Maternity Leave Confusion: Do We Pay ESI and PF, and Is 6-Month Pay Applicable?

Hello, I am Sabiha, working as an HR for a software company. My doubt is whether we pay ESI and PF for an employee who is on maternity leave. One more doubt is if an employee is on maternity leave since Feb 201, as per the new amendment maternity pay should be paid for 6 months, will that be applicable to her? Please clarify.

Sorry, in the above query, "year" was not typed correctly. If an employee has been on maternity leave since February 2017?

Maternity Benefit under the ESI Act, 1948

You have raised the issue regarding Maternity Benefit under the provisions of the ESI Act, 1948. It is important to inform you that the maternity benefit for eligible women employees is to be paid by the branch office of ESIC (based on certification she may have obtained from the ESIS dispensary or ESI Hospital) and not by the employer.

Entitlement for Maternity Benefit

The issue regarding entitlement for the Maternity Benefit under the said Act is a question of fact. Therefore, it would be better if the insured woman contacts the appropriate ESIS dispensary, obtains medical certification, and then contacts the concerned branch office of ESIC to which she is attached. I believe the appropriate branch office will pay her Maternity Benefit for the period if she is eligible under the said Act.

Furthermore, when the unit/company has not paid any wages to the insured woman for her Maternity Benefit period obtained from ESIC, why should there be any contribution under the said Act?

Dear Member,

The amendment to the Maternity Benefit Act came into effect w.e.f. 01/04/2017. Since your employee has already been on maternity leave prior to the effective date of the amendment, she is entitled to maternity benefits for 84 days only.

N. LOKANADHA BABU
MANAGER

ESI and PF for Employees on Maternity Leave

Whether we pay ESI and PF for an employee who is on maternity leave? Payment made to an employee under The Maternity Benefit Act is not considered as salary. Consequently, PF deduction is not mandatory. The question of deducting ESI also does not arise because ESI-covered employees receive maternity benefits from ESI. During that time, they will not work and earn a salary. Therefore, the question of the deduction of ESI does not arise. Maternity benefit extends to 26 weeks, whereas you have mentioned 6 months. Please frame your question properly to suit the position you hold.

I do not agree with what Srinath Sai Ram has said, that payment made as per the Maternity Benefit Act is not considered salary, and therefore, no PF is required to be deducted. If so, the maternity days will become non-contributory periods, which will certainly have a negative impact when calculating pensionable service and the amount of pension. Therefore, if you pay salary to an employee who is not covered by ESI during the maternity leave period (i.e., maternity leave salary), you should deduct PF invariably.

An employee covered by ESI will not receive salary on any day when she is on ESI leave. PF is deducted on the salary paid. When there is no payout, why should we consider payment of PF? Therefore, no PF deduction should occur when she is on ESI leave.

The ESIC incorporated 26 weeks of maternity leave with effect from 20th January 2017 (I believe).

Madhu.T.K

Dear Mr. Madhu,

Please peruse the attachment of the Judgment wherein it has been held that Maternity Benefit is not considered as part of the Salary.

Clarification on EPF and ESI Contributions During Maternity Leave

1. Sir, good judgment as pointed out by Sh. Srinath Sai Ram because the term has been separately defined as "maternity benefit" under section 3(h) of the said Act. However, I feel that in respect of payments for miscarriage, etc., as mentioned under sections 9, 9A, and 10 of the said Act, the contributions in respect of EPF will be payable since such payments as mentioned in sections 9, 9A, and 10 have not been categorized as "maternity benefit" and have been mentioned as "leave with wages."

2. However, I understand that for the period for which such "leave with wages" is paid to the woman insured person, no maternity benefit will be payable under the ESI Act, 1948, and rules/regulations framed thereunder (Ref. Section 2(22).

Thanks for sharing the ruling by Bombay High Court.

The ruling came in the year 1958, whereas the present Act was passed in 1961, though the main contents of the principal Act of 1930 were maintained. The highlight of the judgment is not the eligibility of the employee to get leave wages, but the authority who ordered the payment of wages. I would say that the woman had approached the wrong authority, i.e., the authority under the Payment of Wages Act. It is not disputed that a woman employee is entitled to leave with wages for 84 days (now it has become 26 weeks) and the employer is bound to pay it.

