No labour welfare cess exists, govt budget to reimburse maternity leave pay: Labour Min

New Delhi: The Labour Ministry Friday said there is a proposal to pay employers for extended maternity benefit from government budget and not from any labour welfare cess as it does not exist.

On Thursday, Women and Child Development Secretary Rakesh Srivastava had said the government will give employers the salaries for seven of the 26 weeks of maternity leave under "Labour Welfare Cess" for women earning more than Rs 15,000 a month.

The Labour Ministry said there is a proposal to pay employers for extended maternity benefit from government budget. "There are some media reports that this scheme has been approved/notified. However, it is clarified that 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 a labour welfare cess is also incorrect, as no such cess exists under this ministry," a Labour Ministry statement said.

According to the statement, the ministry is working on an incentive scheme wherein seven weeks' wages would be reimbursed to employers who employ women workers with a wage ceiling of up to Rs 15,000 and provide the maternity benefit of 26 weeks paid leave, subject to certain conditions.

The ministry has estimated that about Rs 400 crore would be the financial implication for the Ministry of Labour and Employment to implement the proposed incentive scheme.

The ministry said the proposed scheme, if approved and implemented, shall ensure the women in this country an equal access to employment and other benefits, along with adequate safety and secure environment. Also, the women shall continue to bear the major share of household work as well as childcare. The workplaces will be more and more responsive to the family needs of the working women.

The ministry noted while the implementation of the provision (26 weeks' maternity leave) 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.