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Employers need to bear the cost of childcare support, says government

Sharika Nair
1st Nov 2017
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The Ministry of Labour and Employment has clarified that employers have to bear the cost of providing crèche facility in office premises.

Section 11A of the new provision in the Maternity Benefit Act, 1961 had made it compulsory for all organisations with a minimum of either 30 women or 50 employees to have a crèche inside their premises or a tie-up with one within a distance of 500 metres.

In response to an RTI query, the government has confirmed that employers need to bear the complete cost of compliance and providing childcare support to its employees. Before this, the bearer of the cost was not addressed in the Maternity Benefit Act.

One of the KLAY daycare centres that tie up with corporates

Priya Krishnan, Founder & CEO, Founding Years Learning Solutions, a large corporate-sponsored daycare chain, expresses fears that this decision will backfire. She says, "A legislation that was seen as a boon for the women workforce and which was to help bring more women back to work is turning out to be a significant setback in women employability given the lack of strategic thought that seems to have gone into its roll-out. Through this RTI reply, the government has unfortunately confirmed the long-held fear of the corporates bearing the complete financial burden in complying with the Maternity Benefit Act."

"What this effectively does is that retaining women suddenly becomes a far more expensive proposition for employers. This is particularly disadvantageous to women between 25 and 35 as even before they can make significant progress in their careers, they are seen as a potential financial liability by prospective employers."

"Whereas other countries provide voucher systems and subsidies, it is sad to see that in India, the government has diminished its own role in the larger objective except for mandating companies to implement this, that too mid-financial year."

"Women employability and increasing its attractiveness cannot be solely the employers' responsibility."

However, companies that do offer childcare support see higher satisfaction among female and even several male employees who make use of the same. Vaibhav, who works with Snapdeal, takes his toddler along to work every day since there is a crèche inside his office campus. His wife works with Infosys and convenience was the primary factor behind the decision. Says Vaibhav, “Since I am so accessible to the staff at the crèche, they can call me immediately if there is an issue and so my wife and I don’t feel stressed about leaving our daughter there.”

Vaibhav has to match the crèche’s timing of winding up by 6:30 pm and on days that he has to work late he coordinates with his wife in advance so she can pick the child up.

Apurva Purohit, President of Jagran Group, says,

The reason so many mid-level women employees drop out of the workforce is that they face a lack of childcare support. If organisations can handhold women employees during their transition to motherhood and provide a supportive work environment during those crucial years, fewer women will drop out and we will see better gender diversity while scaling up the corporate ladder.
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