Article: Managing the Maternity Benefit Amendment Act 2017


Managing the Maternity Benefit Amendment Act 2017

ProEves Managing the Maternity Benefit (Amendment) Act 2017 Survey aims to capture market practices with respect to how companies are complying with the Act. Read on to know more.
Managing the Maternity Benefit Amendment Act 2017

The Maternity Benefit (Amendment) Act 2017 is a landmark Act which has placed India amongst the league of progressive, developed countries with respect to maternity benefits. It not only extends the maternity leave benefit period but also introduces leave for adopting and commissioning mother's work from home provision, crèche facility, nursing provisions and notification of these benefits.

While some of the changes are quite clear, there are some provisions which require clarity. ProEves Managing the Maternity Benefit (Amendment) Act 2017 Survey aims to capture market practices with respect to how companies are complying with the Act. It is a comprehensive study across 70 organizations covering various sectors like FMCG, IT, manufacturing, ITES, eCommerce, retail, financial services making this study the single largest study on maternity, childcare and parental support practices in India. 

Most companies are taking the amendments positively, as the policy changes will help in achieving a gender balanced workforce which is a priority for companies. Working parents is an increasing pie of the working population and enabling provisions likes crèche facility, work from home support will not only help the women on maternity but also today’s working parents. Contrary to the earlier negative reactions, in our survey, 67% of the surveyed companies are positive about the new amendments to the Maternity Benefit Act, while 24% are neutral.

With the extended Maternity Leave Benefit period, India now qualifies among the 16 countries having the longest paid leave for new mothers. Countries like Singapore which have 16 weeks of paid leave (8 are funded by the Employer and remaining 8 through public funds) In Australia, Canada the respective maternity leave of (18) and (17) weeks is paid by public funds. In India, the maternity leave funding is an investment into gender diversity that companies are mandated to make. This makes the cost of post maternity loss incredibly high for companies in India, companies should look at spending at least 1% of the cost of post-Maternity Employee loss – in the maternity connect programs to safeguard the investment made in maternity leave. These programs contain a mix of maternity support, professional counseling and overall grooming for the mother to ramp back to work.

The Amendment has introduced a crèche clause which has come as a surprise to many companies. This is the real enabler and a game changer for gender diversity. ProEves as childcare is the no 1 enabler that women want from employers. 81% companies are considering a daycare tie-up (near site, shared set-up, multi-site). With the balance 10% investing an in onsite set up and 9% still to act upon. With Tie ups being the most prevalent approach, companies have to decide on the distance from the daycare centre as such distance needs to be comfortable for employees to pick, drop and nurse the child. For companies with onsite daycare a less than 1 Km distance exists, those with tie-ups are trying to achieve a distance of under 3/3-5 km. 

46% of companies are looking at sharing the cost.  Around 70% of companies looking for a near site tie up are looking at ways of sharing the cost. Quality childcare comes at a premium. Hence to be able to provide for the same companies have to look at a co-pay model. There is no child age cap provided in this Act. However in the absence of any guidelines in this act, companies are complying with the age provision mentioned in The Factories Act where the crèche facility should be provided upto 6 years of age.  For companies that have an Onsite daycare, utilisation is maximum upto the age of 3-4 years, before the kids start going to big school. As far as the market practice prevails amongst the daycare, most daycares take children upto 8 years of age. 

The clarifications to the MB Amendment Act states that companies need to provide for the creche facility wef 1 July 2017.Companies are looking at the April – June quarter for implementing the same. The average time taken from mapping the demand, to centre short listing, SLA finalisation and rolling out the details to companies is 3 – 4 weeks. It is therefore important to ACT NOW. 

Providing for the day-care benefit is a sensitive policy decision. Companies need to ensure that they have done the required checks prior to tie-up. This includes third party audits, checking certifications, having robust Service level agreements, seeking references from moms etc. Its important for companies to demonstrate that they acted appropriately, reasonably, and within the best professional standard when deciding the right partner to avoid liability and costly lawsuits. ProEves provides end to end support to companies’ from Creche shortlisting to audit and  management, and we are surprised with the overwhelming positive response we have got from companies, to do the right thing with respect to childcare  as nobody wants to make any compromises when children are involved 

All surveyed companies are rolling out this benefit in HQ. All manufacturing companies are launching daycare for their factories, (as per the definition of an establishment which covers Factories) as per the MB Amendment Act. 60% of the companies are rolling it out in branches with more than 50 employees. 

The Amendment has introduced an enabling provision relating to “work from home” (WFH) for women, which may be exercised after the expiry of the 26 weeks’ leave period. It is based on the nature of work and mutually agreed by the women employee & the manager. 43% companies already have a WFH policy for all its employees making it an inclusive policy. 36% companies are in the process of drafting such a policy. Workplace of the future is going to be agile, virtually connected with an increasing proportion of Gen Y, women employees & working parents who prefer flexible work arrangements. To make this policy work companies need to equip line managers with standard guidelines on roles that are amenable to work from home and educate employees to ways of working that support this.

The Act obligates the company/ manager to lead the communication around maternity benefits. On an average companies are using at least two different channels of communication either through putting the policy on the intranet and adding the benefits to the offer letter. It is important for the manager to be aware of each clause of the Act, treatment with respect to each clause and companies policies and benefits with respect to Maternity 

With most companies wanting to be inclusive employers, 85% of companies provide paternity leave and support new dads in transitioning to parenthood. Campaigns like #sharetheload (P&G) &#fatherscanbemotherstoo (Snapdeal) emphasise the role of dads. 

Beyond the provisions of the amended Act, companies provide benefits like additional (unpaid) leave, option to move to part time working, workshop for new parents and online maternity care query support.

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Topics: Diversity, #Culture, Employee Engagement

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