Parental Leave Benefits That Help SMEs Retain Talent

Frequently asked questions

A useful parental leave policy India framework starts by separating legal maternity obligations from benefits an employer chooses to add. Indian SMEs should first meet the statutory requirements for eligible women, then consider inclusive paid leave for fathers, partners and adoptive parents, supported by flexible work, a structured return plan, mental-wellness access and appropriate family health cover. This approach makes the policy easier to understand, budget and apply consistently.

Why parental support is now an SME retention priority

Becoming a parent changes an employee's schedule, finances and care responsibilities at the same time. An unclear policy adds avoidable uncertainty: employees may not know how much leave they can take, whether their role will change, or what support will be available when they return.

Small companies may assume that meaningful parental benefits require a large HR budget. In practice, clarity and consistency can matter as much as an extensive leave allowance. A short written policy, predictable manager behaviour and a sensible return plan can prevent employees from having to negotiate every arrangement individually.

Parental support should also be designed as a team process. A planned handover, temporary redistribution of work and documented return date are less disruptive than an informal arrangement made shortly before leave. They also help prevent colleagues from treating parental leave as an unexpected favour.

The Ministry of Labour and Employment's January 2024 advisory encouraged family-friendly measures such as paternity leave, parental leave, family emergency leave and flexible working arrangements. These were presented as employer practices that can help balance paid work and care responsibilities, rather than as a universal private-sector leave entitlement. The advisory was described in a Press Information Bureau release published on 28 March 2025.

What Indian employers must provide and what they can choose to add

India's four labour codes, including the Code on Social Security, 2020, took effect on 21 November 2025, according to the Ministry of Labour and Employment's official year-end review published on 30 December 2025. The Code's maternity-benefit chapter now provides the central statutory baseline discussed below.

Mandatory maternity benefits

Chapter VI applies to factories, mines and plantations, as well as shops and establishments that employed at least 10 employees on any day during the preceding 12 months. Appropriate governments can notify additional establishments. This applicability is set out in the Code's First Schedule, effective from 21 November 2025, as reproduced by the Ministry of Labour and Employment.

Under Section 60 of the Code, effective from 21 November 2025, eligibility generally requires the woman to have worked for the employer for at least 80 days during the 12 months before the expected delivery date. The maximum benefit is 26 weeks, with no more than eight weeks before the expected delivery. Where the woman has two or more surviving children, the maximum is 12 weeks, with no more than six weeks before the expected delivery. A woman who legally adopts a child below three months of age, or a commissioning mother, is entitled to 12 weeks from the date the child is handed over. These requirements appear in the official Code on Social Security, 2020.

The same Code, effective from 21 November 2025, provides for paid leave in specified cases involving miscarriage or medical termination of pregnancy, nursing breaks after return until the child reaches 15 months, and protection against dismissal or disadvantageous changes to service conditions during an absence covered by the maternity chapter. Work from home after maternity benefit may be allowed where the role permits it, but the period and conditions must be mutually agreed. It is not an automatic entitlement for every role. Employers should review Sections 60 to 68 in the official Code and obtain professional advice on the rules applicable to their establishment and state.

Establishments covered by the maternity chapter that employ 50 employees, or another number prescribed by the Central Government, must provide access to a crèche within the prescribed distance. The Code permits shared facilities and requires four visits a day, including rest intervals. Section 67 also requires covered establishments to inform every woman, in writing and electronically at appointment, about the maternity benefits available. These requirements have applied under Section 67 of the official Code text since 21 November 2025.

Employer-led parental benefits

The central Code does not create a general paid paternity leave entitlement for private-sector employees. A paternity leave policy for private companies India is therefore usually an employer-designed benefit, subject to employment contracts, applicable rules and any more favourable company terms.

An SME can choose to add:

• Paid leave for fathers and partners
• Leave for adoptive parents beyond the statutory entitlement applicable to eligible adopting mothers
• Leave for a parent following surrogacy
• Family emergency or caregiver leave
• Additional unpaid leave with role protection
• Flexible use of part of the leave during the child's first few months
• Equal or differentiated benefits based on the employer's objectives and budget

Avoid describing all these benefits as “maternity leave”. Use separate definitions for statutory maternity benefit, paternity or partner leave, adoption leave, caregiver leave and any shared parental leave offered by the company.

For a plain-English overview of related requirements and insurance choices, see Healthysure's guide to maternity benefits and insurance coverage.

How to build a practical parental leave policy for a small team

A workable policy does not need many pages. It needs clear answers to the questions employees and managers will actually ask.

1. Define who is covered

State whether the policy covers permanent, probationary, fixed-term and part-time employees. Explain any service requirement for employer-funded benefits separately from statutory eligibility. Include births, adoption and surrogacy arrangements where appropriate.

Use inclusive terms such as “primary caregiver”, “secondary caregiver”, “partner” or “parent” only if you define them precisely. Vague labels can create inconsistent decisions.

2. Separate statutory and company-funded leave

Create a compliance section for statutory maternity benefit and a separate section for additional parental leave. This prevents an employee-led benefit from being confused with the legal minimum or used to reduce it.

For each leave type, specify:

• Total duration
• Paid, partially paid or unpaid status
• Eligibility and required documents
• Earliest and latest dates for taking leave
• Whether leave must be continuous
• Whether unused leave expires
• Treatment of public holidays and weekends
• Interaction with earned, sick or unpaid leave

3. Choose a benefit the company can sustain

A modest paid benefit applied consistently is better than an ambitious promise that managers discourage employees from using. Model the cost using salary continuation, temporary cover, workload redistribution and expected hiring plans.

If a long paid entitlement is not affordable, consider a combination of fully paid leave, optional unpaid leave and flexible scheduling. Apply the same written decision rules across comparable employees.

