India’s Maternity Leave Laws Will Stifle Women’s Labor Force Participation, Report Says
The law, the Maternity Benefit (Amendment) Act 2017, provides new mothers with up to 26 weeks of paid leave; only Norway and Canada provide as much or more maternity leave to its working women. However, according to a new survey by TeamLease Services Ltd, an HR and payroll consulting shop, the law may fall short of its goal of retaining women in the workforce, especially when it comes to small- and medium-sized businesses. From the results of its survey, TeamLease Services Ltd estimates the participation of women in the workforce will dip by roughly 1.1 to 1.8 million in the financial year 2018-19, across 10 sectors, due to the requirements of India’s new maternity leave law.
However, “if we were to extrapolate it across all existing sectors in the country and industries that number could stand at a staggering 10 to 12 million. Given that India’s women workforce participation is already abysmally low at 27% … this seems like a setback,” says Rituparna Chakraborty, co-founder of TeamLease Services Ltd, in a video discussing the survey’s findings.
The survey was carried out across 300 employers. Businesses in sectors such as IT, BPO and e-commerce were more receptive of the policy change, and less fallout is expected. But sectors including aviation, education, retail, tourism, manufacturing and real estate showed a more negative response to the new requirements for female employees. Understandably, larger, more professional companies with more resources were less concerned about taking on women employees in light of the new maternity leave standards, while small- and medium-sized companies, with fewer resources to meet the policy’s provisions, appeared more hesitant.
“These kind of reforms are essentially supported by proactive governments across the world with complementing tax concessions, which are missing in India,” K. Sudarshan, of the executive search firm EMA Partners International, told Bloomberg. “Small- and medium-sized companies generally operate with less staff. If two of five women employees opt for maternity leave, that can cripple the firm itself.”
Government subsidies to smaller businesses is certainly one way of softening the blow on working women. Another, better way? Equal paternity leave in the form of gender-neutral family leave. Only when all employees have equal opportunities under the law will businesses have no reason to opt for men over women in order to preserve their bottom line.