ESI, Act 1948

ESI Scheme for India is an integrated social security scheme

tailored to provide Social Protection to workers and their
dependents, in the organised sector, in contingencies, such as
Sickness, Maternity and Death or Disablement due to an
employment injury or Occupational hazard
The ESI Act 1948 applies to
Non – seasonal Factories using power in and
Employing ten (10) or More persons

Non – seasonal and non‐ power using factories and

establishments employing twenty(20) or more persons

Employees of the Factories and Establishments in receipt of

wages not exceeding Rs.7500 /‐ Per month are covered
under this Act.
 The Scheme is primarily funded by contribution raised from
Insured Employees and their employers

Payable such as
1. Employees’ Contribution – 1.75% of the Wages
2. Employers’ Contribution – 4.75% of the Wages
TOTAL ‐ 6.5 % of the Wages

Employees in receipt of an average daily wage of Rs.40/‐ or Less, are

exempted from Payment of their share of contribution (w.e.f 8.4.00)
but are entitled to all social security benefits under the Scheme.
Employees covered under the ESI Act, are required to pay
contribution towards the scheme on a monthly basis. A
contribution period means a six month time span from 1st
April to 30th September and 1st October to 31st March.

Cash benefits under the scheme are generally liked with

contributions paid. The benefit period starts three months
after the closure of a contribution period.
 ADVANTAGES OF EMPLOYERS

Employers are absolved of their liabilities of providing

medical facilities to employees and their dependents
in kind or in the form of fixed cash allowance,
reimbursement of actual expenses, lump sum grant or
opting for any other medical insurance policy of
limited scope unless it is a contractual obligation of
the employer
Employers are exempted from the applicability of the: ‐
(a) Maternity Benefit Act
(b) Workmen's’ Compensation Act
in respect of employee covered under the ESI Scheme

Employers have their disposal, a productivity, well secured

workforce, an essential ingredient for better productivity
Employers are absolved of any responsibility in times of
Physical distress of workers such as sickness, employment
injury or Physical disablement resulting in loss of wages, as
the responsibility of Paying cash benefits shits to the
corporation in respect of insured employees

Any sum paid by way of contribution under the ESI Act is

deducted in computing ‘income’ under the Income Tax
Act
ESI Scheme Major Social Security Benefits in Cash and Kind
include …

1. Medical Benefit – for self & Family

2. Sickness Benefit – for self
3. Maternity Benefit ‐for self
4. Disablement Benefit
a). Temporary Disablement Benefit – for self
b). Permanent Disablement Benefit – for self
5.Dependents’ Benefit – for dependents in case of death due to
employment injury
In addition, the Scheme also provides some other need based benefits to
insured workers. These are:
i). Funeral Expenses – to a person who performs the last rites of
IP
ii). Rehabilitation allowances – for self
iii). Vocational Rehabilitation ‐ for self
iv). Old age Medicare – for self and spouse
v). Medical Bonus – for insured women and IP’s wife
 Medical Benefit
Means Medical care of IPs and their families, wherever covered
for medical benefit.

The Standard medical care consists of out‐door treatment,

in‐patient treatment, all necessary drugs and dressing, pathological
and radiological specialist consultation and care, ante‐natal and
post natal care, emergency treatment etc.,

Out‐door medical care is provided at the state Insurance

Dispensaries or Mobile Dispensaries manned by full‐time doctors
(service’ system) or at the private clinics of Insurance Medical
Practitioners (Panel System)
Insured worker and members of his family are eligible for medical
care from the very first day of the worker coming under ESI Scheme.

A worker who is covered under the scheme for first time is eligible for
medical care for the period of three months. If he/she contributes at
least for 78 days in a contribution period the eligibility is there up to
the end of the corresponding benefit period.

A worker is also eligible for extended sickness benefit when he/she is

suffering from any one of the long term 34 diseases listed in the Act.
This is admissible after the worker has been under ESI.
 SICKNESS BENEFIT

Sickness signifies a state of health necessitating Medical

treatment and attendance and abstention from work on
Medical grounds. Financial support extended by the
corporation is such a contingency is called sickness Benefit

Sickness Benefit represents periodical payments made to an

Insured Person for the period of certified sickness after
completing 9 Months in insurable employment.
To qualify for this benefit, contributions should have
been payable for at least 78 days in the relevant
contribution period.

