Reading Time: 5 minutes

The Maternity Benefit (Amendment) Act 2016 was widely hailed as a historic step at the time of its enactment. The Amendment doubled the paid maternity leave entitlement from 12 to 26 weeks for all women in establishments with greater than 10 employees. It also mandated that crèche facilities be provided within a prescribed distance, and women be allowed upto four visits a day to the crèche. Women getting longer paid leave, and consequently greater job security, is a positive development, particularly for the health of both the mother and child.

Figure 1: Cost differential between prospective male and female employee

However, the Amendment places the entire onus of the increased maternity leave, as well as of the cost of crèches on the employer. The impact? A recent report by TeamLease has estimated net job losses of about 12 million for women in the year 2018-19, solely attributable to this Amendment.

Consider the choice of a prospective employer, especially if male and female candidates possess similar experience and educational qualifications. While the cost of hiring a male candidate would largely be restricted to salary and other statutory benefits, for women the incremental cost to company includes the 26 weeks of paid maternity leave, cost of creating crèches, as well as the cost of a temporary employee who would need to be hired to fill the gap in the female employee’s absence of nearly six months. The likely consequences of this decision would mean a reduction in employment opportunities for women in the formal economy, as is beginning to occur. The balance is tilted firmly in favour of hiring men (figure 1).

International comparison

India is the only BRICS economy where there is no paternity or shared parental leave. Further, in each of the BRICS economies, barring India, the cost of parental leave is borne by the government, through social security programmes, rebates in federal or state taxes. Russia stands out as it allows almost 146 weeks of shared parental leave, even though this is partially paid. A comparison of India’s parental leave regime with the BRICS economies is presented below.

Source: World Bank (wbl.worldbank.org)
Figure 3: Parental leave in BRICS countries (days)

 

A similar result is seen when comparing with selected developed economies. Though India now offers one of the longest maternity leaves even amongst this group, unlike them, it places the cost entirely on the employer, and offers no paternity or parental leave, thereby increasing the cost of female labour to private sector.

Figure 4: Comparison with developed economies – parental leave (days)

 

Therefore, two key differences stand out when comparing the regulatory regime in India with the BRICS countries, or with developed economies:

The Paternity Benefit Bill, 2017

Given this context, the introduction of the Paternity Benefits Bill in the Parliament in July 2017 is certainly a welcome development. Three features of the Bill stand out. First, the Bill suggests that men in both the formal and informal sector should be entitled to paternity leave of upto 15 days, which can be availed in the first three months of the newborn’s birth. Second, the Bill suggests setting up a Parental Benefit Scheme Fund in which all employees (irrespective of gender), employers, and Central Government would make a defined contribution to finance the paternity leave. And third, the Bill mandates that men be permitted upto four visits per day to crèche facilities created in proximity to their workplace.

The Bill is, undoubtedly, much-needed and well-intentioned as it seeks to break the stereotypical notion that the responsibility of child-care lies solely on women, and aims to normalise the concept of fatherhood. It recognises that a child may go to a crèche located in the vicinity of the father’s workplace, and that the father may also want to have the option of going and checking on his child at the crèche during the day.

Unfortunately, however, the Bill does not go far enough in correcting the imbalance created by the Maternity (Amendment) Act 2016. Firstly, the duration of 15 days of paternity leaves is a pittance, compared to the six months for maternity leave. Secondly, the Parental Benefit Scheme Fund proposed under the Bill requires a contribution from both male and female employees, employers as well as the Government, however, its proceeds would not be used to cover maternity leave. Thus, women would continue to remain worse off in terms of their competitive position in the labour market, vis-à-vis their male counterparts, even after the enactment of this Bill.

Recommendations

While offering increased maternity leave, and then subsequently proposing a short paternity leave may be well-intentioned concepts, they seem more like knee-jerk reactions. It does not appear as though the long-term implications of either the Maternity (Amendment) Act 2016, or the Paternity Bill 2017 have been studied. There is a need to have extensive consultations with representatives of formal and informal enterprises, employee unions, as well as women’s groups to actually understand how a sophisticated, forward-looking legislation can be developed to support families with child-care.

One of the ideas on which should be discussed is the concept of parental leave. Following the example of Norway and Sweden, the distinction between maternity and paternity leave should be dropped, in the following manner:

• The law should entitle parents to shared leave, which can be split between a couple in the way they choose, rather than mandating 6 months for mothers or 15 days for fathers.

• While the onus of financing could continue to remain on employers, the respective employers of the couple should share the total cost of the parental leave, even if all the leave is availed by one spouse. The total cost should be calculated based on the wife’s annual earnings, as per the present law. For instance, assume that 26 weeks of paid parental leave is offered as per the law, and this is availed entirely by the wife. Then, even in that case, the husband’s company should bear 50% of the total cost of the leave.

• Alternatively, if a Parental Benefit Scheme Fund is being proposed, it should be used to finance shared parental leave, as opposed to solely paternity leave. Further, in line with the current scenario and international best practices, employer contribution should form the maximum share of this Fund, with employee contribution being the smallest component, as parental leave is a statutory benefit.

Conclusion

By restricting the ‘benefits’ of parental leave and crèches only to women, the law effectively places the onus of children’s upbringing squarely on women, glorifying the ‘double-burden’ and ‘effective multitasking’ that they must undertake, as men are not compensated for sharing the load at home.

The law needs to lead society in recognising that child-care is not the mother’s responsibility alone. The Paternity Benefits Bill 2017 is a step in this direction. However, it does not go far enough in correcting the imbalance that women face in the labour market, and even after the enactment of this Bill, women are likely to find themselves in a weak bargaining position. Therefore, there is a need for increased parity, and concepts such as shared parental leave are a necessity to prevent women from being disadvantaged and to ensure that there is a continued movement towards sharing the responsibilities of child-care.

Author’s note: This article has not accounted for the implications on single parents, particularly single fathers, or same-sex couples, as I do not find myself to be qualified to comment on their situation. However, given the reinforcement of gender norms in this law, I would imagine the detrimental impact would be magnified.

About the author: Mitali Nikore is a New Delhi based economist, focusing on infrastructure development and public-private partnerships across transport, urban and skills development sectors. She completed her master’s degree in Economics at LSE in 2012, and has since advised the United Nations, the World Bank, the Asian Development Bank, and PricewaterhouseCoopers India.

An older version of this article has been featured on South Asia at LSE blog.

Share on facebook
Share on google
Share on twitter
Share on linkedin