4. Create a simple notice and handover process

Ask employees to notify a designated HR contact rather than multiple managers. The process should cover expected dates, payroll, benefits, urgent contact preferences and a written handover. Do not require unnecessary medical or family information.

The handover should identify active work, decision owners, key documents and matters that can wait. It should not require the employee to remain routinely available during leave.

5. Protect career continuity

State how the company will handle role continuity, performance reviews, salary revisions, variable pay and promotion processes. Managers should not assume that a new parent wants fewer responsibilities or is unwilling to travel. Discuss changes directly and document any mutually agreed arrangement.

Benefits that make the return to work easier for new parents

A strong return to work policy after maternity leave begins before the employee comes back. HR should confirm the return date, discuss any statutory nursing-break requirements and ask whether the employee wants to request a temporary adjustment.

Useful low-cost options include:

• A phased return over two to four weeks
• Flexible start and finish times
• Hybrid or remote work where the role permits it
• Temporary reduction in travel or late meetings
• Planned breaks and a private, hygienic space for lactation
• A named HR contact for the first three months
• A manager check-in after the first week and first month
• Meeting notes for important discussions the employee cannot attend

Flexibility should have a review date. For example, a temporary schedule may be approved for eight weeks and reviewed based on the employee's needs and the role's requirements. This gives both sides more certainty than an open-ended verbal arrangement.

Managers also need basic guidance. They should avoid contacting the employee about routine matters during leave, announcing personal information without consent, or making assumptions about commitment. A short manager checklist can be one of the most effective family friendly employee benefits India SMEs introduce.

How group health cover and wellness support can complement leave

Paid leave protects time and income. Health insurance helps with eligible medical expenses. Mental-wellness and teleconsultation benefits improve access to support. These benefits complement one another, but none replaces the employer's statutory obligations.

When reviewing group health insurance for employees, ask how the plan treats maternity expenses, the newborn, pre- and post-hospitalisation costs, family eligibility, waiting periods, sub-limits and mid-year additions. Coverage varies by insurer and selected plan, and all claims remain subject to the policy's terms, exclusions and limits.

An SME designing maternity benefits for employees India should check whether the maternity limit reflects likely use, whether different delivery-related sub-limits apply, and how quickly a newborn must be enrolled. Healthysure's guide to maternity cover in health insurance explains common coverage components, but the final policy schedule and wording should guide every decision.

Wellness support can include confidential counselling, multilingual therapy access, doctor teleconsultations and outpatient benefits. Healthysure lists these among its wellness, teleconsultation and employee insurance options. For new parents, convenient access matters because regular working hours and travel may be difficult during the first months.

Do not present an employee assistance programme as a substitute for clinical care or statutory leave. Communicate whether the service is confidential, who provides it, how employees access it and whether family members are included.

A simple rollout checklist for founders and HR teams

Use this checklist before publishing or renewing the policy:

1. Confirm legal coverage. Check headcount, establishment type, state requirements and which employees receive statutory maternity benefits.
2. Map current practices. Review employment contracts, leave rules, payroll processes and any informal manager commitments.
3. Set the benefit design. Define paid and unpaid leave for each eligible parent or caregiver category.
4. Cost the policy. Include salary continuation, temporary staffing, insurance changes and administrative work.
5. Write clear definitions. Explain birth, adoption, surrogacy, parent, partner, caregiver and continuous leave where relevant.
6. Document the process. Identify the HR contact, notice requirements, forms, approval timeline and payroll treatment.
7. Build a return plan. Include flexibility requests, role continuity, nursing breaks where applicable and scheduled check-ins.
8. Review health cover. Check maternity limits, newborn enrolment, family definitions, exclusions and claims support.
9. Train managers. Give them a one-page guide on privacy, handovers, contact during leave and return conversations.
10. Communicate to everyone. Publish the policy in the handbook and explain it during onboarding, not only when an employee announces a pregnancy.
11. Review annually. Track usage, employee questions, operational issues and whether the policy is producing consistent decisions.

Growing companies that need help coordinating insurance and wellness benefits can explore benefits support for growing teams.

FAQs: parental leave policies for private companies in India

Is parental leave mandatory for private companies in India?

Statutory maternity benefits are mandatory for eligible women in establishments covered by Chapter VI of the Code on Social Security, 2020, effective from 21 November 2025. The central Code does not establish a general paid parental or paternity entitlement for every private-sector employee. Companies may voluntarily add broader parental benefits. See the official Code and its First Schedule.

How much maternity leave must an eligible employee receive?

Under Section 60, effective from 21 November 2025, the maximum is generally 26 weeks for an eligible woman with fewer than two surviving children. It is 12 weeks where she has two or more surviving children. The Code also specifies a 12-week benefit for an eligible adopting mother of a child below three months and for a commissioning mother. Eligibility and timing conditions apply under the Code on Social Security, 2020.

What is a reasonable paternity leave policy for a small company?

There is no single duration suitable for every SME. Start with a paid block the business can provide consistently, define the notice process and consider allowing some leave to be used flexibly during the first few months. Review the benefit as the company grows.

Can group health insurance replace paid maternity leave?

No. Statutory maternity benefit concerns eligible wages and protected absence, while insurance covers eligible medical expenses under the policy. Employers should manage both separately.

Should parental leave be available during probation?

The company can define eligibility for its additional employer-funded leave, subject to applicable law and contractual terms. Statutory maternity eligibility should not be replaced by a probation rule. Under Section 60 of the Code, effective from 21 November 2025, the central eligibility test generally concerns at least 80 days of work during the 12 months before the expected delivery. See the official Code.

Build a family-friendly benefits package around group health cover and wellness support. Get a group health quote for your team.