The Maximum duration for availing sickness Benefit

is 91 days in two consecutive benefit periods

Standard benefit rate – this rate corresponds to the average

daily wage of an Insured person during the corresponding
contribution period and is roughly half of the daily wage
rate.
 EXTENDED SICKNESS BENEFIT …

Extended Sickness Benefit is a Cash Benefit paid for prolonged

illness (Tuberculosis / Leprosy, Mental and Malignant diseases) due
to any of the 34 Specified diseases

The IP should have been in continuous employment for a period of 2

years and should have contributed for atleast 156 days in 4 preceding
contribution periods
The daily rate of Extended Sickness Benefit is 40% more than
the standard Sickness Benefit rate admissible

After exhausting sickness Benefit Payable for 91 days the

Extended Sickness Benefit is payable upto further period of 124 /
309 days that can be extended upto 2 years in special
circumstances
 ENHANCED SICKNESS BENEFIT …

Is Cash Benefit for IP undergoing sterilisation operation

of vasectomy / tuberctomy for family planning.

The contributory conditions are the same as for claiming

sickness benefits

The daily rate of this benefit is double the standard

benefit rate. Say, not less than the daily wage.
The benefit rate of this benefit is double the standard
benefit rate. Say, not less than the daily wage.

The benefit is available upto 7 days for vasectomy and

upto 14 days for tubectomy operations.
 Maternity Benefit
is cash payable to an Insured women for the specified period of
abstention from work for confinement or mis‐carriage or for
sickness arising out of pregnancy, “confinement” “premature birth of
child or miscarriage” “confinement” connotes labour after 26 weeks
of pregnancy whether the result issue is alive or dead,

“Miscarriage” means expulsion of the contents of a pregnant uterus at

any period prior to or during 26th week of pregnancy.

Criminal abortion or miscarriage does not, however, entitle to

benefit.
The Benefit is paid as follows (Duration)
a). For Confinement
For a total period 12 Weeks beginning not more than 6 weeks
before the expected date of child birth, if the insured women
dies during confinement or with in 6 weeks thereafter, leaving
behind the living child, the benefit continues to be payable for
the whole of the period. But the child also die during that
period, the benefit will be paid upto and including the day of
the death of the child.
b)For Miscarriage
For the period of 6 weeks following the date of
miscarriage

c)For sickness arising out of pregnancy, confinement, Premature

birth of child or miscarriage :
For an additional period or upto four weeks.
In all the cases, the benefit is paid only if the insured women
does not work for remuneration during the period for which
benefit is claimed.

There is no waiting period.

 Disablement Benefit …
a). Temporary disablement benefit :

In case of temporary disability arising out of an employment injury or

occupational disease.,
Disablement benefit is admissible to insured person for the entire
period so certified by an Insurance Medical officer / Practitioner for
which IP does not work for wages.
The benefit is not subject to any contributory condition and is
payable at a rate which is not less than 70% of daily average wages.
However, not payable if the incapacity lasts for less than 3 days
excluding the date of accident.
 Permanent disablement benefit …

In case an employment injury or occupational disease results in permanent,

partial or total loss of earning capacity,
Periodical payments are made to the IP for life at a rate depending on the actual
loss of earning capacity as may be determined and certified by a
duly‐constituted Medical Board.
The rates of Disablement Benefits are determined in accordance with the
provisions of Rule 57 of ESI (Central) Rules, 1991.

In order to protect the erosion in real value of the periodical payments of

Permanent Disablement benefits, against rise in the cost of living index,
periodical increases are granted, based on actuarial calculation
 Dependants’ Benefit …

Dependents Benefit is a monthly pension payable to the eligible dependents of an

insured person who dies as a result of an Employment Injury or occupational disease

Beneficiaries and Duration of benefit

a)Widow / widows during life or until remarriage
b)Legitimate or adopted son until age 18 or if legitimate son is infirm, till infirmity lasts.
c)Legitimate or adopted unmarried daughter until age 18 or until marriage, whichever is
earlier, or if infirm, till infirmity lasts and she continues to be unmarried.

