Reimbursement plan for seven weeks maternity leave cost Rs 400 crore

Labour ministry

The ministry of labour and employment is operating on an incentive scheme wherein seven weeks’ wages would be reimbursed to employers who employ women workers with wage ceiling up to Rs 15,000 and grants the maternity benefit of 26 weeks paid leave. It is anticipated that a fund of approximately Rs 400 crore would be needed for the labour ministry to implement the proposed scheme.

On the status of the proposal, the ministry of labour and employment has proposed that it is in the process of obtaining necessary budgetary grants and approvals from competent authorities. The ministry has made it transparent that reports that it will be funded from a “Labour Welfare Cess, is incorrect, as no such cess exists under this ministry”.

The labour ministry is of the view that the said scheme if approved and implemented shall ensure the women have equal access to employment and other approved benefits along with proper safety and secure environment.

The major purpose of the Maternity Benefit Act, 1961 is to regulate the employment of women in certain establishments for certain period before and after childbirth and to provide maternity benefit and certain other benefits. The Act was changed in 2017 increasing the paid maternity leave to women employees from 12 weeks to 26 weeks.

“While the implementation of the provision is good in the public sector, there are reports that it is not good in the private sector and in contract jobs. There is also a widespread 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,” the ministry of labour in its statement clears.

The ministry of labour is also receiving complaints that when the employers come to know that the women employee is in the family way or applies for maternity leave, the contracts are terminated on some flimsy grounds.

As per the sources to sources in the WCD ministry, who attended the meeting in the labour ministry, it was discussed that this proposed compensation may be funded through the cess funds collected for worker welfare. The 28th report of the standing committee on labor on cess funds and their utilization for the welfare of workers, quoting ministry of labor and employment, states that till March 31, 2017, an amount of Rs 32, 632.95 crores had been collected as cess out of which an amount of Rs 7,516.52 crore was utilized.

“As a result, it has been proposed that this unutilized amount of cess could be used to reimburse employers of private organizations or of the unorganized sector for the maternity benefit paid by them to their women workers,” sources in WCD ministry had stated

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