In India, most large employers flagrantly ignore the legal requirement to provide creches

Nisha Singh made a difficult choice when she decided to quit her job at an auditing firm in Mumbai in June 2019. Her son was about a year old. Neither her family – husband and father-in-law – nor her company offered the support that would have let Singh continue working through the child’s infancy.

The 33-year-old hopes to return to full-time work in a couple of years. “When I rejoin after a gap of four years, I will have to learn a lot because auditing regulations change frequently,” she said.

Singh is among lakhs of women in India who are forced to leave the workforce in order to shoulder motherhood and childcare responsibilities. Women who have at least one child under the age of six have lower participation in the workforce as compared to women with no children, according to the World Bank’s 2017 working paper on motherhood and female employment in urban India.

Female labour force participation in India is the lowest by far among the BRICS nations. Only 21% of the women in India participate in the workforce, as per a 2019 estimate by the International Labour Organization, as compared to 50% in South Africa, 55% in Brazil and Russia and 61% in China. The participation rate, which was relatively steady at around 30% between 1990 and 2005, dropped 11 percentage points from 2005 to 2019.

The Covid-19 pandemic pushed more women out of the workforce, IndiaSpend reported in December 2020. Over one year to November 2020, 13% of women lost their jobs as compared to 2% of men.

India amended the Maternity Benefit Act in 2017 to help boost women’s participation in the workforce without compromising on their role in ensuring adequate crucial early care to their children. The amendment – among other things – doubled maternity leave from 12 weeks to 26 weeks, encouraged companies to allow women to work from home and made it mandatory for companies with more than 50 employees to offer a creche on the premises, with costs to be borne by the employers.

The Ministry of Labour and Employment notified the amendment in the Gazette on March 28, 2017. It came into effect on April 1, 2017, and gave companies three months to set up creches on their premises.

Four years later, there are no official, public data on compliance with the creche provision. India has over 1 million active companies, according to data from the Ministry of Corporate Affairs, but there is no information on how many companies have more than 50 employees.

Through interviews with parents, human resource personnel and consultants, IndiaSpend found that compliance with the mandatory creche clause is limited to larger, multinational companies. Even when facilities are provided, they are often not used.

Some of this has to do with the fact that while the central government has amended the legislation, it is the responsibility of the states to make, enforce and monitor the relevant rules. This has not happened, and hence companies have avoided compliance.

States slow to act

The central government wrote to the states in November 2017 – four months after the deadline –requesting them to frame and notify rules for companies to set up the creche facility.

However, as of May 2020, only Karnataka had notified the maternity benefit rules, the Economic and Political Weekly noted. IndiaSpend has contacted the central labour ministry and the Karnataka state’s labour department for details on compliance and monitoring. This report will be updated if and when we receive a response.

After Karnataka, Tamil Nadu notified the rules in January. The state of Haryana has drafted the rules but has yet to notify them. Maharashtra has included the provision in its Shops and Establishments Act.

“If state governments do not notify the rules, the process [to enforce the amendment] cannot start,” said Pallavi Pareek, founder and CEO of Ungender, a consultancy that helps companies build inclusive workplaces. “In the absence of state rules and notifications, there is no monitoring and this is why companies get away [without complying]. There is no incentive or penalty [on companies to comply]. State guidelines are therefore important.”

A countrywide survey, between April and May 2018, of 255 employers highlights the significance of state guidelines for companies in meeting the goals of the Maternity Benefit Act. Nearly half (46%) of the surveyed employers said they found it “moderately challenging or very challenging” to comply with the creche provision, according to a 2019 report by the International Finance Corporation and Bright Horizons, a consultancy that works with companies to provide work-life support. Close to 43% of employers said that guidelines on setting up of creches would help their organisation meet the creche mandate, the report said.

These guidelines now exist. A few months after the survey was conducted, the Ministry of Women and Child Development issued guidelines in November 2018 on how to set up and run the creches. The guidelines specify aspects that the amendment itself was unclear or vague about. For instance, the guidelines expressly state that the creche facility must be for children “six months to six years” of age, be available to “all employees including temporary, daily wage, consultant and contractual personnel”, and that such a facility must preferably operate on an eight- to 10-hour shift.

