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.
From India, Hyderabad
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1From India, Hyderabad
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Sorry, in the above query year not typed correctly. If an employee is on maternity leave since Feb 2017?.
From India, Hyderabad
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From India, Hyderabad
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Dear member,
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.
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?
From India, Noida
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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.
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?
From India, Noida
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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
From India, Guntur
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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
From India, Guntur
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Dear Sabiha,
Whether do 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.
From India, New Delhi
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Whether do 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.
From India, New Delhi
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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
From India, Kannur
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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
From India, Kannur
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Dear Mr MADHU, Please peruse the attachment of Judgement wherein it has been held that Maternity Benefit is not Salary
From India, New Delhi
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From India, New Delhi
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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 ESI Act, 1948, and rules/regulations framed thereunder (Ref. Section 2(22).
From India, Noida
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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 ESI Act, 1948, and rules/regulations framed thereunder (Ref. Section 2(22).
From India, Noida
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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 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.
Now, coming to the views of 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.
Madhu.T.K
From India, Kannur
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Now, coming to the views of 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.
Madhu.T.K
From India, Kannur
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