Hi all, Whether EPF is payable on Maternity Benefit (MB) paid by employer pursuant to provisions of Maternity Benefit Act 1961.
Going by the definition of wages under EPF Act, it provides
“Basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of
the contract of employment and which are paid or payable in cash to him............"
Now the question is whether Maternity Benefit paid should be considered as paid in accordance with the terms of contract of employment?
Though MB is not directly arising out of employment contract. In most cases, it is because of legal requirement.
However, when maternity benefit is paid, the components of salary like basic, DA etc.. are shown as per agreed CTC. Therefore, I feel it will be considered wages and PF will be applicable.
On the contrary, incase MB is paid by ESI as per ESI act, it will not be wages since it is not pursuant to employment contract and is not paid by Employer as well. It is directly paid by ESI department and out of the purview of employment contract. Therefore, PF and ESI need not be paid on MB paid by ESI under ESI act.
Your views please.
Going by the definition of wages under EPF Act, it provides
“Basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of
the contract of employment and which are paid or payable in cash to him............"
Now the question is whether Maternity Benefit paid should be considered as paid in accordance with the terms of contract of employment?
Though MB is not directly arising out of employment contract. In most cases, it is because of legal requirement.
However, when maternity benefit is paid, the components of salary like basic, DA etc.. are shown as per agreed CTC. Therefore, I feel it will be considered wages and PF will be applicable.
On the contrary, incase MB is paid by ESI as per ESI act, it will not be wages since it is not pursuant to employment contract and is not paid by Employer as well. It is directly paid by ESI department and out of the purview of employment contract. Therefore, PF and ESI need not be paid on MB paid by ESI under ESI act.
Your views please.