There will be no compliance unless the organisations are monitored, say gender diversity and inclusivity consultants. “Until the [central] ministry asks organisations to report on the daycare benefits, the number of working mothers they employ and support offered to them, no organisation will take it [the amendment] seriously,” said Ketika Kapoor, co-founder of ProEves, an aggregator of daycares and preschools.

In September 2020, the Parliament passed the Code on Social Security. The code is an amalgamation of 15 social security laws, including the Maternity Benefit Act, with provisions for companies to pool or use government creche facilities.

“Companies have so far said that they are confused because the laws are in flux, and are now waiting for the wage code rules,” Kapoor told IndiaSpend. “They expect these rules to have other surprises [regarding maternity benefits and creche facilities].”

Gaps and costs

The creche provision in the amendment overlooks the physical and monetary costs of transporting children to and from worksites, negatively affecting the uptake of the provisions, stated a report that examined the impact and implementation challenges of the Maternity Benefit Act. The report was prepared by VV Giri National Labour Institute, an autonomous body under the Ministry of Labour and Employment, between July and September 2018.

Nearly 76% of the employers surveyed in the International Finance Corporation report said that most employee commutes are one hour or longer. When women undertake long commutes to reach their workplaces, they find it difficult to take their child along, pointed out participants in a workshop conducted by VV Giri National Labour Institute in November 2019. Similarly, if a child attends kindergarten/school, parents prefer the childcare facility to be closer to the home and/or school. Given a choice, they would prefer a neighbourhood creche rather than one at the workplace.

While the women and child development ministry guidelines permit neighbourhood creches – within a 500-metre radius of the workplace or in the beneficiaries’ neighbourhood – as a way to comply with the Act, the amendment itself does not state this. Karnataka and Tamil Nadu’s rules do not allow companies to compensate female employees for neighbourhood creche facilities. The states’ rules specify that the creche has to be within 500 metres of the worksite.

Working hours and the capacity of onsite creches are other considerations that the amendment seems to have overlooked. While most company creches have fixed operational timings, employees seldom adhere to strict work hours, and often put in overtime.

“The law is meant to be a guidebook,” said Nirmala Menon, founder and CEO of Interweave Consulting, an inclusion solutions consultancy. “Companies must consider what would be most relevant for their workforce. There will be practical challenges in implementing some of these clauses, but the best thing an organisation can do is imbibe the spirit of the law.”

If onsite creches have limited seats, employees’ children could be put on a waiting list. Ankita Kothari, who works for an IT company in Bengaluru, had to place a request with her organisation in January 2018, months before she even got pregnant. “The office creche has a long waiting list. Some employees have had to wait for nearly two years [to admit their child/children to the creche],” the 33-year-old engineer told IndiaSpend. Her son was born in January 2019.

While Kothari’s case might be exceptional, adding onsite creche facilities adds to company costs. The quality of care and services at the creche also depends on the costs a company is willing to incur, stated the IFC report. Workplaces that do provide crèches are more likely to be a part of multinational companies and tend to be at worksites with larger employee populations, stated the report. Workplace consultants IndiaSpend spoke to said that there is limited compliance among smaller companies, primarily due to the cost factor.

The central government clarified in a response to a Right To Information query that employers have to bear this cost.

To lessen the cost to the employer, especially if few employees want a creche facility, a parliamentary standing committee on labour recommended that companies “may avail common creche facility established by the central government or a state government or a near-by located private facility. The Committee also desires the incorporation of an enabling provision to encourage a cluster of MSMEs to pool their resources for setting up of common creches for the benefit of the desirous employees”.

The Ministry of Child and Welfare Development runs a National Creche Scheme providing daycare facilities to children between six months and six years, in partnership with NGOs. But the scheme is floundering due to delayed payments and funding cuts, IndiaSpend reported in January 2019.

In 2012-’13, 23,785 creches were functioning under the scheme, which dropped by 41% to 11,666 in 2016-’17. As of March 2020, there were 6,453 such creches across the country, a 45% drop over the previous three years.

Low compliance, poor usage

The VV Giri National Labour Institute study, which surveyed 12 IT sector employers in four states – Haryana, Maharashtra, Telangana and Karnataka – found that 75% of the employers had no creche facilities despite staffing more than 50 employees.

