By Sunny Sen and Suchetana Ray Hindustan Times, New Delhi Hindustan Times, New Delhi
WWR Article Summary (tl;dr) This article takes a look at "The Maternity Benefit (Amendment) Act" which was recently passed in India. The legislation has been hailed for making it easier for women to continue with their jobs after becoming a mother.
Hindustan Times, New Delhi
It took Upasana Taku three-and-a-half months to get back to work after giving birth to her first child, but the co-founder of India's second-largest mobile wallet firm, MobiKwik, said that her situation was different.
"I wanted to come back within three months, but couldn't, because my son fell sick and was in the intensive care unit," Taku said.
She believes all new mothers do not need six months of break, mandated recently by amendments to the law on maternity benefits.
"All these laws are made on averages... to make lives easy. But, to make a law that allows six months paid leave will make it difficult for women to come back to a corporate life," Taku said.
Why aren't new mothers taking their maternity leaves?
The Maternity Benefit (Amendment) Act, notified by the President's consent last month, has been hailed for making it easier for women to continue with their jobs after becoming a mother. But entrepreneurs such as Taku differ. She said studies suggest that a maternity break puts a woman's career back by a year.
In addition to the 6 months' leave, women can take two more months off at half-pay should they need it, the new law mandates.
Corporate leaders and economists fear the new law will make matters worse for working women as companies could shy away from recruiting female employees.
In India, women's participation in the workforce is far from ideal. A 2016 World Bank showed India's gender gap in workforce at 53 percentage points, higher than its neighbour Nepal (at seven percentage points).
Between 2004 and 2011, women in the Indian workforce dropped from 35% to 25%, according to an International Labour Organisation (ILO) report published in 2016.
The law applies to all companies, whether a 10-member startup or an industrial behemoth. "It is just not fair in terms of cost applicability," said Taku.
The biggest disincentive for implementing the new rule in India is for employers to bear the costs alone. In many countries, the cost is either shared or entirely foot by the government.
"The issue facing the implementation of the Maternity Benefit (Amendment) Act is in-built resistance from companies... India is struggling with the definition of employee and employers," said Akhila Shivdas, executive director at Centre for Advocacy and Research.
Several start-ups HT spoke to seemed hesitant in immediately granting the full benefits of the new law.
Most start-up headcounts range between 40-60 people -- in some cases one person managing a vertical.
For instance, the human resources department of one start-up in the financial services and cash back business is handled solely by a woman. "If she takes a maternity leave of six months, I will have to hire another person," the co-founder of the company said, wary of implementing the 6-month maternity leave.
The legal provisions do not lay down penalties for those not giving the 6-month maternity leave, but expect self-regulation.
"We have a problem of labour force participation by women in India. Estimates vary between 20-25%... one of the lowest in the world. And this Act will further skew this. Employers will be hesitant to implement this as the onus lies on them to pay for it. Employers will also be reluctant to hire more women," said Rupa Subramanya, economist and independent researcher.
Indian bureaucrats echo Rupa's apprehensions. They fear that there will be a spurt in sub-contracting to circumvent the provisions of the Act.
"But once awareness about one's rights grow, the compliance will also grow," a central government official who has worked on the new Act said hopefully.
Large multinational firms such as GlaxoSmithKline (GSK), L'Oréal and PepsiCo have already notified the benefits of the new law.
PepsiCo was one of the first to extend the leave period from three to six months. "We recognised that the extended maternity leave and flexible work hours are important support factors during motherhood for women," said a PepsiCo spokesperson.
Cosmetic major L'Oréal too has extended its leave period to 26 weeks. It has also found ways to enable work-life balance. "Mothers on maternity can also nominate team members to share some part of responsibilities as an additional project, this in turn helps develop the next level talents on the job," said Roshni Wadhwa, director-HR at L'Oréal India.
GSK, as part of its global practices, had a 6-month maternity leave policy before India mandated it.
TVS Motors and Dabur are among the Indian companies that have adopted the new policy. But voices from medium and small enterprises in India said that the same law cannot apply to all companies.
This is not the first time the Indian government has taken steps to bring down the gender gap at workplace. A regulation was passed in 2015 that every listed company in India should have a woman director on the board.
But studies show poor implementation of the rule. Data provider Prime Database in a report in 2016 said that 56 NSE-listed companies did not meet the criteria. Several government-run listed companies were part of this list of 56.
Taku and many like her, feel that in India the parameters should be different, for companies at different stages of evolution, size and scale. For maternity benefits, she believes that the decision should be left to the company. "In some countries even three months of paid leave is not mandatory... The employer could give a paid leave or unpaid leave depending on the situation," Taku said.