Labour Law & Hr Consultant
Industrial Relations And Labour Laws
Sagar Gulani
Hr Manager
Sr. Hr Exe
Your Friend
Hr Executive
+1 Other

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Dear Seniors,
One of our employees will be going on maternity leave soon. Her salary have two compenent: Fixed CTC and Variable CTC. While Fix CTC is basic HRA, TA etc. VCTC is like target based incentives paid monthly & payment varies based on slab L1, L2, L3 acheived based on revenue target met that particular month.
Now my question is will she be paid fixed CTC during leave period or variable also. And of variable is paid then based on what slab (Highest/lowest).
It would be great if you can elaborate your answers with thought behind it and section of Act if any.

If a person goes on authorised leave with wages, the leave salary would comprise of only the basic, D.A and other fixed allowances and not any monies relatable to performance. Maternity benefits include the average wages the woman would have earned but for the leave of absence due to maternity as described u/s 5(1) as well as other benefits conferred under the Maternity Benefit Act,1961. Therefore, the variables relatable to actual performance need not be taken into account for payment of wages for the leave of absence due to maternity.
Thank you sir Umakanthan.M. Even I felt so, but confusion is In maternity act where wages is defined it is written it inculdes 'incentive bonus' but not other bonus. And this 'incentive bonus' is confusing me. What does this term means. Can monthly target based performance based pay fall in this category or treated as any other bonus? As she won't be meeting any performance based targets in this duration.
I would really appreciate insights on this.
Extract of act:
(n) "wages" means all remuneration paid or payable in cash to a woman, if the terms of the contract of employment, express or implied, were fulfilled and includes-- (1) such cash allowances (including dearness allowance and house rent allowance) as a woman is for the time being entitled to;
(2) incentive bonus; and
(3) the money value of the concessional supply of foodgrains and other articles, but does not include--
(i) any bonus other than incentive bonus;

Seniors, pls share your knowledge on this.
Dear Anonymous, Over thinking will create problems which are not even there. Umakant Sir gave perfect answer. Please consider it. Regards, Sagar Gulani 9974646108
Dear Anonymous, Umakanthan sir has given perfect answer, so just go with it. VCTC can not be part of Maternity.
In my openion, incentive bonus which mentioned in the act refers to the Incentive amount linked to the performance of the company. For example production incentive to workers, even though she is has no role in achieving the production inventive target, still she will be eligible for Incentive pay.
Srikanth V

In my view Incentive Bonus is nothing but Production Bonus. Production Bonus can be fixed or variable amount depending upon production. The incentive bonus mentioned in the Maternity Benefits Act refers to fixed incentive which is available to all employees who were personally or physically present for production. Normally, an employee on authorised leave will be treated as present and as such they would also be entitled to production incentive unless otherwise agreed upon as part of settlement or contract of employment.
If your policy provides for any minimum incentive or the criteria for any of the slabs is met by her even when she is on maternity leave, thrn VCTC will have to be paid to that extent, otherwise not.
- Shobhit Mittal
Industrial & Labour Law Advisor

8077779793, 9319956443

I also have no way to resolve that case for one of my employees visit here

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