Amended Maternity Bill could create 1.2 crore job loss for women in FY 2018-19

According to a TeamLease report shared exclusively with the TOI, women’s hiring in the workforce is set to dip sharply in the workforce due to the Maternity Bill (Amendment) Act that came into force last year. The report has estimated a net job loss of 11-18 lakh for women for the fiscal year 2018-19 which is over and above the average annual attrition rate of women employees in the workforce. The study was conducted among 300 employers in 10 sectors: aviation, BPO/ITeS, real estate, education, e-commerce, BFSI, IT, manufacturing, retail and tourism.

TeamLease Services co-founder and executive VP Rituparna Chakraborty said, “Historical data shows that the Indian workforce has been losing women workers at the rate of 28 lakh per year for seven years from 2004-05 to 2011-12. The net job loss (11-18 lakh for 10 sectors for FY19) over and above this number is attributable solely to the Amended Maternity Act.” She further added that if the estimated job loss attributable to the Amended Maternity Act is applied across all sectors, then the estimated job loss could go up to 1.2 crores.

The amended Act is seen to affect micro and small enterprises the most who run on low-cost margins. The Act entitles a women employee to 26 weeks of paid leave and mandates that every firm that hires over 10 employees should provide these benefits to its female employees, the cost implications of which are too much of a burden for micro and small businesses. Saundarya Rajesh, founder of Avtar Group, said, “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% 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.” She added, “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.”

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Earlier, the Economic Times had also reported that startups and SMEs were reluctant to hire women employees after the Amended Maternity Leave Act came into force. Many had made the argument that it was not affordable for such small enterprises due to lack of resources to provide 6 months of paid leave to one of its employees. We had in an earlier report highlighted the shortcomings of the Bill including the fact where wore paid parental leave is linked to widening gender pay gap and firms hiring more temporary employees to reduce employee benefits costs.

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