Is It Legal for My Company to Retain Salary Before Maternity Leave? Seeking Advice

Dear experts, According to my company's Maternity Leave Policy, one month's salary will be retained before going on maternity leave, along with a written commitment of continued service with the company for a year. I wish to know if the Maternity Leave Policy covers such a "clause." Does my company have the right to legally implement such a clause? Please provide me with the right knowledge of it.

Thank you,
Regards,
Kappu

Please find the attachments. They may be helpful to you.

Regards,
M S V R K S.

There is no such clause in the Companies Act 1961, and any policy designed by an organization that is against or contrary to the Companies Act is illegal.

Regards,
Kamal

The maternity leave policy as stated by you is patently illegal. If the Payment of Wages Act is applicable, then the company would be violating the provisions of the Act regarding the time of payment of wages.

With regards,

Dear all, Thank you for your precious inputs. After having addressed my concern in general to my boss and the HR Manager (i.e., I didn't mention the illegality of this policy to my boss or the HR manager), I've been told that the HR policy cannot be waived off for anyone.

What are your further suggestions?

Once again, thank you.

Regards, Kappu

A policy that is contrary to the provisions of the law is not a policy at all. Probably, the management wants to learn a lesson the hard way. My sincere wish is that better counsel prevails over the management before they are hauled up by either the Courts or the State Human Rights Commission or the State Women's Commission.

If your management is that rigid and happy with their policy, which is contrary to the provisions of the law, then you should inform them about their statutory obligations in black and white. Include all legal aspects and provisions of the MB Act.

Thank you!

Surprising Company Policy on Maternity Leave

Really surprised to read a policy for the first time that benefits the company. First, as humans, we must acknowledge the truth that life is too precious, and maternity is a blessed time for a child to grow. Maternity leave is a must, and the Maternity Benefit Act is for people to think and act humanely. If a company forms such a rule, it needs to be addressed with top management, if not with the Women and Human Rights Cell.

Retaining the salary of an employee who is to go on leave is unacceptable because whether you earn well or not, one needs money during that time. People need to be human. Life is complicated; you will receive what you give away. It's a payback in all we do. Moreover, all of us go through this part in our family. I think our seniors would guide well to take it further.

Maternity Leave Concerns

1. Is the company not giving you maternity leave?

2. It seems like they are asking for a retention amount and a written commitment from you to return after 3 months of leave.

3. They are probably asking for a bond, similar to how some companies require a bond during joining.

4. How is this bond related to the Maternity Benefit Act?

5. What in the Maternity Benefit Act are they violating? You must definitely be in an IT or an IT company where such bond requirements exist.

6. You mentioned they will retain a month's salary before you go on leave. Are they withholding the salary, or is it in installments that you can pay?

Please refer to section 6(5) of the Maternity Benefit Act. This subsection specifically states that the amount of maternity benefit for the period preceding the date of her expected delivery shall be paid in advance by the employer to the woman on production of such proof as may be prescribed that the woman is pregnant. The amount due for the subsequent period shall be paid by the employer to the woman within forty-eight hours of production of such proof as may be prescribed that the woman has been delivered of a child.

According to section 6(6) of the MB Act, the failure to give notice under section 6 will not disentitle a woman to maternity benefit. The law is very clear, excepting for the want of proof of pregnancy and/or the want of proof of delivery of the child, the employer cannot refuse to give maternity benefit. Any other condition imposed by the employer for the payment of the maternity benefit is per se illegal and actionable. Perhaps no one would come forward to initiate action against the erring employer. Retention of one month's salary is also illegal per se as the employer is violating the appointment order, which is nothing but a contract. In case the Payment of Wages Act is applicable, the employer would have violated that Act as well.

Regards,

I understand that according to the Maternity Leave Act, retaining the salary is illegal (please correct me if I'm wrong), but is it possible for the company to make this retention of salary a company policy and start partly deducting before the employee goes on leave? Can the company also ask the female employee to provide a written commitment to work with the company for a minimum of one year?

Please enlighten.

Thank you,

Kappu

Whatever the company's policy may be, that policy cannot be contrary to the law that is in force. The policy, as contained in your last post, is contrary to the MB Act and is illegal.

