Understanding Average Salary for Maternity Leave: What Should Be Included in India?

Dear Seniors,

I have posted this issue so many times but I didn't get a reply so far. According to maternity law, the policy states that if an employee has worked in a company for not less than 80 days, then the employer has to provide average pay for the 12 weeks. I want to know what the average pay is. I have checked that most companies in India pay the full salary without any deductions, but as per policy, what is the exact criteria for payment?

For example, if the basic salary is 3900, HRA is 3000, Conveyance is 800, Special Allowance is 1200, and Education Allowance is 100, totaling 10000, what is the average salary/pay?

Please help me with this.

Dear Ramya,

For example, if the basic salary is 3900, HRA is 3000, Conveyance is 800, Special Allowance is 1200, and Education Allowance is 100, totaling 10000, what is the average salary/pay?

The employer has to pay the full salary, i.e., Rs. 10,000, to the employee for the period she is eligible for.

Regards,
Surya Mukherjee

Dear Ms. Surya Mukherjee,

Thank you for your immediate response. Why is it stated as "Average Pay" in the policy? Does "avg pay" mean the full salary?

Regards,
Ramya Shankar

Hi Ramya,

When you are providing the salary components [basic - 3900, HRA - 3000, Cony - 800, Special Allow. - 1200, Edu. Allow. - 100 = 10000], you are assuming it to be constant during the period. What if the HRA or Conveyance was variable during her earlier tenure with the organization? Average has been used here so that in case there is a dispute regarding the breakup and determination of payment for the Maternity leave period, the same can be resolved by "Average" payout. To be precise - We pay the full salary to avoid any dispute of Payment of Wages. Play safe.

Meraj

For the purposes of paying maternity benefit to a woman worker, the average daily wages mean the average of the woman's wages payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absent herself on account of maternity, or one rupee a day, whichever is higher.

Section 5(2) of the Maternity Benefit Act provides that no woman shall be entitled to maternity benefit unless she has actually worked in an establishment of the employer from whom she claims maternity benefit for a period of not less than one hundred and sixty days in the twelve months immediately preceding the date of her expected delivery.

Dear Friends,

In the Indian Labour Act, 'the mean Average Pay' is not clearly mentioned. However, according to the Minimum Wages Act, the respective state Governments may fix the Minimum Wages according to their Official Gazette Notifications. The Contract Labour Act (R&A) also states the same. We have to follow the acts accordingly. If any organization is paying more than the stipulated minimum wages, the Labour Department may not object. Internally (according to your organization chart), while fixing the Salaries/Wages, you have to follow the individual cadres, designations, etc., taken into consideration. For example, if one operator in the same cadre is receiving a different salary than another with the same experience, it is not acceptable and not fair.

Furthermore, you may review the Minimum Wages Act, Payment of Wages Act, and Contract Labour Act.

Regards,

PBS KUMAR