A key employee’s absence of 26 weeks tends to weigh heavily on businesses that operate with thin margins
While the Maternity Benefit (Amendment) Act came as a relief to the working women of India, it is not going down well with many firms for whom the cost of six-month paid maternity leave is difficult to afford. This had led to job losses for women, estimated at 1.2 crore across sectors, in FY19, reports The Times of India.
A TeamLease report estimates a net job loss of 11-18 lakh women for the fiscal year 2018-19. This is over and above the average annual attrition rate of women employees in the workforce.
Section of the industry that find paid maternity leave unviable
The study was conducted among 300 employers across 10 key sectors — aviation, BPO/ITeS, real estate, education, e-commerce, BFSI, IT, manufacturing, retail and tourism.
While post-maternity retention cost (at 80-135 percent of annual salary for each beneficiary woman employee) is seen as a judicious investment by some employers, others see it as a prohibitively expensive proposition. The 100 percent employer-funded model of the Act is seen as unviable by some sections of industry.
According to Saundarya Rajesh, founder of Avtar Group, a leading diversity and inclusion consulting company, “The six-month maternity leave has had very wide and positive acceptance among large organisations. Even medium-sized organisations (Rs 50-100 crore turnover) have accepted this and have budgeted for provision in their payouts for 10-12 percent of their employee base to be on maternity leave at any given point of time. Unfortunately, this is not the case with micro and small enterprises.”
During her interactions in several small business forums and entrepreneur/startup circles, Rajesh found that a key employee’s absence of 26 weeks tends to weigh heavily on businesses that operate with thin margins, that too amid aggressive competition.
“Businesses that have a turnover of up to Rs 10-15 crore find it very difficult to afford six-month paid maternity leave, along with identifying (and paying for) temporary replacements. I suspect that if women’s workforce participation rates are tracked state-wise and town-wise, a pre- and post-six-month maternity leave scenario will show a distinct dip after 2017. In non-metros, there is still evidence of male domination and patriarchy and this, combined with the six-month maternity leave, has dealt a double whammy to women’s employment,” said Rajesh.
How can the government help?
Experts believe the government could provide sops to the industry to improve women’s participation in the workforce.
According to TeamLease Services co-founder and executive VP Rituparna Chakraborty, “The government could come up with an amnesty scheme or additional benefits to encourage employers to hire more women.”Another expert said if the government could provide a tax benefit or some kind of incentive for micro and small enterprises that employ women on their rolls and, therefore, make provision for a six-month maternity leave, the situation would improve.