Extended maternity benefit to be reimbursed from govt budget, not labour welfare cess, clarifies Centre

The government stated that the Ministry of Labour and Employment is in the process of obtaining the necessary budgetary grant and approvals.

The Ministry of Labour and Employment on Friday clarified that the proposal to pay employers for extended maternity benefit is from the government budget and not from any labour welfare cess. The clarification to not utilise the funds out of the Labour Welfare Cess comes a day after Ministry of Women and Child Development (WCD) Secretary Rakesh Srivastava said that it has been decided to utilise the funds lying in the labour welfare cess to pay the employers.

A statement from the Ministry said,

The Ministry of Labour and Employment is in the process of obtaining necessary budgetary grant and approvals of Competent Authorities. The reports that it will be funded from Labour Welfare Cess, is also incorrect, as no cess exists under this Ministry.

The scheme proposes to reimburse the wages to employers who employ women workers with wage ceiling up to Rs 15,000. Further, the women employers will also get maternity benefit of 26 weeks paid leave, reports ANI.

Around Rs 400 crore would be the financial implication for the Labour Ministry for implementing the proposed incentive scheme, it stated.

The Ministry said that if the proposed scheme is approved and implemented, it will ensure the women in the country will get equal access to employment and other approved benefits with adequate safety and security.

The Maternity Benefit Act, 1961, applies to establishments employing 10 or more than 10 persons in factories, mines, plantation, shops & establishments and other entities. The Act's sole purpose is to regulate the employment of women in establishments for a certain period before and after childbirth and also to provide certain other benefits.

The Act was amended through the Maternity Benefit (Amendment) Act, 2017, which, inter alia, has increased the paid maternity leave to women employees from 12 weeks to 26 weeks, reports Business Today.

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