Indian companies aren’t hiring women to avoid ‘maternity leave’ liability: Study

  • Over 12 million women across all sectors in India might not even get jobs because of maternity leaves policy.
  • Since employers, especially of small businesses, incur huge costs due to maternity leaves, they choose to hire men instead.
  • Tax benefits, amnesty schemes or additional benefits provided by the government could encourage employers to hire more women. But that’s a work in progress.
According to a study done by TeamLease, 1.1 to 1.8 million women (across 10 key sectors) might not even get jobs in the 2018-19 fiscal year as employers do not find maternity leaves and benefits feasible.

This figure is even higher than the average annual attrition rate of the women employees. The study was conducted with about 300 employees across 10 key sectors - aviation, BPO/ITeS, real estate, education, e-commerce, BFSI, IT, manufacturing, retail and tourism. If the job loss is estimated across all employable sectors, the number of women who don’t get employment this fiscal year would go up to 12 million.

The Maternity Benefit (Amendment) Act, which entitled Indian working mothers to get maternity leave, was passed in 2017. Since it was aimed at making women stay at their workplace even after childbirth, it gave women 26 weeks of paid leave right from the early 12th week of pregnancy. Though the Act was well intended, the results did not work out well for the women. Post the passing of the Act, there was a 10% dip in women employees in the total workforce - from 37% in 2005 to 27% in 2013. And this is expected to decrease even further in 2018-19.

So, how did a well-meaning Act turn the odds against the very people it was meant for?

For obvious reasons, the employers are more concerned about the cost implications this ‘inclusive policy’ entails. Not only does the employee need to be paid for 26 weeks of no work, a temporary substitute also needs to be brought in to get the work done. The costs just don’t add up in the benefits column for most employers.

While large and medium enterprises were still able to make numbers works, the number of women employees in small businesses plummeted - the money simply isn’t enough.


The Act was passed to also make sure that women come back to their work places after the long break and manage to stay in the game despite the fast-changing work patterns and markets. However, the reverse was happening. Joining after a long hiatus usually lead to their career taking a blow.

According to a report by Strategy&, India had one of the highest rates of economic gender disparity in 2012. Nearly 5.5 million women enter the workforce every year, but many are forced to leave their jobs due to gender discrimination, lack of childcare support and no maternity leaves. However, as per Forbes, a number of Indian startups are working towards enabling women to return to work after maternity breaks. While it is a good start, it is not enough.

The TeamLease co-founder, VP Rituparna Chakraborty told Times of India that in his opinion, to decrease the gender gap in the labour market, the government needs to give employers an incentive to hire women. Tax benefits, amnesty schemes or additional benefits provided by the government could encourage employers to hire more women and actually help the process.