Well-meaning gender laws end up hurting women’s jobs, deepening India’s employment paradox

The unemployment rate for individuals aged 15 years and above rose marginally to 5.2 per cent in September from 5.1 per cent in August, but the bigger concern is the disproportionate rise in the joblessness of women. According to the latest Periodic Labor Force Survey (PLFS) released by the Ministry of Statistics, the unemployment rate in rural India increased from 4.3 per cent in August to 4.6 per cent in September, while in urban areas, it rose from 6.7 per cent to 6.8 per cent.

These figures underscore the persistent strain in India’s job market, since the government’s incessant boast of India being the fastest-growing major economy has failed to result in a boom for job seekers.

The situation is especially grim for women. In urban regions, the unemployment rate among women increased to 9.3 per cent in September from 8.9 per cent a month earlier, while for men it rose slightly to 6 per cent from 5.9 per cent.

The rural story is similar—unemployment among rural women went up from 5.2 per cent to 5.5 per cent, and among men from 4.5 per cent to 4.7 per cent.

What is striking—and somewhat ironic—is that several well-intentioned, pro-women policy measures appear to have had unintended adverse effects on female employment. These initiatives, designed to empower women and enhance their participation in the workforce, may inadvertently discourage employers from hiring them, especially in smaller or less profitable firms.

A notable example is the 2017 amendment to the Maternity Benefit Act, which extended employer-paid maternity leave from 12 weeks to 26 weeks. While the move was hailed as a progressive step toward supporting working mothers, emerging research suggests that it has led to unintended hiring biases against women.

A study in February, funded by the US National Science Foundation (NSF), titled ‘Does Employer-Paid, Job-Protected Maternity Leave Help or Hurt Female IT Workers?,’ found that after the amendment was implemented, women were about 22 per cent less likely to receive interview calls from less profitable companies. Smaller firms, in particular, were reluctant to absorb the financial burden of extended maternity leave, resulting in a quiet, but measurable exclusion of women from hiring pipelines.

This finding highlights a structural problem: in the absence of shared responsibility between employers and the state, the cost of gender-inclusive policies often deters companies from hiring women.

Unlike in many developed economies, where the government partially funds maternity benefits, in India, the financial responsibility lies almost entirely with the employer. Consequently, rather than encouraging inclusion, such policies may inadvertently reinforce gender bias in hiring decisions.

Adding to this complex landscape is the unintended fallout of workplace safety regulations. Anecdotal evidence indicates that the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, while crucial for ensuring safe and dignified work environments, has in some cases made employers—especially in smaller firms—wary of hiring women, fearing compliance burdens or potential legal complications.

These developments point to a sobering paradox in India’s labour market: laws meant to empower women may, in practice, be curbing their employment prospects.

This does not imply that such protections are unnecessary, but that their implementation framework needs recalibration. Shared-cost models, government reimbursements for maternity benefits, and awareness programmes to counter hiring biases could help restore balance.