Navigating Maternity Leave: What Benefits Can Our Employee Expect Under ESI?

Hi, Our company is located in Chennai. A female staff member joined on 01.12.2010 as a Receptionist. On April 1, 2011, she submitted a leave application for 3 months starting from April 1, 2011, due to pregnancy. Her expected delivery date is in the first week of April 2011, and she has proceeded on leave. She is covered under ESI, and her gross salary is Rs. 9000/- per month.

Kindly clarify the following, as this is the first case of maternity leave we are encountering in our company:

1. Can she claim maternity benefits under ESI? If yes, what benefits will she be eligible to receive?
2. If she is not eligible for ESI benefits and the company has to provide them, what benefits should the company offer her?
3. Is she allowed to take 12 weeks of maternity leave at once?
4. Will the statutory deductions of PF, ESI, etc., be applicable to the maternity benefits if they are to be paid by the company?

Regards,
erv

According to you, the employee joined on 1-12-2010. Whether you have recovered the ESI contribution or not, the ESI Act is applicable to her. She is entitled to maternity leave according to the provisions of the ESI Act.

Eligibility for Maternity Benefits under ESIC

If the concerned employee's ESIC contributions are paid for 70 days in the two immediately preceding contribution periods, then she is eligible for maternity benefits under ESIC. She will be entitled to 12 weeks of paid leave. The company is not supposed to pay her salary for these 12 weeks of leave as it will be paid by the ESIC.

Regards,
Kamal Prasoon Sinha

Hi everyone, I also have one question on maternity leave. Suppose an employee has been working in an organization for 15 years and her salary is 20K. In that case, will she be able to get maternity benefits?

As the employee's salary/wage is more than Rs. 15,000/-, she will not be covered by the provisions of the ESI Act. Therefore, for her to get the maternity benefit under the MB Act, two conditions are to be fulfilled. The first condition is that the MB Act should be applicable to the organization in which the employee works.

Applicability of the MB Act

The MB Act is applicable to factories, mines, plantations, and establishments in which persons are employed for the exhibition of equestrian, acrobatic, and other performances. The MB Act also applies to shops or establishments within the meaning of any law for the time being in force in relation to shops and establishments in a State. If the organization in which the employee works is not covered by the above classification, please check whether in your State the State Government has applied the provisions of the MB Act to that organization. If the organization in which the employee works does not come within any of the above three categories, then the MB Act is not applicable to the organization, and the employee is not entitled to get the benefits of the Act.

Conditions for Maternity Benefits

The second condition is that the employee whom you are referring to should be a woman. If these two conditions are fulfilled, then the employee is entitled to get maternity benefits under the MB Act. There is no salary ceiling.

Regards,

Let me add that she should have worked for at least 80 days during the twelve months immediately preceding the expected date of delivery. This means, even if she has been in service for the last 15 years, if she has not worked for 80 days in the last year, she may not be eligible for maternity benefits. May I hope my interpretation of this clause is correct?

The first benefit period for an ESI-covered woman who joined insurable employment on December 1, 2010, starts only after August 31, 2011. Therefore, she will not receive the benefit of 84 days of leave with salary from the ESIC. However, she can receive medical benefits, which are available to an insured employee from day one of joining.

Now the question is, if the employee is not entitled to maternity leave from ESIC, will it become the responsibility of the employer to provide leave following the Maternity Benefit Act? My opinion is that the employer is not bound to provide maternity benefits since the employee is covered by ESI. It is immaterial for the employer to know whether or not the benefit is available from the ESIC.

We would be glad if V Harikrishna, the retired Labour Commissioner, could provide us with clarification on this point.

Regards,
Madhu.T.K

Dear Mr. Madhu,

Your views on the employee working for 80 days before the expected delivery date to receive the benefits of the MB Act are absolutely correct. The term "actually worked" needs to be interpreted with reference to the explanation in Section 5(2) of the MB Act, and the "number of days worked" should be calculated based on that interpretation.

The distinction between "not entitled to get the maternity benefit under the ESI Act" and "not covered by the ESI Act" is important. If a woman is "not entitled to get the maternity benefit under the ESI Act," it may indicate that she is covered by the ESI Act but cannot receive the benefit due to valid legal reasons. On the other hand, "not covered by the ESI Act" implies that the ESI Act does not apply to her.

