Maternity Leave Confusion: What Salary Components Are Paid During Leave?

Is maternity leave a paid leave? If yes, then which component of the salary (Basic/HRA/DA) should be given to the employee who is on maternity leave? Please guide.

Regards,
Lubna Ambreen

Maternity Leave Payment

Maternity leave is a paid leave. The last drawn salary must be provided. Partial components should not be provided; it must be paid fully.

Thank you!

Maternity Leave Payment Details

Maternity leave is a paid leave. The last drawn salary of the employee will be paid during the maternity leave period, which is 180 days. It excludes fixed traveling allowance, cell phone bill provision, etc.

Regards,
Venus
Asst. Project Manager - HR
DRDA
West Godavari District
AP

Dear all who have so far posted in this thread, I presume that Luna Ambreen's post relates to women employees/workers. In the case of women employees, there is no such thing in law as maternity leave. There are two legislations which regulate the payment of "maternity benefit" to women employees during their pregnancy, on the day of, and after the delivery of the child.

Legislation Governing Maternity Benefits

The first legislation is the Employees State Insurance Act. Under this Act, an insured woman employee is entitled to get maternity benefit during her pregnancy and after the delivery. This payment of maternity benefit is subject to certain conditions specified in the Act itself.

In the case of employees to whom the ESI Act is not applicable, the Maternity Benefit Act is applicable, and these women employees/workers are entitled to the payment of "maternity benefit" during pregnancy and on and after the date of delivery. This payment of "maternity benefit" is again subject to certain conditions specified in the Maternity Benefit Act itself. The rate of maternity benefit is specified in the ESI Act itself. Under the Maternity Benefit Act, the rate of maternity benefit is equal to the wages/salary of the employee on the date on which she starts to avail the benefit.

Therefore, in industrial law as it stands today in India, women employees/workers are entitled to maternity benefit. It will be a misnomer to call "maternity benefit" as "maternity leave," and any such usage in the official correspondence is likely to cause confusion later on during the service of the concerned woman employee.

With regards

Hi HariKrishnan Sir, I am working in an IT company with an employee strength of around 50. An employee of my company is on leave for her pregnancy. In order to provide her with maternity benefits, should we give her the amount equivalent to her last drawn salary, or should there be any deductions from it? Please guide.

Regards,
Lubna Ambreen

If the employee is covered by the ESI Act, then you need not worry. You should have deducted her contribution to the ESI and remitted it along with your contribution in respect of her. She has to make a claim with the ESI. If the ESI Act is not applicable to her, then she gets automatically covered by the provisions of the Maternity Benefit Act.

Maternity Benefit Entitlement

She is entitled to maternity benefit under this Act for 12 weeks if she had worked with the employer from whom she claims maternity benefit, at least for a period of 80 days during the 12 months immediately preceding the date of her delivery. Out of these 12 weeks, not more than six weeks can be availed before the actual date of delivery. From the date of delivery, she cannot be asked to work by the employer for six weeks. In other words, it is a must that the employer should give her maternity benefit for a minimum period of 6 weeks from the date of delivery. If she chooses, she can come to work until labor pain starts and then avail the full 12 weeks of maternity benefit from the date of delivery. Whatever wages she was drawing before availing the maternity benefit have to be paid to her during the maternity benefit period.

Section 13 of the Maternity Benefit Act

Please refer to section 13 of the Maternity Benefit Act. According to this section, no deduction from the normal and usual daily wages of a woman entitled to maternity benefit under the provisions of the MB Act shall be made by reason only of (a) the nature of work assigned to her by virtue of the provisions contained in sub-section (3) of section 4 of the MB Act and (b) for breaks for nursing the child allowed to her under the provisions of section 11 of the MB Act. The implication of this section is that legal recovery/deduction for reasons other than those specified in section 13 of the MB Act (which I have given in this post) can be made. There is no limit to the number of maternity benefits that a woman employee can avail during her employment.

Regards,

Maternity Leave Payment Details

Last drawn salary should be paid during the Maternity Leave Period. However, the leave period is 90 days. An employee can avail 6 weeks before her due date after producing the certificate from the doctor and six weeks after the delivery.

A woman worker is entitled to avail the maternity benefit provided she has worked 80 working days in twelve months. For the purpose of calculating the days on which a woman has actually worked in the establishment, the days for which she has been laid off or was on holidays declared under any law to be holidays with wages during the period of 12 months immediately preceding the day of her delivery, the actual day of her delivery, and any period immediately following that day. For the purpose of this provision, 'the average daily wage' means the average of the woman's wages payable to her for the days on which she has worked during the period of 3 calendar months immediately preceding the date from which she absents herself on account of maternity.

Dear V. Harikrishnan, we know that ESI has provisions for maternity benefits. Please clarify what happens if we have not completed the ESI benefit period. I believe ESI will not process that claim, and the company will be responsible for paying it. If an employee is not covered by ESI at that time, will the company pay the amount? Please address this question first and then provide a description of the relevant acts.

Thank you,

Anil Sharma

[Phone Number Removed For Privacy Reasons]

Will you be kind enough to indicate the relevant provisions of the Maternity Benefit Act which state that the maternity benefit period is 90 days?

Regards,

Kindly clarify whether during maternity leave, i.e., 12 weeks, she should be paid her normal salary along with payment for the additional 12 weeks or not.

Thanks,

Regards,
SNC
Jamshedpur

During the period in which maternity benefits are availed, the woman employee is not entitled to her regular salary/wage. She is entitled only to the maternity benefit.