In the IFC survey, half (49%) of the employers interviewed had creche facilities, 22% had them before the amendment while 27% set up the facilities after. A further 22% of the employers said that the creche facility is under development and 9% said that it is in the early planning stage.

Of the four provisions in the amended Maternity Benefit Act, compliance was least for the creche mandate and had the highest proportion (21%) of employers stating “yet to consider the implementation” for the creche provision.

IndiaSpend spoke to six human resource executives from six companies with varying employee numbers to understand the demand for, compliance and usage of creche facilities within their organisations. All of them spoke on the condition of anonymity as they did not want to comment on a legal mandate.

Of the six companies, one has 33 employees and so does not have to provide a creche facility. Two companies have around 70 employees, the fourth has 180 employees, the fifth has about 3,000 and the sixth employs nearly 10,000 people.

The companies operate in diverse industries from media and trading to online crowdfunding and life sciences. The companies with more than 1,000 employees have offices in multiple cities across the country while the rest are based in Mumbai.

Two of the six companies – one with 70 employees and one with nearly 10,000 – have an onsite creche. Only the latter’s creche is being used; the former’s employees have children aged over 16. Demand for childcare facilities depends on various factors such as the size, age and gender of the workforce, and the employees’ work and commute times, HR officials said.

“As companies bear the cost of providing these ‘benefits’, they may be less likely to hire women compared to men, provided other things remain equal,” said economist Mitali Nikore of Nikore Associates, a policy design and economics research think-tank.

“On the face of it, the amendments could be a deterrent as costs would go up, especially for a small company/employers because the costs are not subsidised by the government,” said Menon of InterWeave. “But I do think the value or talent these measures would bring to an organisation can be compensated for by the productivity that it will offer. From that perspective, it is worth it [incurring the cost].”

Provisions of the Maternity Benefit Act meant to help women may actually deter employers from employing women, as other gender parity policies have, as IndiaSpend has reported earlier.

Amendments in the Act have “not had an adverse impact on hiring of women at the workplace in the organised sector given the movement around diversity and inclusion”, said Madhumitha Venkataraman, a founding member of Diversity Dialogues, a collective that works in the space of inclusion. “Having said that, this may have had an impact in the small-scale industries.”

Perpetuating the patriarchy

Among other critiques of the policy on daycare, experts point to the absence of a provision for paternity leave, and the fact that only female employees are allowed to visit the creche, which reinforces the belief that children are women’s responsibility.

“By extending maternity leave and offering crèche facilities only to women, the amendment exacerbates the burden of unpaid domestic work and child care that women face within the household,” said Nikore.

“Though some organisations have opened up the creche facilities for all genders, most companies are looking at only women to start with,” said Venkataraman, adding that most men prefer to have their wife avail of the facility at her workplace.

After pay, India scored the least on the parenthood indicator of the World Bank’s Women, Business and Law indicator. The low score is due to a lack of paternity leave and the government’s failure to administer 100% of maternity leave benefits.

Support in pandemic

The Covid-19 pandemic that forced the shutdown of schools, daycare centres and offices has disrupted existing childcare mechanisms, adding to women’s burden.

About 31% of working mothers provided full-time childcare compared to 17% of working fathers in India, according to LinkedIn’s Workforce Confidence Index, a survey of 2,254 working professionals conducted between July and August 2020, when the pandemic was at its peak. Moreover, 46% of working mothers reported working late to make up for work, and 42% were unable to focus on work with their children at home, the survey found.

Many companies, particularly in the IT sector, have instructed their employees to work from home with flexible working hours. Flexible hours invariably mean working all the time, many people that IndiaSpend spoke to said, especially those with parenting responsibilities.

“Since we are working from home, we are expected to be available all the time,” Kothari said. “If I have to cook, my manager will give me time, but ask me to return and finish work later.” Three months into the lockdown, she and her family relocated to Indore so that they could seek their parents’ help in looking after their child.

Given this new reality, employers can be more mindful of their employees’ work-life balance, consultants told IndiaSpend. “Working from home is still work. So support for childcare must continue,” said Menon. Organisations can pay for daycare facilities for employees’ children, she said.

“Reimbursement for nanny services is another way companies can help, especially at this point in the pandemic,” said Venkataraman of Diversity Dialogues.

This article first appeared on IndiaSpend, a data-driven and public-interest journalism non-profit.