Government Plans Incentive for Maternity Leave

Guwahati: In a welcome move, the Union Labour Ministry plans to refund employers seven weeks’ worth of wages for women workers with a wage ceiling up to 15,000 per month subject to budgetary approval. The move is taken in a bid to encourage employers, especially in the private sector, to implement the extended 26-week maternity leave law. The Ministry is in the process of getting budgetary approvals for the ₹400 crore incentive scheme, according to an official statement.

In March 2017, the Centre amended the Maternity Benefit Act to increase paid maternity leave from 12 to 26 weeks for all women employees in establishments employing ten or more people. However, stating that while implementation of the provision was good in the public sector, it was poor for those with the private sector or contract jobs.

“There is also a wide perception that private entities are not encouraging women employees because if they are employed, they may have to provide maternity benefit to them, particularly 26 weeks of paid holiday,” said the statement. The statement also mentioned that the extended maternity leave has become a deterrent for female employees who are asked to quit or retrenched on flimsy grounds before they go on maternity leave.

The Statement further mentioned that the Ministry of Labour and Employment is, therefore, working on an incentive scheme whereby the government would bear the cost of maternity leave wages for seven weeks, subject to certain conditions. The financial implication of the Centre is estimated to be 400 crores.

The statement further clarifying that the Ministry is in the process of obtaining budgetary approvals and denying a section of media reports that it will be funded from Labour Welfare Cess, the statement said, “There are some media reports that this scheme has been approved/notified. However, it is clarified that the Ministry of Labour & Employment is in the process of obtaining the necessary budgetary grant and approvals of competent authorities. The reports that it will be funded from Labour Welfare Cess, is also incorrect, as no such cess exists under this Ministry.”

It may be mentioned that the 'Building and Other Construction Workers’ Welfare Cess (BOCW) Act provides for collection of cess for construction workers by states/union territories. As per a Lok Sabha reply by Labour and Employment Minister Santosh Kumar Gangwar in March this year, approximately Rs 39,152 crore has been collected by the states/ UTs under the Building and Other Construction Workers’ Welfare Cess Act, 1996, up to December 31, 2017, out of which Rs 10,123 crore has been spent. The unutilised amount of cess lying with the States/UTs as on December 31, 2017, is approximately Rs 29,029 crores.

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