With regards,

Thank you to all of you for clarifying my doubts, especially Hari Sir. Where can I get the full details of the Maternity Benefit Act? Which site should I refer to for this act?

Regards,
Lubna Ambreen

Maternity Benefit Wages

To avail of maternity benefit wages, it is mandatory to have 80 days of contribution at the time of delivery confinement. However, medical treatment will be available free of cost. If her contribution is less than that, the company does not need to pay towards maternity wages.

Regards,
Naresh

Respected Sir,

Thank you for the quick answer. What I have understood is as follows:

1. No regular salary is paid during the said 12 weeks. Only Basic + DA is paid for 12 weeks, and no other allowances like TA, HRA, etc., are paid as applicable in the Government sector.
2. Whether the payment, i.e., one day Basic + DA x 12 weeks, comes under the Income Tax Act, i.e., Tax to be deducted or not.
3. Whether PF is deductible from Basic + DA or not.

Kindly clarify it.

Thanks,
SNC
Jamshedpur

Maternity Benefits and ESI Coverage

Please resolve these questions. We know that ESI has provisions for maternity benefits. Please clarify what happens if we have not completed the ESI benefit period. I think ESI will not approve the maternity claim in that case. Will the company pay that claim?

Company Responsibility for Maternity Benefits

Next question: If somebody is not covered by ESI at that time, will the company pay the maternity benefit amount? Where is this shown in the Factory Act?

Regards,

The following are your questions and my answers for them.

Question No. (1): No regular salary is paid during the said 12 weeks. Only Basic + DA is paid for 12 weeks, and no other allowance like TA, HRA, etc., is paid as applicable in the Government Sector.

Answer: The payment made during the maternity benefit period is not called salary or wage; it is called maternity benefit. The quantum of maternity benefit payable under the Maternity Benefit Act, to put it very simply without using legal language, is the pay last drawn at the time the woman starts to avail maternity benefit.

Question No. (2): Whether the payment, i.e., one day basic + DA x 12 weeks, comes under the Income Tax Act, i.e., tax to be deducted or not.

Answer: The payment is not "salary" or "wages." This much I can clarify. Whether it is taxable or not could be answered only by a tax expert.

Question No. (3): Whether PF is deductible from Basic + DA or not.

Answer: Again, as the payment is only "maternity benefit" and not "salary" or "wage," an expert in PF laws will be able to give you a correct answer. However, my view is that PF deductions could be made based on Section 13 of the Maternity Benefit Act.

Regards,

Dear Mr. H Ranil, If an employee is not covered under the ESI Act, what does the Maternity Benefit Act say about maternity benefits?

Question 1: If an employee has been working with the same organization for 4 years and goes on leave from the first month of pregnancy without informing the employer, what should the employer do? Is she eligible for maternity benefits?

Question 2: After delivery, if she emails stating that she is on maternity leave, how should the employer handle this situation?

Question 3: What documents need to be submitted to HR for maternity benefits?

Question 4: If she has been on leave since the first month of pregnancy, what documents need to be submitted to the employer?

I am awaiting your reply.

Regards,
Madhu
[Phone Number Removed For Privacy Reasons]

Maternity Benefits Under the Maternity Benefit Act

If an employee is not covered under the ESI Act, what does the Maternity Benefit Act say about maternity benefits?

Que 1. If an employee has been working with the same organization for 4 years and goes on leave from the 1st month of pregnancy without informing, what should the employer do? Is she eligible for maternity benefits?

Que 2. After delivery, if she sends an email stating that she is on maternity leave, how should the employer treat this?

Que 3. What documents need to be submitted to HR for maternity benefits?

Que 4. If she has taken leaves from the 1st month of pregnancy, what documents need to be submitted to the employer?

Regards,

Thank you for the response, everyone, particularly Hari Sir. Which online material or website should I refer to for full access to the Maternity Benefit Act 1961? Please guide.

Regards,
Lubna Ambreen

Eligibility for Yearly Increment During Maternity Leave

This is Venu Gopal, Assistant Manager - HR, DRDA, Department of Rural Development. One employee availed of maternity leave for 4 months (2008-2009) and extended her leave for another 5 months, totaling 9 months of leave taken. My question is, is she eligible to receive the yearly increment during that year? If yes, how is she eligible? If no, why is she not eligible? Please provide comments based on the rules.

Regards,
Venu Gopal
Assistant Project Manager - HR
DRDA
Department of Rural Development
Government of Andhra Pradesh
Email: [Email Removed For Privacy Reasons]

Dear Mr. Venugopal, probably, you are referring to an employee of the Government of A.P. If so, the government rules regulating the grant of maternity leave and how that leave should be reckoned for increment will be applicable, and the Maternity Benefit Act is not applicable.

In cases where the Maternity Benefit Act is applicable, 12 weeks of maternity benefit is allowed for the delivery of a child. Any leave beyond the 12 weeks provided for under the MB Act depends on the policy adopted by the employer in such cases. Some employers grant leave on loss of pay for one month after the expiry of the 12-week maternity benefit period.

Again, how to calculate the qualifying service for increment would have been laid down in the leave policy or HR policy of the employer (this refers to a case where the MB Act is applicable). The policy of the concerned organization has to be followed in this case.

With regards,

Maternity Leave and Salary Components

Maternity leave is a paid leave. During maternity leave of 84 days, she is entitled to receive her full salary that she was earning just before the leave started. The salary for this purpose should include all allowances that are paid as per the contract of service. Therefore, you cannot restrict it to any particular component of the salary. This is of utmost importance as the practice of splitting the salary into numerous parts merely to lower the basic salary has been regarded very seriously.

Regards,
Madhu.T.K