If the ESI Act is not applicable, the MB Act automatically applies, and the employer becomes liable. However, if the ESI Act is applicable to the woman but she is not entitled to receive maternity benefits, possibly due to not meeting the 80-day work requirement, then she cannot avail of the benefits under the MB Act. Please refer to Section 5B of the MB Act for more information.

Thank you.

I have a query regarding the calculation of the number of days worked by a female employee to determine her eligibility for maternity benefits. Does the 80-day requirement include Saturdays, Sundays, and other holidays, or is it based solely on the number of working days?

Thanks a lot, Mr. Harikrishnan, for your clarification. 80 days means 80 paid days. Therefore, it includes all off days and holidays for which salary has been paid.

Regards,
Madhu.T.K

I have some doubts about section 5A of the MB Act. The section 5A of the MB Act reads as follows:

"5A Continuance of payment of maternity benefit in certain cases. Every woman entitled to the payment of maternity benefit under this Act shall, notwithstanding the application of the Employees' State Insurance Act, 1948 (34 of 1948), to the factory or other establishment in which she is employed, continue to be so entitled until she becomes qualified to claim maternity benefit under section 50 of that Act."

In our case, the woman joined on 01.12.2010, and she is not entitled to claim Maternity Benefit under the ESI Act. Will she become qualified to claim maternity benefits from the employer under the MB Act as per section 5A of the MB Act?

Please clear my doubt.

Regards,
erv

Eligibility for Maternity Benefits under ESI and Employer Responsibility

Certainly, as per 5A, if a woman under ESI is not qualified to get maternity benefits under the ESI Act, she will receive them from the employer following the provisions of the Maternity Benefit Act. However, subsection (c) of section 5B of the Maternity Benefit Act clarifies that 80 days of work are required to make a woman employee eligible for maternity benefits. This means that a minimum of 80 days of work during the 12 months immediately preceding the date of delivery is mandatory. If she is not qualified to receive benefits from ESI, then it becomes the responsibility of the employer to provide the benefits, provided she has worked for at least 80 days.

Regards,
Madhu.T.K

Hi Everyone, I have recently started working as an HR and am not well-versed with laws. Please help me. In my organization, we have fewer than 10 employees in Bangalore, and a female employee has been working there for the past year, having worked for 80 days in the same year. She went on maternity leave in March 2011. However, there is confusion between me and the management regarding our obligation to provide maternity leave since we do not have 10 employees in the organization. There is also confusion because my company has three organizations, and we have divided the employees in a way that there are fewer than 10 employees. Thank you for your assistance.

Maternity Leave Query

I have a slightly different question regarding maternity benefits. Is it mandatory for a female employee to take these leaves in two parts, i.e., pre-delivery and post-delivery? Can someone claim them all at once? Is there any statutory binding regarding this?

Regards,
Ranjeet

A lady employee can avail the entire leave in one part subsequent to delivery. In such a case, the first day of leave should be the day of delivery. Prior to delivery, the leave availed by her cannot exceed 6 weeks.

For the applicability of the Maternity Benefit Act, there seems to be no employee limit. Therefore, if your establishment is registered under the Factories Act or Shops and Commercial Establishments Act, and if your establishment comes under the purview of the Industrial Disputes Act, then the Maternity Benefit Act will also apply to your establishment. You have to provide maternity leave and benefits (medical bonus) as applicable.

Regards,
Madhu.T.K

The information furnished by you in your post is not sufficient to give an appropriate view on the issue raised. However, I will attempt to answer the query raised by you.

1. Please check whether the organization(s), either separately or together, are covered by the provisions of the ESI Act. If the ESI Act is applicable, the woman employee is entitled to get the maternity benefit under the ESI Act subject to the provisions of the ESI Act. Please remember that if the ESI Act is applicable to your organization(s), then non-recovery of the employee's contribution or the non-remittance of the employer's contribution cannot disentitle the woman employee from getting the benefits under the ESI Act.