Regards,

Thank you so much for enlightening me and taking the time to respond. I highly appreciate your help. 

Question on Maternity Leave Commitment

One more thing I wish to know is, can the employer take a written commitment from a woman employee going on maternity leave to continue services with the company for a minimum of one year after taking 3 months of maternity leave? Please advise.

With much thanks again,

Regards, kappu

The company cannot officially take any written commitment from you.

Regards,
Kamal

Dear Sir, I have a question, let me ask with an example, since we are planning to frame such a policy wherein we can take a bond from an employee before going on leave. The following is the case, please comment on whether it's within legal frames considering the definition of wages and calculation of the benefit amount as mentioned in the act:

1. Salary of an employee is around 50,000/month (basic + HRA + conveyance + education allowance + medical allowance + others).
2. We deduct 50,000/- in 3 installments stating that it would be paid back once the bond period is completed (period could be a year after joining back from leaves).
3. So 16k is deducted every month and the in-hand amount goes around 32,000/month before going on maternity leave.
4. Once she goes on leave, she gets her salary as usual.

Please advise whether this falls within the act.

Regards

I think the provisions of the Maternity Benefit Act are applicable to all female employees, and rightly so. The only condition applicable is that the employee has to be female and pregnant.

You are trying to provide Maternity Benefits by attaching many terms and conditions such as Bonds, Deductions in Salary, Holding of Salary, etc. What you are doing or proposing is against the provisions of the law, and it is absolutely illegal.

Pregnancy and childbirth are natural phenomena and are a part of everybody's life. How can you think of practices and policies that go against basic human rights? I am more surprised and shocked when such suggestions come from females.

I assume you must be allowing some break in work to have lunch. You may even have a canteen or cafeteria. Living creatures cannot survive without food, and unless they are allowed to take food, they will not work. Most of us work to earn food.

Similarly, you cannot think of this world void of mothers, pregnancy, and childbirth. Pregnancy and childbirth are processes that need time and special care, and they cannot happen in an office or factory like a daily lunch break. You have to treat it specially and should offer a break from work with salary unconditionally.

The only possible way to avoid Maternity Benefits is to provide all maternity care, nursing, child care, and doctors in the office/factory itself. Maybe you can start a Maternity and Nursing Ward in your office/factory.

Regards

The government has implemented a policy regarding this matter, and all establishments in this country should adhere to these policies. No violations are accepted in this regard. Taking a bond will not be valid in such cases. No one can predict the condition of a woman after she gives birth. She may or may not be able to continue working. Therefore, until she is on maternity leave, she is entitled to wages, and deductions should not be made for this reason.

Hence, a written commitment is not necessary. There is a separate board in place, and inspectors are available. You can approach them for any assistance or guidance.

Regards,
Raghav

Dear Ms. Prathibah, the policy as stated by you in your post is patently illegal. Only the affected employee could challenge this deduction. In all probability, she will not challenge it for fear of losing the job. That may be the reason for the continuance of the policy. If the affected employee decides to leave your company immediately after availing the maternity leave, probably, she may challenge the deduction, and then the company will face legal problems.

With regards,

Social Responsibility and Maternity Leave

Women going for delivery is like experiencing rebirth. How can you even consider seeking a bond from a woman who is going for childbirth? Don't you have social responsibility?

Regards,
Pon

By framing policies that, as stated by Mr. V. Harikrishnan, are patently illegal, you are inviting trouble for your organization.

Dear All,

This is Pratibha H. Well, I could read many reactions. I also read someone stating that it's surprising to come from a female HR.

Kappu, yes, you should not be stressing yourself in such an inhuman work culture. Your baby definitely deserves to not be affected and expects you to not be affected by it. Let me tell you about my experience.

I have a kid, and I did sign a bond with the company. The company helped me for 2 years, right from the time I was asked for bed rest during pregnancy to after delivery. I was given all the flexibility and support, work from home and office combinations, and otherwise for these 2 years. There was a consultant hired to help me before and after delivery, unlike other companies that just give 3 months' salary and a break. The 3 months' salary was the entire salary, not just the basic and stuff like that. This is the case for all the female employees expecting. Apart from mine, there are three other cases as of today, where one is working from home for the first 3 months, another has a 7-month-old kid and comes to the office just for calls. We hire extra staff to not burden the pregnant lady and many more things out of the act.