In the absence of any widow or legitimate child, the benefit is payable to a parent or
grandparent for life, to any other male dependent until age 18 or to an unmarried or
widowed female dependent until age 18.
Funeral Expenses

Funeral Expenses are in the nature of lump sum payment up

to a maximum of Rs.2500/- made to defray the expenditure
on the funeral of deceased IP. The amount is paid either to
the eldest surviving member of the family or, in his absence,
to the person who actually incurs the expenditure on the
funeral.
Under Section 39(5)(a) of the ESI act, read with Regulation 31(A) of
the ESI (General) Regulations 1950, the employer is liable to pay
simple interest at the rate of 15 percent per annum in respect of
each day of default or delay in payment contributions.

In addition, under the Provision of Regulation 31‐ C of ESI (General)

Regulations, 1950, read with sec.85(B)(i) of the ESI Act, the
Corporation is empowered to recover damages.
 CONTRIBUTIONS

The contributions have to be paid at such rates as may be prescribed by the Central
Government.

The present rates of contribution are 4.75 percent and 1.75 percent of workers wages
by employers and employees respectively.

The wage period in relation to an employee shall be the unit in respect of which all
contributions shall be payable.

The contributions payable in respect of each wage period shall ordinarily fall due on
the last day of the wage period.
 Principal employer to pay contributions in the first instance

According to Section 40 of the Act, it is incumbent upon the principal employer to pay in respect of
every employee whether directly employed by him or by or through an immediate employer, both
the employers contributions and the employees contribution.

However, he can recover from the employee (not being an exempt employee) the employees
contribution by deduction from his wages and not otherwise. Further Section 40 provides that the
principal employer has to bear the expenses of remitting the contributions to that Corporation.

According to Section 39(5) of the Act, if any contribution payable is not paid by the principal
employer on the date on which such contribution has become due, he shall be liable to pay simple
interest at the rate of 12 per cent per annum or at such higher rate as may be specified in the
regulations, till the date of its actual payment.
Recovery of contribution from immediate employer

According to Section 41, principal employer who has paid contribution in respect of an employee
employed by or through an immediate employer is entitled to recover the amount of contribution so
paid (both employers and employees contribution) from the immediate employer either by deduction
from any amount payable to him by the principal employer under any contract or as a debt payable by
the immediate employer.

However the immediate employer is entitled to recover the employees contribution from the employee
employed by or through him by deduction from wages and not otherwise.

Right to receive benefits is not transferable or assignable. When a person receives benefits under this
Act, he is not entitled to receive benefits under any other enactment.
EMPLOYEES’ INSURANCE COURT (E.I. COURT)

Section 74 of the Act provides that the State Government shall by notification in the Official Gazette
constitute an Employees’ Insurance Court for such local area as may be specified in the notification.

The Court shall consist of such number of judges as the State Government may think fit. Any person
who is or has been judicial officer or is a legal practitioner of 5 years standing shall be qualified to be
a judge of E.I. Court.

The State Government may appoint the same Court for two or more local areas or two or more
Courts for the same local area and may regulate the distribution of business between them.

The Employees’ Insurance Court has jurisdiction to adjudicate disputes, namely, whether any person
is an employee under the Act, rate of wages/contribution, as to who is or was the principal employer,
right of a person to any benefit under the Act.

The EI Court also has jurisdiction to decide claims for recovery of contribution from principal
employer or immediate employer, action for failure or negligence to pay contribution, claim for
recovery of any benefit admissible under the Act.
 EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952

Provident Fund schemes for the benefit of the employees had been introduced by some
organisations even when there was no legislation requiring them to do so.

In 1952, the Employees Provident Funds Act was enacted to provide institution of Provident Fund
for workers.

The Act was passed with a view to making some provision for the future of the industrial worker
after his retirement or for his dependants in case of his early death and inculcating the habit of
saving among the workers.

The object of the Act is to provide substantial security and timely monetary assistance to industrial
employees and their families when they are in distress and/or unable to meet family and social
obligations and to protect them in old age, disablement, early death of the breadwinner and in
some other contingencies.
APPLICABILITY OF THE ACT

Is applicable from the date of functioning or date of set-up of establishments provided the
factory/establishment employed twenty or more persons.

