Maternity Leave and Appraisals: Should Salary Increases Apply During Leave?

Hi, our employee has been on maternity leave since April, and our company gives appraisals in April only.

As per Indian law, the woman is paid the same amount for the last three months before taking maternity leave. So, should she be paid the increased amount or not during her maternity leave?

I understand that by "our company gives appraisal in April," you mean that you provide a salary increment in April based on the performance of the employees in the preceding 12 months. If an employee is proceeding on leave, whether maternity leave or otherwise, you should have a record of her performance as evidenced by a performance appraisal, correct? Based on that, you can award an increment to her starting from April and begin paying the revised salary during her leave period.

If you choose to pay the revised salary once she rejoins work, there is nothing wrong with that approach. Similarly, if you have an incremental pay scale that guarantees an increment, it should be paid. Most private establishments do not follow incremental pay scales but instead provide increments based on performance appraisal. In such a scenario, you can withhold the increment until she resumes work. In the case of maternity leave extending to six months, it is acceptable to delay the payment. Additionally, section 5(1) of the Maternity Benefits Act stipulates that a woman employee should receive the same salary as she was receiving just before proceeding on leave. Therefore, the salary of March would meet the legal requirements.

Company's Decision on Increment During Maternity Leave

In effect, it is the decision of the company whether to give an increment and when to give it. Unless you have a specific clause in the employment contract, the choice remains with the employer.

If you have an existing practice, then you should follow that. Otherwise, you need to decide on the policy for this scenario. If you value the employees and wish to retain them, giving a little more by way of an increment when the person is not working will always help create loyalty in them. The problem is many times women do not return to work, which would mean the increment gave you no additional benefit. Perhaps you can communicate the change but pay it only after the employee joins.

Dear Nirmala,

In India, the Maternity Benefit Act, 1961, governs maternity leave and benefits. According to this Act, a woman is entitled to maternity benefits for the period of her maternity leave, which includes full wages for a period of 26 weeks.

Calculation of Maternity Benefit:

As per Section 5(1) of the Maternity Benefit Act, the maternity benefit is calculated based on the average daily wage for the period of three months immediately preceding the date of her expected delivery. This means the salary she was receiving before taking leave is used to compute her benefits.

Appraisal and Salary Increase:

If an appraisal cycle occurs during the maternity leave and results in a salary increase, the law does not explicitly require the employer to adjust the maternity benefit to reflect this increase. However, company policies and practices can vary.

Company Policies:

Many progressive companies choose to apply salary increases retroactively once the employee returns from maternity leave. This practice ensures that the employee does not miss out on the salary increase due to her absence.

Legal Perspective:

There is no explicit mandate in Indian law that requires the payment of an increased salary during the maternity leave period. However, best practices and fairness might suggest adjusting the employee's salary once they return.

In conclusion, while Indian law does not explicitly require the adjustment of maternity benefits to include salary increases granted during maternity leave, doing so could be seen as a fair and supportive practice. It would be prudent for your company to review its policies and consider aligning them with best practices to support employees on maternity leave.

Thanks

It's a well-known fact that 'appraisal' and the resultant grant of '(periodical) increment' for an employee's performance during the pertinent previous year are obvious. If that is the case, then why should there be a second thought about whether to give effect to it or not?

Maternity Leave and Employee Rights

A female employee going on maternity leave is not unexpected, nor is it unlawful. Isn't it unfair to deny an increment for past performance? When an enterprise doesn't hesitate to employ females in the reproductive age group, those employees rightly deserve maternity benefits, including maternity leave when she's pregnant as per the law. Any thought to deny maternity leave and increment on the plea that she might not resume work after the expiry of maternity leave is not only unethical but also unjust and inhuman.