2. If the ESI Act is not applicable... In which case the Maternity Benefit Act is applicable, you have not stated in your post as to what is the nature of the establishment(s) referred to by you. In case it is a factory, it is sufficient if it satisfies the definition of the term "factory" as defined under the Factories Act, the MB Act becomes applicable. It may be that your organization(s) satisfy the definition of "factory" as defined under the Factories Act but might not have been registered under the Factories Act. This makes no difference. Failure to register or non-registration as a factory is not the mistake of the employee, and she is entitled to get the benefit of the MB Act. A premises becomes a factory not by registration under the Factories Act, but by coming within the ambit of the definition of the term "factory" as defined under the Factories Act. I presume that your organization(s) are not mines or plantations. In case your organization(s) is either "a shop or establishment within the meaning of any law relating to shops and establishments," then the MB Act becomes applicable if ten or more persons are employed or were employed on any day during the preceding twelve months. [Please see section 2(1)(b) of the MB Act.] So even though as of now, there are fewer than ten employees, please check whether during the past twelve months there were at any point of time ten or more employees. If it be so, then the MB Act becomes applicable from the date on which there were ten or more employees, though the number might have gone down below ten after some time and is below ten even now. Further, please check whether the State Governments in which your organization is situated have extended the provisions of the MB Act to shops or establishments employing less than ten persons. In such a case, the MB Act becomes applicable though the number of employees is less than ten (Please see the proviso to Section 2(1)(b) of the MB Act).

One of my employees has been on our payroll since November 2010 and went on maternity leave starting from June 2011. She was not eligible for ESI maternity benefits as she had not completed nine months preceding her delivery date on June 4, 2011, even though she had worked for 80 days prior to delivery. Is the employer required to pay maternity leave benefits for 84 days since she is covered under ESI?

With regards,
Pravin

Maternity Benefit Act Section 5A Explained

Please see section 5A of the Maternity Benefit Act. I am extracting this section for your benefit. It reads as follows:

5-A Continuance of Payment of Maternity Benefit in certain cases: Every woman entitled to the payment of maternity benefit under this Act shall, notwithstanding the application of the Employee's State Insurance Act, 1948, to the factory or other establishment in which she is employed, continue to be so entitled until she becomes qualified to claim maternity benefit under section 50 of that Act.

The real import of this section reproduced above is that until the time the woman to whom the ESI Act is applicable becomes eligible to get the maternity benefit under the ESI Act, she will be entitled to get the benefit under the Maternity Benefit Act until she becomes entitled to get the maternity benefit under the ESI Act. Therefore, in the case stated by you, as the woman is not entitled to get the maternity benefit under the ESI Act, she is entitled to get the maternity benefit under the Maternity Benefit Act.

With regards,

I am working with an IT company and need to calculate the maternity benefit for an employee who has been with us for the last 7-8 years. Her current salary is approximately 50,000.

Maternity Benefit Calculation

With reference to the information I have gathered, the maternity benefit should be calculated as follows:

- Average salary per month = (net salary of the last three months before going on leave) / 3
- Average salary per month / 30 x 72 days = maternity benefit amount for 12 weeks.

According to ESIC, the calculation is:

- Average salary per month / 30 x 84 days = maternity benefit amount for 12 weeks.

As she is receiving the highest salary, our consultant suggests that, as per Section 5, the first provision Payment of Maternity benefit should be as per the Minimum Wages Act as applicable to the Shop & Establishment Act.

- Basic + DA + HRA = ---- / 30 x 72 = Maternity Pay

I need to confirm which calculation is correct and also whether the maternity benefit needs to be calculated for 72 days or 84 days.

Kindly need urgent assistance regarding this.

Regards,
Madhavi

Hi friends, I am Silambarasan. I recently joined a company in the engineering and construction industry. This is the first time the company is dealing with a maternity situation. One of my staff members has been working as a front office cum admin assistant for 2 years and 4 months. Her take-home salary is Rs. 7500 per month.

Understanding Eligible Leaves and Salary Disbursements

She has applied for leave from April 1st to June 31st. Can you help me understand her eligible leaves and salary disbursements?

Thanks,
Silambarasan

Dear all,

During maternity benefits, which salary do we have to pay: basic or gross salary? Can we deduct PF from her salary or not? Please confirm with me.

Regards,
Mandeep Gahlawat

It is the gross salary that is to be paid during maternity leave days. Any reimbursement or allowance, if any, that is not paid during leave days shall not be available during maternity leave days as well. From this salary, you can deduct PF contributions.

Madhu.T.K