The Act, however, does not apply-to co-operative societies employing less than 50 persons and working
without the aid of power.

The Central Government is empowered to apply the provisions of this Act to any establishments
employing less than 20 persons after giving not less than two months' notice of its intention to do so by a
notification in the Official Gazette.

Once the Act is applied, it does not cease to be applicable even if the number of employees falls below
20.
IMPORTANT DEFINITIONS

Basic Wages

“Basic Wages” means all emoluments which are earned by an employee while on duty or on leave or on
holiday with wages in either case in accordance with the terms of the contract of employment and which
are paid or payable in cash to him, but does not include:

(i) the cash value of any food concession;

(ii) any dearness allowance (that is to say, all cash payments by whatever name called paid to an
employee on account of a rise in the cost of living), house- rent allowance, overtime allowance,
bonus, commission or any other similar allowance payable to the employee in respect of his
employment or of work done in such employment;
(iii) any presents made by the employer. [Section 2(b)]
“Employee” means any person who is employed for wages in any kind of work, manual or otherwise, in
or in connection with the work of an establishment and who gets his wages directly or indirectly from the
employer and includes any person

(i) employed by or through a contractor in or in connection with the work of the establishment;
(ii) engaged as an apprentice, not being an apprentice engaged under Apprentices Act, 1961 or
under the standing orders of the establishment. [Section 2(f)]

The Employees' Provident Fund (EPF) is a savings tool for the workforce. It is a scheme managed
under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, by the Employees'
Provident Fund Organization (EPFO).

Presently, the following three schemes are in operation under the Act:
• Employees’ Provident Fund Scheme, 1952
• Employees' Deposit Linked Insurance Scheme, 1976
• Employees' Pension Scheme, 1995
Insurance Scheme:

All members contributing to Provident Fund are automatically insured for their life during the
Service. Employer’s Contribution to the Insurance Scheme is 0.5%. The max. Amount payable to
the nominee in case of death of employee is Rs.6,00,000. Benefit.

Pension Fund:

All employees covered under Provident Fund become members of Pension Scheme. 8.33% of
Basic Salary upto Rs.15,000/- is contributed to Pension Scheme from employers share of
contribution. A minimum period of ten years of contributory service is required to be eligible to
receive monthly Pension. Full pension is payable on completion of 20 years of contributory service.
Contributions

Under EPF scheme, an employee has to pay a certain contribution towards the scheme and an equal
contribution is paid by the employer. The employee gets a lump sum amount including self and
employer’s contribution with interest on both, on retirement.

The contribution paid by the employer is 12% of basic wages plus dearness allowance plus retaining
allowance. An equal contribution is payable by the employee also. In the case of establishments which
employ less than 20 employees or meet certain other conditions, as per the EPFO rules, the contribution
rate for both employee and the employer is limited to 10 percent.

For most employees of the private sector, it’s the basic salary on which the contribution is calculated. For
example, if the monthly basic salary is Rs 30,000, the employee contribution towards his or her EPF
would be Rs 3,600 a month (12 percent of basic pay) while the equal amount is contributed by the
employer each month.
It should, however, be noted that not all of the employer’s share moves into the EPF kitty. Out of
employer’s contribution, 8.33% will be diverted to Employees’ Pension Scheme, Remaining 3.67 would
be for EPF.

On retirement, the employee will get his full share plus the balance of Employer’s share retained to his
credit in EPF account.

SCHEME EMPLOYEE’S EMPLOYER’S CENTRAL

Provident Fund 12% 3.67% (12% - 8.33%) Nil

Scheme

Insurance Scheme Nil 0.5% Nil

Pension Fund Nil 8.33% 1%

(diverted out of Provident fund’s 12%)
EPF Interest Rate

Under Para 60(1) of the Employees' Provident Fund Scheme, the Central Government, on the
recommendation of the Central Board of Trustees, declares the rate of interest to be credited
annually to the accounts of provident fund subscribers.

