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Trade Unions and ESF Want Raising Wage Limit for Maternity Leave Reimbursement Plan of Government

Staffing firms and trade unions have urged the Indian labour ministry to revise upward the wage ceiling for women employees the government would reimburse for seven weeks of maternity leave. Currently the ministry has proposed to reimburse maternity leave for women earning Rs 15,000 per month, a move that will cost government Rs 400 crore annually.

There have been several instances of retrenchment of women employees or clamping down on women employment by firms afraid of a bloating salary bill after the government extended the period of maternity leave to 26 weeks from the earlier 12 weeks. The demand was voiced by all stakeholders at a tripartite consultation with labour minister on Wednesday saying this would leave many female employees out of the purview of maternity benefits and impact their job prospects as companies were unwilling to bear the burden of a significant increase in maternity pay out after the amendment to the Maternity Benefit Act. 

“This categorisation 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,” Suchita Dutta, executive director of the Indian Staffing Federation (ISF), said.

According to ISF, the EPFO contribution criteria should be limited to three months and government should consider reimbursing paid leave for 14 weeks instead of seven weeks for a period of one year. “This will help companies ease into the change in policy, where eventually government can reduce the compensation percentage over a period of three years,” ISF suggested.

Under the Maternity Benefit (Amendment) Act, 2017, the government extended maternity leave from 12 weeks to 26 weeks with effect from April 1, 2017. Following this, there have been several instances brought to the notice of ministry wherein employers have either retrenched female employees on flimsy grounds or are not hiring too many female workers fearing it will inflate their wage bill, and that these female employees may not join back after availing six months of paid leave.  

While trade unions welcomed the move saying it will ease the burden of employers and bring in some formalisation to the country’s workforce, they share ISF views that the `15,000 monthly salary threshold is not legitimate. “Centre has done a positive thing to share the financial burden of employers on the extended maternity leave. However, we hope the wage ceiling currently fixed at Rs 15,000 in sync with EPFO is revised upwards to bring more women into its fold,” Vrijesh Upadhaya of the Bhartiya Mazdoor Sangh, said. BMS is a trade union affiliates to RSS.

A senior labour ministry official told ET that views of all stakeholders at the tripartite consultation have been taken into consideration and the government would soon finalise the policy in this regard.