When I was asked about the bond, I didn't have any second thoughts since the company extended all possible help and made arrangements right from helping in commuting to the office to arrangements for having meetings at home. Members physically came home for the meetings. It was obvious for my company to expect me to stay longer with them and not resign after the kid. They wanted me to have a plan to work later as well, considering that I would get all the help to work from my company.

Apart from that, I had requested them to deduct the retention amount in more installments, which was approved. This has been the case with every lady here, and until now, there hasn't been any case of unhappiness from any female employee.

In the end, if you get all the help right from working from home for the first few months to your kid becoming an individual and able to walk and communicate, any company would like to keep a check on commitment.

Thanks for all the comments and reactions.

Thanks, Pratibha

My post was in response to your query regarding whether your company has the right to legally implement such a clause. It is you who have questioned whether the action of the company is legal or not.

Legality of the Maternity Leave Policy Clause

The second point is that even though you and your colleagues have no grievance against this policy of the company, that policy continues to be illegal. You may choose to ignore it, but nonetheless, the policy is illegal. The illegal policies of a company cannot be clothed with legality with the consent of the worker. It is against the principles of law and jurisprudence.

Regards

Dear V. Harikrishnan, I just want to bring to your attention that the "POST" quoted in your reply to Ms. Pratibha is mine and not hers. Perhaps the following is what you intended to quote, which was her first post against the maternity policy I was confirming:

"1. Is the company not giving you maternity leave? 2. It seems like they are asking for a retention amount and a written commitment from you to join back after 3 months of leave. 3. They are probably asking for a bond, like a few companies do during joining. 4. How is this bond related to the Maternity Benefit Act? 5. What in the Maternity Benefit Act are they violating? You must be definitely in an ITES or an IT company where such a bond thing occurs. 6. You mentioned they will retain a month's salary before you go on leave. Are they withholding the salary, or is it in installments that you can pay?"

Regards, Kappu

I don't think they are reactions but rather humane responses. Well, not everybody can read between the lines! As Mr. V. Harikrishnan mentioned, "The illegal policies of a company cannot be clothed with legality with the consent of the worker. It is against the principles of law and jurisprudence."

Firstly, I'm not stressing myself. Everyone has the right to voice themselves—it's just that some are too cowardly to practice it! I dared to stand for what is right, and that's all I am trying to do! Whether I get the desired result or not doesn't bother me at all, but I know I have not chosen to remain silent and accept anything like the others. I made a choice to be assertive about my situation, and that is what matters to me and my conscience after all!

Secondly, the company and its people should also have this consideration and realization in their approach and demeanor that the employee is pregnant!

Anything that is illegal is just ILLEGAL! Compensations or benefits can't make it LEGAL! You can't make WRONG RIGHT by doing it in installments!

No company can stop any employee from quitting—not even the bond! The Supreme Court ruled long ago that any employee bond with a company is illegal and not accepted in INDIA. I've seen so many employees leaving companies even after having signed the bond. So, if they want to go, they'll go! Think for yourself! You too are an employee!

Commitment cannot be demanded, commanded, or forced upon! It's to be gained by the company! If the employee believes the company is fair in its ways and approaches and that it cares for each of them equally, commitment comes without saying! Who would ever want to leave such a company or working culture unless for some very personally inevitable circumstances! This is what companies and their authorities largely fail to understand! I've known companies that give more than enough monetary help and moral support to their female employees going on maternity leave and equally even after they return.

So, think over it if you care!

Further, in the name of company policy, one can't make anything applicable because they are always discretionary! And usually, anything that is discretionary cannot be just or fair to all! If it's a policy of the company/HR/govt., it should be applicable to everyone! Not everyone in a company is made to sign a bond every year—why? If it's a policy, why for just one, two, or even three? Like I said, you can't stop anyone from quitting, or else companies wouldn't have known what attrition is all about! Money can't make anything and everything hold on forever; job satisfaction becomes important to all of us at some point in time in our lives! That's why we see many people moving down a level than they currently are on their career graph or starting something of their own, etc.!

