcome move, the policy yet again reinforces the gender norm that a man’s role in child care is the last resort, and it’s the woman who is supposed to take care of kids alone (Dhanuka & Banthia, 2021). Paternity leave can counter this gender bias since a 2016 study among 1,130 couples in Spain with children 3-8 years old revealed that fathers who took childcare breaks became more involved in their children’s life (Sharma et al., 2020). Several countries across the globe offer paternity leave. These include: Norway: 2 weeks paid leave after delivery, and mandatory 14 weeks paid leave before the child turns 3 Iceland: 3 months of parental leave Sweden: 16 months paid parental leave, extendable by 180 days in case of twins, at 80 per cent of salary. Swedish fathers must take at least three months’ break of those 16 months. Spain: 30 days paid leave at 100 per cent pay (Sharma et al., 2020). Furthermore, lengthened paternity leave is resisted by arguing that a mother’s absence in the form of breastfeeding can be detrimental to the child’s health. However, the Norwegian Directorate of Health recommends that mothers breastfeed babies for six months, after which solid food should be introduced to a child’s diet. Hence, fathers can immediately take up the responsibility after the precaution period so that women can return to work (Dhanuka & Banthia, 2021).
It’s sufficient to say that India has come a long way in terms of maternity leave policies. By being the third most progressive country in terms of maternity benefits, the government has rightly recognised the need for an institutional guarantee and support for women to take care of themselves and their kids during their childbearing period. However, the buck doesn’t stop here. In order to effectively boost female labour force participation and make women equal job competitors, the government needs to acknowledge further the shortfalls of the current Maternity Benefit (Amendment) Act, 2017. Simply introducing a policy is not enough; the government needs to work the extra mile to ascertain it’s being implemented in its true spirit. Extended paternity leave and increased government support to employers are some of the measures that can be brought in to ensure complete gender equality in the workplace. Only when such steps are taken can India expect to unleash its true GDP potential.
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The views expressed in this article are the author's own.