Navigating Maternity Leave Pay: Can We Exclude Allowances or Recover Past Payments?

Hi team, Please help me with two queries:

1. Do we have to pay the full gross salary during maternity leave, or can we avoid allowances like education allowance, travel allowance, and other allowances and pay only the basic salary and HRA?

2. If we have paid the full gross salary in the past five months, can we recover the allowances that were paid?

Thank you in advance.

Maternity Leave Salary Payment

1) For female employees who are on maternity leave, 100% of their salary should be paid after deducting statutory items like PF, PT, Income Tax, etc. You cannot exclude any allowances that are part of the fixed salary. However, any allowances paid in addition to the salary (not included in the Gross salary) will be at the discretion of the employer.

Allowance Recovery During Maternity Leave

2) As allowances must be paid as a requirement, there is no possibility of recovery. According to the Maternity Benefit Act, 100% of the salary should be paid. However, some employers choose to pay 50% of the take-home salary during maternity leave, with the remaining balance paid once the employee resumes work after their maternity leave.

As per the laws in the act mentioned:

Definition of Wages

"Wages" means all remuneration paid or payable in cash to a woman if the terms of the contract of employment, express or implied, were fulfilled and includes:
- Such cash allowances (including dearness allowance and house rent allowance) as a woman is for the time being entitled to
- Incentive bonus
- The money value of the concessional supply of food grains and other articles

However, it does not include:
- Any bonus other than incentive bonus
- Overtime earnings and any deduction or payment made on account of fines
- Any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the woman under any law for the time being in force
- Any gratuity payable on the termination of service

Query on Recent Revisions

Is there any revision in the act recently that requires us to pay the full gross salary? Please help me with this query.

Thanks in advance

According to the Indian Maternity Benefit Act of 1961, employers must pay their female employees their full salary during maternity leave. This includes all allowances that are part of the employee's regular salary, such as education allowance, travel allowance, and other allowances. The only exception is if the employee is on a probationary period, in which case they are only entitled to the basic salary.

If you have already paid the full gross salary in the past 5 months, you cannot recover the allowances that have been paid. This is because the law does not allow employers to recover any payments made to employees during maternity leave.

Additional Considerations

The employer must pay the maternity benefit within 15 days of the end of the maternity leave period. The employer must also provide the employee with a medical bonus of Rs. 25. The maternity benefit is not taxable.

I hope this helps!

Mr. Pocket HRMS

Where is it mentioned that "The only exception is if the employee is on a probationary period, in which case they are only entitled to the basic salary"?

"The employer must pay the maternity benefit within 15 days of the end of the maternity leave period." Under which law is it stated? We pay it as if the employee is on leave every month, not after she resumes duty!

"The employer must also provide the employee with a medical bonus of Rs. 25." It is Rs. 3500 and not Rs. 25. Please scrap the old bare Act.

"The maternity benefit is not taxable." Is there any circular for this? Maternity salary is salary only and it is taxable.

Is it also applicable to interns?

ESIC Benefits Payment During Leave

ESIC will not wait to pay the benefits until the leave is over but will pay it periodically while the insured is on leave.