Last year, India amended its maternity law – surpassing many European and Asian countries with regards to maternity benefits being provided to working mothers.
India’s Maternity Benefit (Amendment) Act, 2017 (the Act) has increased the duration of maternity leave from 12 weeks to 26 weeks for two surviving children. In cases where a woman has more than two children, the leave is limited to 12 weeks only.
Some of the other important provisions of the Act include the following:
The new Act also provides for additional maternity leave of four weeks in case of illness supported by a doctor’s opinion.
Find Business SupportTo claim leave prior to expected delivery, the employee should give a notice in writing stating the date of absence from work and a certificate of pregnancy. The employer is obliged to make payment in advance for this period.
Following the date of delivery, the employee must also send another notice with a certificate of delivery. Notably, remaining payment must be transferred within 48 hours.
Employers must note that during the maternity period women employees are entitled to full wages.
The Act applies to every factory, mine and plantation, and any shop or establishment in which ten or more persons are employed, or were employed on any day of the preceding twelve months. It does not, however, apply to factory or other establishments to which other maternity benefit laws apply.
To avail the maternity benefits, a woman employees must have worked in the establishment for a period of at least 80 days during the 12 months immediately preceding the date of her expected delivery.
For calculating the number of days on which a woman has actually worked in the previous year, the days she was on holiday with wages, must also be counted.
Employers must note that there is no wage ceiling or any restriction with regards to the type of work a woman is engaged in, for coverage under the Act. The definition of a woman employee under the Act extends the benefit to all women employees including those employed through an agency or on a contract basis.
Taking into account the health and safety measures of new mothers, the Act also mandates employers to ensure that no woman works during the six weeks immediately following the day of her delivery or her miscarriage. It is also illegal for an employer to discharge or dismiss a woman employee on account of such absence.
Furthermore, the employer must not employ pregnant woman employee to do any work of an arduous nature or work that involves long standing hours.
If an employer contravenes to the provisions or the rules of the Act, the Act provides for penalties either with imprisonment which may extend to one year, or with a fine which may extend to Rs 5000 (US$70), or with both.
One of the key challenges for employers providing maternity benefits in India is that they have to bear the cost of it on their own. Whereas in most other countries, the cost of maternity benefits is shared by both the employer and the state government.
Under the amended Act, the provision of full payment of wages during maternity leave, and building of mandatory creche facilities further hikes the costs for employers – increasing employers’ preference for hiring male workers.
Related ReadingTo support employers with the extra financial burden and ensure women’s equal participation at work, India’s labor ministry has recently proposed a policy.
Though yet to be finalized, the policy aims to reimburse employers the salaries paid for seven of the additional 14 weeks of maternity leave for female employees in the Rs 15,000 (US$208) salary bracket who have been Employment Provident Fund Organization (EPFO) subscribers for 12 months.
Besides the Maternity Benefit Act, there are several other laws in India that provide for maternity benefits in India.
The Employees’ State Insurance (ESI), a self-financing social security and health insurance scheme for workers provides for maternity benefits to women in lower-income jobs. It is applicable to employees earning Rs 15,000 (US$208) or less per month, with the employer contributing 4.75 percent and the employee contributing 1.75 percent.
Those who qualify may receive maternity benefits under the ESI scheme instead of the Maternity Benefits Act.
Other laws offering maternity benefits include the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955 that grants 12 weeks of maternity benefits; and the Factories Act, 1948 that grants 12 weeks of maternity leave with full wages.
Maternity laws in India are not highly convoluted. However, the country has various labor laws that provide maternity benefits to women in different sectors. These laws differ in their coverage, benefits, and financing of the benefits – making it tricky for companies to comply with the provisions.
To ensure that your company’s HR practices are in line with the country’s employment regulations and the recent amendments to the Maternity Benefit Act, it is advisable to employ a specialist consultant.
Editor’s Note: This article was first published in 2016 and is updated on November 15, 2018 to accommodate latest regulations.
About Us
India Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices in China, Hong Kong, Indonesia, Singapore, Vietnam, and Russia.
Our free webinars are packed full of useful information for doing business in India.
