The implications of the extension in maternity leave on micro enterprises : the views of employers

Abstract

This study investigates the implications of the extension in maternity leave as proposed in the Estrela Report, with special reference to Maltese micro enterprises, taking the point of view of employers. Given that the majority of enterprises in Malta are chiefly micro enterprises, this study is intended to assess the direct and indirect costs associated with this proposal. A questionnaire was drawn up in order to better assess the effects of this proposal on micro enterprises in the manufacturing, wholesale and retail and hotels and restaurants sectors. The findings suggest that throughout the period of maternity leave, employers incur costs associated with the payment to the employee on leave, the engagement of a substitute, using overtime work, advertising the vacant job, training the substitute employee and loss of production due to the fact that the new employee would not be as productive as the employee on leave. Even though the main aim behind this proposal is to boost the female participation rate, the extension of maternity leave by six weeks at the expense of the employers could, according to the employers’ survey, hinder female employment, and could also possible lead to a decline in the female labour force participation in Malta.