The Ministry of Labour & Employment recently provided important clarifications about the Maternity Leave Incentive Scheme. There had been a few media stories suggesting that this scheme has been approved or notified. Nevertheless, the ministry has stated that it is still in the process of obtaining the necessary budgetary grant and approvals from competent authorities for this scheme to become a reality. In addition, the reports claiming that the scheme will be financed by the Labour Welfare Cess were also discredited, as no such cess exists under this ministry.
The Role of The Building and Other Construction Workers’ Welfare Cess (BOCW) Act
Contrary to some misconceptions, the BOCW Act of 1996 is responsible for the collection of cess for construction workers. This takes place at the state and union territory levels. The collected ces is then handed over to the State Welfare Boards. However, it is essential for states and union territories to ensure that the welfare schemes funded by the cess fund are exclusively for building and other construction workers. Any diversion of the cess fund for the welfare of workers in other categories is impermissible under the BOCW Act.
Background of the Maternity Benefit Act
The Maternity Benefit Act of 1961 is applicable to entities employing ten or more individuals across various sectors including factories, plantations, shops, other establishments, and mines. The key intent of this Act is to regulate the employment of women during specific periods pre and post childbirth, and to provide maternity benefits along with certain other perks. One significant amendment to the Act was made through the Maternity Benefit (Amendment) Act, 2017. Among other things, this amendment increased the paid maternity leave for female employees from 12 weeks to 26 weeks. However, while public sector adheres to this provision strictly, the private sector and contract jobs often fall short.
The Perception of Extended Maternity Leave
There’s a widespread belief that private companies are not keen on hiring female employees because they may have to provide them with maternity benefits, especially the 26 weeks of paid leave. Consequently, extended maternity leave is often seen as a hindrance for female employees who are then forced to quit or laid off on trivial grounds before they go on maternity leave.
Proposed Solution by The Ministry of Labour & Employment
In response to this issue, the Ministry of Labour & Employment is contemplating an incentive scheme. Under this scheme, employers who employ female workers with wage ceilings up to Rs. 15000/-, and provide the full 26 weeks of paid maternity leave, could have seven weeks’ wages reimbursed subject to certain conditions.
Impact of The Proposed Scheme
If approved and implemented, this proposed Scheme would ensure equal access to employment and other approved benefits for women across the country, as well as offering a safe and secure working environment. It would also make workplaces more responsive to the family needs of working women.
Some Facts about Maternity Benefits in India
| S.No | Fact |
|---|---|
| 1. | The Maternity Benefit Act applies to establishments employing 10 or more persons. |
| 2. | Under the 2017 amendment, paid maternity leave was extended from 12 weeks to 26 weeks. |
| 3. | The proposed incentive scheme will reimburse employers 7 weeks’ wages if they provide the full 26 weeks paid maternity leave to female employees with wage ceilings up to Rs. 15,000/- |
