How the maternity amendment bill impacts employees and employers?

In 2017, Parliament passed the Maternity Benefit Amendment Bill, which has increased the number of paid maternity leaves for working women from 12 weeks to 26 weeks. Though considered it a great move, some were apprehensive about the impact of the bill on employees and employers. Let’s understand how the maternity amendment bill has been impacting employees and employers and what future impact it will have.

Key Takeaways

• Holistic Health Focus: The extension to 26 weeks is designed to allow mothers sufficient time for recovery and breastfeeding, which is expected to lower maternal and infant mortality rates.

• Infrastructure Requirements: Companies with over 50 staff members must now invest in physical crèche facilities or partner with nearby centers, allowing mothers four visits a day to the facility.

• The “Participation” Paradox: While the law encourages women to stay in the workforce, the high cost to employers (especially SMEs and startups) has created concerns regarding potential hiring biases against women of marriageable age.

• Beyond Motherhood: The Act touches upon the “Social Insurance Model,” suggesting that parenting should be a shared responsibility between both parents and supported by the government, similar to Nordic countries.

• Insurance Integration: For firms already providing group health insurance, this Act necessitates a review of maternity riders to ensure they align with the increased recovery time and associated medical needs.

Impact on employees

• Stress-free motherhood: It helps to ensure that women are returning to the workplace more comfortably after the delivery and settling-in of the newborn baby at the home front.
• Lower female mortality rate: The bill will ensure a positive impact on the health of the mother and thus, lower the female mortality rates. As new mothers get enough time, they can take good care of themselves and their newborns.
• Flexible working hours: On the basis of the nature of work, women employees will get work from home option after the expiry of 26 weeks’ leave tenure on terms mutually decided with the employer.

Thanks to the Maternity Amendment Bill, there is an increase in the number of women wishing to work. Many of these deterred from doing it in the absence of maternity leave benefits. Also, the bill has made a provision for paternity leave policy as well.

Impact on employers

While, on the one hand, the maternity amendment bill encourages women’s participation in the workforce. It also had a major impact on employers as well. The bill continues to encourage an increase in the number of women employed in SME and start-up sectors. Despite the fact that these fields often can’t afford six to nine months of absence of women employees.

It is a harsh reality that the job industry has been male-dominated and has developed a patriarchal approach. It means, women of marriageable age or newly married women were under consideration for key roles and promotions. As per the report published by the International Labour Organisation in 2016, women’s labour force participation in India dropped from 35% to 25% between 2004-11.

As a result, women who are of marriageable age and not yet married, have good chances of employment and growth.

However, it may have a negative impact on a company if their women employees misuse this benefit. By being in employment till they conceive, getting the maternity benefits, and not rejoining after that. It can cause major financial blows to such companies who may have to find replacements.

As the bill has made it mandatory to have a creche facility in every establishment where the number of employees is over 50. It will put extra financial pressure on the company who now has to either start a creche facility or tie-up with nearby creche centres.

For those companies which are already offering group health insurance cover, this new bill puts extra pressure on their finances.

The Final Verdict

While the Maternity Benefit (Amendment) Act is a good move, it is necessary to expand the billing coverage to include unorganised sectors as well. Moreover, the bill should ensure that the burden to provide maternity benefits should not impose on employers only. And would be good if employers shared employees and the government to varying degrees. If exercised properly, the company can attract a talented pool of women employees by offering them exciting benefits. Moreover, even if the company is offering basic coverage of employees’ health insurance, it can expand the gamut of its benefits by making extra provisions for its women employees.

Additional Read: What are maternity benefits available in group health insurance plans?

Summary Table: Maternity Benefit Amendment Act

Most importantly, the maternity amendment bill should have an anti-discrimination clause. In order to ensure that the recipients of the benefits under the bill are not discriminated against on the grounds of sex, pregnancy, family responsibilities in any aspect of employment.

The Scandinavian and Nordic countries adopted a social insurance model. Where the burden of giving benefits is not the responsibility of the employer only. And these nations also recognise parental and paternity leaves along with maternity leaves. The two important lessons for India from the models in these nations is that parenting isn’t only a woman’s responsibility. Therefore, the obligation to support employees with family responsibility should also be shared. In the absence of it, the gender gap is likely to widen.

Frequently Asked Questions (FAQs)

1. Does the 26-week leave apply to a woman’s third child?

A) No. For the third child (and subsequent children), the paid maternity leave remains 12 weeks. The 26-week benefit is reserved for the first two biological children.

2. Can an employer refuse to provide the “Work from Home” option?

A) The “Work from Home” provision is not an absolute right. It depends on the specific nature of the job and must be “mutually agreed” upon between the employer and the employee after the 26-week leave period expires.

3. Is the employer allowed to reduce my salary or position while I am on maternity leave?

A) No. The Act protects the woman’s employment status and salary. It is illegal to terminate an employee or alter her rank/pay because she is availing of her maternity benefits.

4. How does the “Crèche Facility” rule work for remote or field employees?

A) The law mandates the facility for the “establishment.” If an office has 50+ employees, the facility must be provided within a prescribed distance. For remote teams, the application of this rule is still evolving, but the focus remains on the physical workplace location.

5. Does group health insurance cover the salary of the woman on leave?

A) No. Group health insurance covers medical expenses, hospitalization, and delivery costs (if the maternity rider is included). The actual salary for the 26 weeks must be paid directly by the employer as per the statutory requirements of the Act.

About The Author

Mayank Sharma 

MBA Finance

He is a professional who brings extensive knowledge and expertise to the field of group health insurance. He has dedicated 7years to helping individuals and businesses navigate the complexities of insurance. Having worked closely with numerous clients and insurance providers, he deeply understands the nuances of group health insurance policies. With a reputation for providing insightful and informative content, he leverages his industry experience to educate readers about the importance of group health insurance and its benefits. Through their articles, Mayank Sharma aims to empower individuals and businesses to make informed decisions about their healthcare coverage, ultimately promoting healthier and more secure communities.