Maternity Benefits Dilemma: How Should Employers Handle ESIC Eligibility Issues?

Dear Members,

Maternity Benefits Scenario

I have a scenario with respect to maternity benefits for an employee. One of our employees, who has been with us for more than two years, has recently come under the ESI limit when ESIC increased the wage limit to 21,000. The problem is, she has contributed to ESIC only for three months so far (from January to March 2017) and does not meet the eligibility to avail maternity benefits through ESIC. When she approached ESIC to inquire about this, they also confirmed the same.

Now, I am confused about understanding the responsibility of an employer and need your advice on the following:

1. Leave with Wages During Maternity Leave

Generally, any employee covered under ESI can claim wages through ESI, but in this scenario, ESI refused to accept since she has contributed only for three months. So, what should be done next?

2. Employer's Responsibility for Salary Payment

Should the employer pay the salary, or is there any provision to get it through ESIC?

3. Leave Without Pay

What if the employer gives leave without pay? Is it advisable?

4. Relevant Rules or Judgments

Are there any rules or judgments passed similar to this case?

Kindly give me your views and help me out.

Thanks,

Prabu

In the absence of ESI being applicable automatically, the MB Act applies, and hence the employer has to take responsibility to pay the wages and approve leave as per the MB Act.

In all fairness, a female employee who is not covered under the ESI Act should be eligible under the MB Act. Since she has not contributed for the qualifying 'service period' under ESIC, the employer should automatically extend the facilities as per the MB Act. No doubt about it.

The act very clearly provides that the act applies in all cases where the ESIC coverage is not there.

The specific scenario is already there in the Maternity Benefit Act, it's in Section 5.

Though the employee is covered under ESI from 01/01/2017, ESI will provide only medical benefits since she has not contributed to ESI in two contribution periods. Consequently, the employer has to pay maternity benefits to the extent of 26 weeks' salary subject to a medical certificate.

Contribution periods: April to September & October to March

Suppose the female employee covered under ESI could not contribute for 70 days in two consecutive contribution periods due to her long absence on loss of pay, will she be given maternity benefits under the MB Act.?

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The corrected version with proper spelling, grammar, and formatting:

Suppose the female employee covered under ESI could not contribute for 70 days in two consecutive contribution periods due to her long absence on loss of pay, will she be given maternity benefits under the MB Act.?

Dear Prabhu, please find answers to your queries below:

1. Leave with wages during maternity leave

Generally, any employee covered under ESI can claim wages through ESI. However, in this scenario, ESI has refused to accept the claim since she has contributed only for three months. So, what should be done next?

Ans: As ESIC is not applicable to the respective woman employee, she will fall under the Maternity Benefit Act. As per the new amendment, she is entitled to 26 weeks of paid maternity leave.

2. Should the employer pay the salary, or is there any provision to get it through ESIC?

Ans: Yes, the employer has to pay the salary in lieu of maternity leave.

3. What if the employer gives leave without pay? Is it advisable?

Ans: Not advisable under the Maternity Benefit Act.

4. Are there any rules or judgments passed similar to this case?

Ans: Not so far.

Hope the answers meet your requirements.

Please log in to the ESI IP Portal and take a print of her entitlement. Put up the same to your management for extending the Maternity Benefit Act, 1961 to her.

Dear Mr. Varghese Mathew,

If any woman employee covered under ESI is not eligible to claim maternity benefits provided therein due to not fulfilling qualifying conditions, she comes under the purview of The Maternity Benefit Act, 1961. A woman employee should receive maternity benefits from the employer even if she is covered under ESI.

Sri Natham,

My question is, if the non-fulfilment of eligibility conditions under ESI (70 days) is due to the fault of the employee, i.e., under unauthorized absence.?

Varghese Mathew,

It does not matter whose fault it is. What matters is that a female employee is entitled to maternity benefits. If ESI does not apply, then the Maternity Benefit Act applies, and the employer has to provide for it.

Please peruse Section 5A of the Maternity Benefit Act, 1961, and Section 50 of the ESI Act, 1948, with reference to the query raised for payment of maternity benefit by the employer, though the employee is covered under the ESI Act.

Section 5A of the Maternity Benefit Act, 1961:

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, i.e., the ESI Act, 1948.

ESI Contributory Conditions for Entitlement of Maternity Benefit:

An insured woman is eligible for maternity benefit for confinement/miscarriage if contributions in respect of her have been paid or are payable for not less than 70 days in the two immediately preceding consecutive contribution periods with reference to the benefit period in which the confinement took place.

ESI Contribution Period:

Corresponding Benefit Period:

April 2016 to September 2016: 1st January 2017 to 30th June 2017

October 2016 to March 2017: 1st July 2017 to 31st December 2017