THE Government’s proposals to extend paid maternity leave have been met with a mixed reaction from employers.

The increase of maternity pay from six to nine months by April 2007 could cause difficulties for small businesses, according to the Institute of Directors (IoD)

Alyson Howard, chairman of the Kent branch of the IoD, said: "Members of the IoD already happily subscribe to the principles of ‘family friendly’ policies and flexible working.

"Three-quarters of employers believe it is morally right to have family-friendly practices, because such policies improve productivity, staff-retention, employee recruitment and staff morale.

"What is clear from our own research is that employers want to adopt family friendly policies, not only because it is the right thing to do but also because it makes good business sense.

"That said, businesses, particularly smaller businesses, need much more government assistance to implement these policies.

"We strongly welcome the Government’s proposal to pay maternity pay directly through the Inland Revenue. The IoD has been arguing for this for some time."

Ms Howard also felt an extension of the right to request flexible work from parents with children under six and carers who look after sick or disabled relatives could be manageable, but it would depend on the detail.

She added: "What we must not lose sight of is that implementing these polices does cost small businesses money – often a disproportionate sum given their lesser resources.

"Ultimately, higher costs mean either less profit, or fewer employees - neither a desirable outcome for the economy."