Staffing firms and trade unions have urged the Indian labour ministry to revise upward the wage ceiling for women employees the government plans to reimburse for seven weeks of maternity leave. 

Currently, the ministry has proposed to reimburse maternity leave for women earning Rs 15,000 per month. This is expected to cost the government Rs 400 Cr annually. 

The demand was voiced by all stakeholders at a tripartite consultation with the labour minister stating this would leave many female employees out of the purview of maternity benefits as well as impact their job prospects as companies were reluctant to bear the burden of a significant increase in maternity payout after the amendment to the Maternity Benefit Act.  

Suchita Dutta, executive director of the Indian Staffing Federation (ISF), stated, “This categorization is even lower than the current ESIC coverage limit. Women employment is largely being impacted above the threshold of ESIC limit, thus the consideration should be for the women in the salary range of at least up to Rs 40,000.” 

As per ISF, the EPFO contribution criteria should be limited to three months and the government should consider reimbursing paid leave for 14 weeks instead of seven weeks for a period of one year. This move will help companies ease into the change in policy, as per the organization.

The government extended maternity leave from 12 weeks to 26 weeks with effect from April 1, 2017, under the Maternity Benefit (Amendment) Act, 2017. Post that, several instances have been brought to the ministry’s notice wherein employers have either retrenched female employees on flimsy grounds or are shying from hiring too many female workers for fear of inflating their wage bill. They are also plagued with concerns that these female employees may not join back after availing six months of paid leave. 

The trade unions have welcomed the government’s move to reimburse maternity leave for women earning Rs 15,000 per month, but support ISF’s views on revising the wage ceiling currently fixed at Rs 15,000 in sync with EPFO. The government’s proposed move would indeed bring a measure of relief to companies but it needs to look at widening the net to make it impactful.