Views on PF Contributions

Now, coming to the views on PF, we can see that whatever the employee gets while on duty or on leave, which has cash value, is remuneration that will attract PF contributions. If you are on earned leave for, say, 90 days, you will certainly get a full salary for the entire 90 days, or 3 months, but the payment will be made after deducting PF. This is because PF is paid on the salary earned while on duty or on leave. At the same time, leave encashment will not attract PF deduction because that is not earned by working or being on leave. Similarly, retrenchment compensation will not attract PF deduction because this is not an amount earned while on duty or on leave.

Therefore, I support that if your employee is paid maternity benefit in the form of a salary for certain days/months, the same should be paid after deducting PF. Certainly, for the amount of the medical bonus of Rs 3500 that you pay, there is no need to deduct PF because it is not a salary but a benefit in the form of reimbursement of expenses met by the employee for her prenatal and postnatal care.

Regards, Madhu.T.K

Dear Madhu Sir,

Please find attached the definition of wages as per The Maternity Benefit Act, 1961.

Thank you.

Clarification on Maternity Leave and PF Deductions

So what? I did not say that wages include PF payable by the EMPLOYER. I meant to say that when you pay salary to a woman who is on maternity leave, the salary should be the sum after deducting PF, that is the employee's share of PF.

Now you are showing me the definition of wages under the Maternity Benefit Act. Where is it written that wages should be paid without deducting the employee's share of PF? There is no dispute that wages mean the amount payable in gross, and this should not include employer's statutory contributions like bonus, employer's share of PF, gratuity, etc. If all these are included, it would become the Cost to Company or the so-called CTC.

Regards, Madhu.T.K

Issue with ESI Maternity Benefits

Recently, my wife delivered in August '17. She works for FORTIS Hospital and has been attached to ESI since February '17. All documents were submitted to the HR team, and they mentioned that all payments would be made by ESI. The company does not provide any benefits; every claim should be made through ESI.

We visited the ESI office and found out that hospital expenses will be covered, but not the salary, due to the clause that any employee attached to ESI should complete 9 months to claim the maternity salary benefits. However, hospital expenses can be claimed.

We informed the HR team about the issue, and they said that if ESI does not pay, it will be considered a loss of pay, and my wife should report to work after 6 months.

Kindly advise on the solution in this scenario.

Regards,
Ranganath
Bangalore

Maternity Benefits under ESI Scheme

It is true that under the ESI scheme, the maternity benefit is available during the benefit period on one condition: the employee must have contributed for at least 70 days during the last two consecutive contribution periods. In respect of newly joined employees, the first benefit period typically begins after around 9 months of their joining. For instance, if your wife joined in February 2017, her first benefit period would start in October 2017. This is why the ESIC has denied her cash benefits, such as leave with pay for 26 weeks.

Additionally, it is correct that when an employee covered by ESI takes maternity leave, the employer is not obligated to provide any salary, a rule that applies to all leaves under ESI. However, since she is ineligible for ESI leave, the employer is legally required to pay her salary during her maternity leave days. Employers cannot absolve themselves of this responsibility by claiming they provided coverage under ESI and leaving it to the employee to seek it from ESIC.

Understanding the Law on Maternity Benefits

Furthermore, the law concerning Maternity Benefits specifies that leave should be granted if the employee has worked for 80 days during the twelve months preceding the expected date of delivery. It does not mandate 26 weeks of leave if the employee has only worked for 80 days in the first few months of joining the establishment. The phrase "12 months immediately preceding the (expected) date of delivery" indicates a minimum service of 12 months with 80 days of work, including paid leaves and holidays during this 12-month period.

The above interpretation is my own understanding of the law; I have not come across any such interpretation from a Court. Therefore, many of you may hold different views on this. Please share your thoughts.

Regards, Madhu T K

Dear Seniors,

One of my friends joined on 20th Feb 2017 and will be on maternity leave from 01st Dec 2017. She is covered under ESIC and wants to claim maternity leave encashment under ESIC. Can she get the maternity leave encashment before delivery? Also, please kindly suggest what documents she will need to submit to the ESIC office. Furthermore, she has planned her delivery in a private hospital. Is there any way to claim the reimbursement from ESIC? Kindly help.