Again, as Mr. V. Harikrishnan added, "you seem to have ignored it." If knowledge can create problems, it is not through ignorance that we can solve them.

Regards,
Kappu

I agree with what you have mentioned and take your point that it's illegal. I will definitely get it verified by other lawyers and confirm. If it concludes as illegal, we will definitely change it and also change our legal advisors. It means it's time to change our lawyers! The fact is no company implements policies without passing legal advice! Well, I learned a lesson—to get things verified by at least two legal firms! Thanks for the advice!

Regards,
[Name]

Sure Mr. V. Krishnan and thank you, Mr. Kamal Prasoon. 

Pratibha, you finally seem to have got the point and thought about acting on it! Good for you and the employees of the company! Get it verified as many times as you'd like but implement the change without delay! Even this forum is a great place to verify and validate information related to labor and employee relations! In fact, it's the professionals, experts, and seniors right from HR Heads to Joint Commissioners of Employee-Labor Relations field who have been posting here.

Considerations for Revising Maternity Policy

Pratibha - one more thing, if you happen to revise the maternity policy of the company now, it would be very unfair to the employees who have undergone it and the ones who are undergoing it. Have you thought about dealing with this situation? If not, you must!

Once again, thank you, everybody!

Dear Colleagues, with a heavy heart, I have to mention that I am working for a company that believes in the worst practice of salary retention during maternity leave.  Actually, I gave a bond of 2 years while joining, and now I am almost going to complete 1 year in this company. Recently, I became pregnant, and to my shock, I came to know that they are going to hold my salary when I go on maternity leave. They are not even paying my medical reimbursement (₹1250 per month) for those 3 months. When I enquired with my manager, she said that they are holding it back as they don't know whether the employee will rejoin post-maternity leave. Hence, the bond amount has to be deducted and paid. Anyway, if the employee rejoins, she will be paid the full amount later. Secondly, I will be eligible for a salary revision after completing 1 year with the company, but as I am going on maternity leave, I will not be eligible for it until I rejoin. Also, the effective date of my salary revision will also...

Can anyone please advise if an employee goes on maternity leave for 3 months, is she eligible for the annual bonus for that year or not?

Thank you. With respect to the increment, will the employee be eligible for an increment if she takes 3 months of maternity leave plus the 30 days of annual leave? Please advise.

Increment Criteria and Maternity Benefits

Increment criteria are always dependent on company policy. My personal view is that an increment should not be denied just because a female employee has availed herself of maternity benefits; rather, her overall performance should be taken into consideration. Denying an increment because a female employee has availed herself of maternity benefits is certainly not a valid and reasonable ground.

Regards,
Kamal

How many days of maternity leave are eligible from ESIC, and what percentage of salary will the beneficiary receive?

Regards,
Venkates

Dear Seniors, we are a new setup, just a 2-month-old organization. Now, we have just found out that one of our female employees is 6 months pregnant. Just wanted to clarify, will she be eligible for maternity benefits? Is the company liable to offer her 12 weeks of leave for maternity as well as make payments towards the same as per the Maternity Act?

Please clarify.

Regards,
Ruchika

Hello Harikrishnan Sir, my wife works for Fortis Hospital Bangalore. Starting from February 2017, they are now attached to ESI, and every month money is deducted for ESI. She delivered on August 10th. When I approached ESI for salary benefits and a claim submission form, they informed me that under ESI maternity wage benefits, you are entitled only after completing 9 months. Therefore, they advised us to collect the salary from the employer.

However, the HR department insists that it is ESI who should pay, as otherwise, you will not receive any salary for 6 months since the company will not pay. They suggest taking leave and then joining back. Could you please advise on how to resolve this issue of the 9-month waiting period under ESI, or whether the employer should be responsible for payment?

Thank you.

Dear Mr. Range, Please read section 5A of the Maternity Benefit Act. I have extracted it for your benefit.

"Every woman entitled to the payment of maternity benefit under this Act shall, notwithstanding the application of the ESI Act 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."

Your wife is entitled to get maternity benefit under the MB Act. She shall be entitled to get the benefit under that Act until she becomes entitled to get the benefit under the ESI Act.

With regards,