The implications of the extension in maternity leave on micro enterprises

Abstract

Parental leave and maternity leave policies are on the front position of the political agenda of every government. This study investigates the implications of the proposal of the extension in maternity leave as proposed in the Estrela Report, with special reference to micro enterprises. Given that the majority of enterprises in Malta are chiefly micro enterprises, this study provides a better understanding, from the employers' point of view, of both the indirect and direct costs associated with this proposal. A questionnaire was drawn up in order to better assess the effects of this proposal on micro enterprises from the Manufacturing, Wholesale and Retail and Hotels and Restaurants Sectors. The findings suggest that throughout the period of maternity leave, most employers cannot do without hiring a substitute for that particular period. In addition, several employers pay their temporary workers the same wage as the mother who is out on maternity leave. 80% of these micro enterprises claimed that their business encounters a loss in the production for the duration of the maternity leave. Even though the main aim behind this proposal is to boost the female participation rate, 73% of the employers surveyed, of whom 43% were female employers, consider this proposal as a factor hindering female employment. Thus, it could result that an increase in the duration of maternity leave may lead to a decline in the female labour force participation. Training, overtime and advertising costs which are incurred by the employer during the period of maternity leave are also highlighted in this study.