Regards

This was discussed in detail in the following thread:

https://www.citehr.com/592078-what-c...efit-esic.html

Dear Shiv,

Before concluding that your friend is covered under ESI and consequently eligible for maternity benefits, please log in to the ESI IP Portal to check for eligibility with the ESI Insurance Number.

Thank you.

ESIC Maternity Benefit Eligibility

1. Sir, ESIC has its own system for determining the eligibility of any insured person or woman for benefits under the ESI Act, 1948, and the payment of benefits. The benefit is called "maternity benefit" and is not any type of "maternity leave encashment" as you have mentioned.

2. To claim such maternity benefit, the insured woman must obtain the required medical certification either from an authorized ESI dispensary or an ESI Hospital to which she is attached. However, in the case of private hospitals, the payment of such benefit is doubtful. Regarding Government Hospitals, I believe the ESIC Branch Office Manager is authorized to pay the said maternity benefit (if the insured woman is otherwise entitled) as a form of alternative evidence. It would be even better if the insured woman could contact the ESI dispensary as well as the ESI Hospital to which she is attached before delivery.

3. To examine the eligibility of the insured woman for such benefits, please refer to Rule 56 of the ESI (Central) Rules, 1950, as well as Regulation 4 of the ESI (General) Regulations, 1950. This is a matter of fact, and the correct position can perhaps be ascertained from the concerned Branch Office of ESIC to which the insured woman is attached.

Applicability of Maternity Benefits (Amendments) Act, 2017 to Women Employees Covered Under Employees State Insurance Act, 1948

What is the definition of wages under the ESI Act for checking the Rs. 21,000/- threshold limit? (CTC these days comprises Basic+DA+HRA+Commuting Allowance+Medical Allowance+Special Allowance+PF Cont^+ESI Cont^+Insurance cost if any)

Will the full salary be paid during maternity leave, and if yes, who will pay - the employer or the ESI department? What is the defined procedure for claiming this?

What is the definition of "the average daily wage for the period of a worker's actual absence from work"?

Are facilities such as a creche and provisions for work from home not available?

Thank you.

Definition of Wages and Benefits under the ESI Act

The term "wages" has been defined under Section 2(22) of the ESI Act, 1948. The term "average daily wage" is defined under Rule 2(1-A) of the ESI (Central) Rules, 1950. You can also see the definition of "standard benefit rate" as defined in Rule 2(7-A) of the Rules mentioned above. You can download the above Act and rules from the website of ESIC.

Maternity Benefit under ESIC

Maternity Benefit is paid in cash by ESIC through their appropriate Branch Office, and that too after the receipt of medical certificates in respect of an insured woman from an authorized ESI Dispensary or ESI Hospital. It is also required that the claimant insured woman must be eligible for the said benefit by having contributed for the minimum days as required under the above rules.

Hope the claimant may contact the ESI dispensary or ESI Hospital, as well as the ESIC Branch Office to which she is attached, to get proper guidance and the proper medical certification required for claiming such benefit.

Swati,

It is the gross salary and not the CTC that is considered for ESI coverage. Normally, the CTC will include the costs by way of salary and the statutory contributions like ESI, PF, Bonus, Gratuity, etc., that the employer should make in respect of each employee. These contributions are out of the purview of wages.

Regarding work-from-home facility

The work-from-home facility, which is suggested in the Maternity Benefit Act, is the responsibility of the employer and not the ESI Corporation. If your employer is willing to provide you with the option to work from home, then he can allow it. However, as you are aware, it may not be feasible for all employees to work remotely. For example, a receptionist cannot perform her duties from home, nor can a chemist conduct tests while at her residence. Therefore, the provision concerning work from home is not mandatory.

Provision of a creche

The provision of a creche is also the responsibility of your employer. If your establishment has a sufficient number of women employees (50 employees in the case of establishments other than factories, 30 in the case of factories, or 50 women or 20 children in the case of plantations), then the employer should arrange for a creche facility.

Thank you.

Thank you, Harsh and Madhu, for replying to my query. Why are women employees covered under the ESI Act not benefiting under the Maternity Benefit Act, 2017 equally? Why is there discrimination? Will full salary be admissible during the maternity leave period? Why will the ESI branch office pay in cash? Why not by cheque or NEFT? If a female employee herself has to visit the branch office every month to collect her salary?

