Maternity Leave Dilemma: What Are Our Legal Obligations as a Small IT Company?

Hi, our company is registered under the Companies Act, 1956, and it has completed its 2 years of establishment. It's an IT company, and as of now, we have a total of 15 employees working with us. One of our female employees has given an application for maternity leave, but we do not have any provision for maternity leaves under our leave policy. I would like to know as an employer whether we have to follow the maternity benefit compliance and what provisions of the Act would be applicable to our company. In case we do not allow for maternity leave, then what will be the implications for the employer?

Understanding the Maternity Benefit Act, 1961

The Maternity Benefit Act, 1961 applies to factories, mines, or plantations, as well as to shops and establishments. The terms "factory," "mine," or "plantations" have been defined in the respective Acts, namely the Factories Act, Plantation Labour Act, and Mines Act. The terms "shops" and "establishments" are defined as places where ten or more persons are/were employed. However, the appropriate State Government has the power to extend the provisions of the above Acts to other establishments/shops.

Firstly, as an employer, you must examine the legal status of your company, i.e., whether it falls under the category of a 'factory,' 'shop,' or 'establishment' as per the provisions of the above Act.

Secondly, please ascertain whether the provisions of the above Act are applicable to your company. In my opinion, if the provisions of the above Act are applicable to your company, compliance must be ensured regardless of the company's policies. Even if the company does not have a specific policy in place, it is essential to adhere to the laws of the land as they are enforceable.

Regards,

Maternity Benefits under ESI Act

In case your establishment/company is covered under the provisions of the E.S.I. Act, 1948, and you, as the employer, are ensuring compliance by submitting returns, etc., for the said employee, then the payment of maternity benefits is to be made by the appropriate Branch Office of ESIC. In that event, the provisions of the Maternity Benefit Act, 1961, as mentioned in the above remarks, will not be applicable to employees covered under the ESI Act, 1948.

With regards;

Maternity Act, 1961

Eligibility: Sec 5
• Women, including temporary or unmarried, are eligible for maternity benefits when they are expecting a child and have worked for at least 80 days in the 12 months immediately preceding the date of their expected delivery.

The act says that a woman can be entitled to a "maximum of." Doesn't that mean the company can have a policy that offers a lesser number of days as maternity benefit?