Madhu.T.K
Industrial Relations And Labour Laws
Harsh Kumar Mehta
Consultant In Labour Laws/hr
Srinath Sai Ram
Hr Manager
Swati14111
Employee
Rangablack
Private Employee
+4 Others

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Hello,
I am Sabiha, working as a HR for a software company. My doubt is whether we pay ESI and PF for an employee who is on maternity leave. One more doubt is if an employee is on maternity leave since Feb 201, as per the new amendment maternity pay should be paid for 6 months. will that be applicable to her?. Please clarify
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Sorry, in the above query year not typed correctly. If an employee is on maternity leave since Feb 2017?.
1. Dear member, you have raised the issue regarding Maternity Benefit under provisions of ESI Act, 1948 and to inform that perhaps you may be aware that the maternity benefit to the eligible woman employee is to be paid by the branch office of ESIC ( based on certification she may have obtained from ESIS dispensary or ESI Hospital) and not by the employer.
2. The issue regarding entitlement for the MB under said Act is a question of fact and therefore, it will be more better if the woman insured person may contact the appropriate ESIS dispensary, obtain medical certification and contact the concerned branch office of ESIC to which she is attached. I think, appropriate branch office will pay her MB for the period, if she is eligible under said Act.
3. Further when the unit/company has not paid any wages to the woman insured person for her period of MB she obtained from ESIC, then why there should be any contribution under said Act.?
Dear Member
The amendment to Maternity Benefit Act came into effect w.e.f 01/04/2017. Since your employee has already been on maternity leave prior to the effective date of amendment, she is entitled for maternity benefit for 84 days only.
N.LOKANADHA BABU
MANAGER
Dear Sabiha, whether we pay ESI and PF for an employee who is on maternity leave.? Payment made to an Employee under The Maternity Benefit Act, is not Salary.Consequently PF Deduction is not mandatory.The question of deducting ESI also does not arise because, ESI Covered Employees get maternity Benefit from ESI.during that time, they will not work and earn salary.Consequently, the question of deduction of ESI Does not arise.Maternity benefit is to the extent of 26 Weeks, whereas you have mentioned as 6 Months.please frame your question properly befitting the position you are holding.
I do not agree to what Srinath Sai Ram has said that payment made as per Maternity Benefit Act is not salary and therefore, no PF is required to be deducted. If so the maternity days will become non contributory periods which will certainly become negative when pensionable service and amount of pension are calculated. Therefore, if you pay salary to an employee who is not covered by ESI, during the maternity leave period, ie, maternity leave salary, you should deduct PF invariably.

An employee covered by ESI will not receive salary on any day on which she is on ESI leave. PF is deducted on salary paid. When there is no payout why should we think of payment of PF. Therefore, no PF when she is on ESI leave.

The ESIC had incorporated 26 weeks maternity leave with effect from 20th January, 2017 ( I guess).

Madhu.T.K
Dear Mr MADHU, Please peruse the attachment of Judgement wherein it has been held that Maternity Benefit is not Salary

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File Type: docx Maternity Benefit is not Salary.docx (14.3 KB, 530 views)

1. Sir, good judgment as pointed our by Sh. Srinath Sai Ram because the term has been separately defined as "maternity benefit" under section 3(h) of said Act. However, I feel that in respect of payments for miscarriage etc. as mentioned under sections 9, 9A and 10 of said Act, the contributions in respect of EPF will be payable since such payments as mentioned in sections 9,9A and 10 have not been categorised as "maternity benefit" and have been mentioned as "leave with wages".
2. However, I understand that for the period for which such "leave with wages" are paid to the woman insured person, no maternity benefit will be payable under ESI Act, 1948 and rules/regulations framed thereunder (Ref. Section 2(22).
Thanks for sharing the ruling by Bombay High Court. The ruling came in the year 1958 whereas the present Act was passed in 1961, though the main contents of the principal Act 1930 were maintained. Now the highlight of the judgement is not the eligibility of the employee to get leave wages but the authority who ordered payment of wages. I would say that the women had approached the wrong authority, ie, the authority under Payment of Wages Act. It is not disputed that a woman employee is entitled to leave with wages for 84 days (now it has become 26 weeks) and the employer is bound to pay it.

Now coming to the views of PF, we can see that whatever the employee gets while on duty or on leave which have cash value are remuneration which will attract PF contributions. If you are on earned leave for, say, 90 days, you will certainly get full salary for the entire 90 days, or 3 months, but the payment will be made after deducting PF. This is because PF is paid on salary earned while on duty or on leave. At the same time, leave encashment will not attract PF deduction because that is not earned by working or being on leave. Similarly, retrenchment compensation will not attract PF deduction because this is not an amount earned while on duty or on leave.

Therefore, I support that if your employee is paid maternity benefit in the form of salary for certain days/ months, the same should be paid after deducting PF. Certainly, for the amount of medical bonus of Rs 3500, that you pay no need to deduct PF because it is not a salary but a benefit in the form of reimbursement of expenses met by the employee for her prenatal and post natal care.

Madhu.T.K
Dear Madhu Sir, Please find attachment of Definition of Wages as per The Maternity Benefit Act, 1961

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File Type: docx Definition of Wages as per MBA.docx (11.6 KB, 208 views)

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