Dear All,

After reviewing the discussions, I have a few queries regarding employee benefits in the case of ESI coverage:

1. Is the employer liable to pay full salary for 6 months for employees earning more than 21k and not covered under ESI?

2. If an employee earns less than 21k and recently joined the company, but is expecting maternity leave within 2 months of joining, who will be responsible for paying the remuneration for the 6 months of maternity leave?

I am seeking a reply to these questions.

Thank you.

Eligibility for Maternity Benefits

In respect of employees who are not "eligible" to receive maternity benefits from ESI, the employer will pay their salary for 6 months. To be eligible for benefits from ESI, an employee must first be a covered employee, and only those with a salary of less than INR 21,000 will be covered by ESI. Secondly, a covered employee should have contributed for at least 70 days in the two consecutive contribution periods. If she is a newly joined employee, she will not receive maternity benefits from the ESIC.

Now, having said that she is not an eligible employee due to not having worked or paid contributions for at least 70 days in the two contribution periods immediately preceding the expected date of delivery, the employer will have to pay her salary for the period she is absent due to maternity.

Maternity Benefit Act Requirements

As per the Maternity Benefit Act, only a woman employee who has worked for at least 80 days during the 12 months immediately preceding the date of delivery will be eligible to receive 6 months' maternity leave and a medical bonus of INR 3500. Therefore, an employee who has just 60 days of service will not be eligible for 6 months of maternity leave.

Dear Sir,

I want to know how many days are required for ESI maternity leave because my ESIC contributed number of days is 211, but my ESI maternity benefit status is not showing. Am I eligible for ESI maternity leave? Also, please inform me how many days before delivery I can apply for maternity leave. I am currently 7 months pregnant, and the doctor advises that I should have the maternity leave certificate issued 56 days before delivery. Is this correct?

Please reply as soon as possible.

My sister is going on maternity leave in September 2018. As per her wages (Rs 15,000) till March 2018, she is eligible for ESI Maternity Benefits. However, since April 2018, she is out of the ESI wage limits. When consulted with ESI, they informed her that she is eligible for Rs 15,000 maternity pay from ESI.

Question about Salary Difference

Now, my question is, what about the difference in her present salary (approximately Rs 8,000)? Who will pay it? Is the company liable to pay the difference in the amount, due to the fact that she falls under the ESI Maternity Act? If the company is liable to pay that difference, then what about the PF contribution for that 6-month period during which she will be on maternity leave?

What is the significance of Rs 15000 here? It should be Rs 21000. If the ESI Corporation is paying the maternity salary for a 6-month period, how can the employer pay it? For the ESIC, there will be a different computation of average wages payable, but the employer is in no way liable to pay the difference amount.

If you are covered by ESI, then how can the employer pay salary for the days you remain on leave due to maternity reasons? It will be paid by the ESI Corporation. For that, you have to consult the Medical Officer of ESI and then submit the relevant certificates to the Local Office of the ESIC.

Dear Sir/Madam, I joined my previous company on 01/01/2012, and from that day onwards, I was under ESIC coverage. I contributed to ESIC until June 2014. Starting in July 2014, my salary increased, so ESIC deductions were not made from that month onwards. In May 2017, I began a new career at another company, and they enrolled me under ESIC starting on 01/10/2018, with the same registration number. My expected delivery date is April 25th, 2019, so I will be working until then. I will continue to use the same registration number.

Eligibility for ESIC Salary Benefits

My question is whether I am eligible for ESIC salary benefits for 24 weeks, considering that my new contribution period is only 7 months. Will my previous ESIC contributions be taken into account in this calculation?

Thank you.

Eligibility for ESI Contributions During Maternity Leave

The Act states that you should have 70 days of contributions in two contribution periods immediately preceding the date of delivery. This means you should have contributed from April 2018 to September 2018 and from October 2018 to March 2019. However, you may have made more contributions in earlier contribution periods. I am unsure if they will require contributions for only the two periods immediately before the delivery date. Therefore, please check your eligibility using the following link. This portal is designed for IPs.

[ESIC: Portal Application](http://www.esic.in/EmployeePortal/login.aspx)

Madhu T K

Thank you, Madhu Sir, for your valuable reply.

In the ESIC portal, it shows only 3 months' contribution and indicates that I am not eligible for benefits. What about my old contributions? If they are not considered, then why should we renew the same policy number? Can we generate a new number instead?

Please reply, Sir.