Maternity Benefits in India

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Dec. 20 – One of the primary objectives of India’s Maternity Benefit Act (1961) is to maintain the health of a pregnant female employee and her child. The act applies to every factory, mine or plantation (including those belonging to government), and to every shop or establishment wherein 10 or more people are employed.

To be eligible to receive maternity benefits, the pregnant female employee must have worked for at least 80 days within the 12 months immediately preceding her date of delivery. Pregnant female employees can receive payment of up to six weeks of leave before delivery, and then can receive payment while taking up to six weeks of leave after delivery (within 48 hours of submitting proof of birth).

There are two types of benefits provided under the Maternity Benefit Act:

  • Cash benefits
  • Non-cash benefits

Cash benefits include:

  • 84 days of leave with pay
  • A medical bonus of INR1,000
  • Additional paid leave of up to one month if necessary
  • In case of miscarriage, six weeks leave with pay

Non-cash benefits include:

  • Light work for 10 weeks (six weeks plus one month) before delivery
  • Two 15-minute nursing breaks until the child is 15 months old
  • Guarantee to not be discharged or dismissed while on maternity leave
  • No charge to her disadvantage while on maternity leave

Contravention of this act incurs a minimum prison sentence of three months, with a maximum of one year. A fine of INR2,000-INR5,000 may also be imposed.

Case Study

Ms. AB was employed in a company for the past 22 months and wishes to avail maternity benefits under the Maternity Benefit Act. She was receiving an annual salary of INR375,000, paid in monthly installments of INR31,250.

In addition to the non-cash benefits listed above, she is entitled to cash benefits under the act that include:

  1. Advance payment of six weeks leave before delivery – INR46,875
  2. Advance payment of six weeks leave after delivery – INR46,875 (after submitting proof of birth)
  3. Medical bonus – INR1,000
  4. Additional leave with pay up to one month – INR31,250

The total cash benefits that Ms. AB is entitled to amount to INR213,500.

Furthermore, Ms. AB may not be dismissed while she is on maternity leave, and may also not be charged any penalty for not performing her work duties while on maternity leave. She is also entitled to be given light work up to 10 weeks prior to the delivery of the child, and two 15-minute nursing breaks per day until the child is 15 months old.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email india@dezshira.com, visit www.dezshira.com, or download the company brochure.

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