Incentive scheme for maternity benefits in the works: LabourMin denies WCD claim on welfare cess fund usehttps://indianexpress.com/article/india/govt-to-refund-employers-for-7-weeks-maternity-leave-given-to-employees-women-and-child-development-ministry-5448547/

Incentive scheme for maternity benefits in the works: LabourMin denies WCD claim on welfare cess fund use

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.

Govt to refund employers for seven weeks of maternity leave given to employees: WCD
WCD Secretary Rakesh Srivastava said it has been decided to utilise the funds lying in the labour welfare cess to pay the employers. (File)

The Ministry of Labour and Employment on Friday in a clarification stated that though the ministry is working on an incentive scheme wherein 7 weeks’ wages would be reimbursed to employers who hire female workers with wages up to Rs 15,000 and provide the maternity benefit of 26 weeks paid leave, it is still in the process of obtaining necessary budgetary grant and approvals. It denied that the scheme will be funded from Labour Welfare Cess, saying that “no such cess exists under this Ministry”.

The Labour Ministry statement added that the financial implication is estimated to be approximately Rs 400 crore for implementing the proposed scheme. “There are some media reports that this scheme has been approved/notified. However, it is clarified that Ministry of Labour & 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 such cess exists under this Ministry,” the clarification said.

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. “The utilisation of the labour welfare cess lying with the state governments has been very less. After talks with the Labour Ministry it has been decided that the seven of the 26 weeks of maternity leave for all women employees in the private and government sector getting more than Rs 15,000 a month would be paid from that fund,” news agency PTI had quoted Srivastava as saying.

The Building and Other Construction Workers’ Welfare Cess (BOCW) Act provides for collection of cess for construction workers by states/union territories. As per a Lok Sabha reply by Labour and Employment Minister Santosh Kumar Gangwar in March this year, approximately Rs 39,152 crore has been collected by the states/ UTs under the Building and Other Construction Workers’ Welfare Cess Act, 1996, up to December 31, 2017, out of which Rs 10,123 crore has been spent. The unutilised amount of cess lying with the States/UTs as on December 31, 2017 is approximately Rs 29,029 crore.

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The states/UTs are required that the welfare schemes funded from cess fund should be exclusively for building and other construction workers only. Diversion of cess fund for welfare of other category of workers is not permissible under the BOCW Act.

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

The Labour Ministry said that it has proposed the scheme after it received “several representations before the Labour Ministry on how the extended maternity leave has become a deterrent for female employees who are asked to quit or retrenched on flimsy grounds before they go on maternity leave”. “While the implementation of the provision is good in public sector, there are reports that it is not good in private sector and in contract jobs. There is also a wide perception that private entities are not encouraging women employees because if they are employed, they may have to provide maternity benefit to them, particularly 26 weeks of paid holiday,” it said.