Withdrawals

Under the scheme, a member may withdraw the full amount standing to his credit in the fund in the
event of

i) Retirement from service after attaining the age of 55;

ii) Retirement on account of permanent and total incapacity;
iii) Migration from India for permanent settlement abroad; and
iv) Termination of service in the course of mass retrenchment (involving 3 or more persons).

The membership for this purpose is reckoned from the time of joining the covered
establishment till the date of the settlement of the claim,
The Scheme provides for non-refundable partial withdrawals/ advances to meet certain contingencies

1) Financing of life insurance policies;

2) House-building;
3) Purchasing shares of consumers co-operative credit housing societies;
4) During temporary closure of establishments;
5) Illness of member, family members;
6) Member's own marriage or for the marriage of his/her sister, brother or daughter/ son and
post-matriculation education of children;
7) Damages to movable and immovable property of members due to a calamity of exceptional
nature;
8) Unemployment relief to individual retrenchee members;
9) Cut in supply of electricity to the factory/establishment; and
10) Grant of advance to members who are physically handicapped for the .purchase of
equipment
Transfer

When a member leaves service in one establishment and obtains re-employment in another
establishment, whether exempted or unexempted, in the same region or in another region, he is required
to apply for the transfer of his provident fund account to the Regional Provident Fund Commissioner in
the prescribed form. The actual transfer of the provident fund accumulations with interest thereon takes
place in cases of

i) Re-employment in an establishment, whether exempted or unexempted, in another region/sub-

region;
ii) Re-employment in an exempted establishment in the same region/sub-region;
iii) Leaving service in an exempted establishment and re-employment in an unexempted
establishment;
iv) Re-employment in an establishment not covered under the Act
 PROTECTION AGAINST ATTACHMENT

Statutory protection is provided to the amount of contribution to Provident Fund under Section 10
from attachment to any Court decree.

Sub-section (1) of Section 10 provides that the amount standing to the credit of any member in
the Fund or any exempted employee in a Provident fund shall not in any way, be capable of being
assigned or charged and shall not be liable to attachment under any decree or order or any Court
in respect of any debt or liability incurred by the member or the exempted employee and neither
the official assignee appointed under the Presidency Towns Insolvency Act, 1909 nor any
receiver appointed under the Provincial Insolvency Act, 1920 shall be entitled to or have any
claim on any such amount.

It is further provided in sub-section (2) that any amount standing to the credit of a member in the
Fund or of an exempted employee in a Provident Fund at the time of his death and payable to his
nominee under the Scheme or the rules of the Provident Fund shall, subject to any deduction
authorised by the said scheme or rules, vest in the nominee and shall be free from any debt or
other liability incurred by the deceased or the nominee before the death of the member or of the
exempted employee and shall also not be liable to attachment under any decree or order of any
Court
 DETERMINATION OF MONEYS DUE FROM EMPLOYERS

Section 7A vests the powers of determining the amount due from any employer under the
provisions of this Act and deciding the dispute regarding applicability of this Act in the Central
Provident Fund Commissioner, Additional Provident Fund Commissioner, Deputy Provident Fund
Commissioner, or Regional Provident Fund Commissioner. For this purpose he may conduct such
inquiry as he may deem necessary.

Central Government has already constituted Employees Provident Fund Appellate Tribunal,
consisting of a presiding officer who is qualified to be a High Court Judge or a District Judge with
effect from 1st July, 1997 in accordance with provisions of Section 7D.

The proceedings before the tribunal shall be deemed to be a judicial proceeding within the meaning
of Sections 193 and 228 and for Section 196 of Indian Penal Code and Civil, 1908, it shall be
deemed to be a Civil Court for all purposes of Section 195 and Chapter XXVI of Code of Procedure.
Mode of recovery of moneys due from employers

Section 8 prescribes the mode of recovery of moneys due from employers by the Central
Provident Fund Commissioner or such officer as may be authorised by him by notification in
the Official Gazette in this behalf in the same manner as an arrear of land revenue.

The authorised officer under this Act shall issue a certificate for recovery of amount due from
employer to the Recovery Officer. The Recovery Officer has got the powers to attach/sell the
property of employer, call for arrest and detention of employer, etc. for effecting recovery. The
employer cannot challenge the validity of the certificate. The authorised officer can grant time
to the employer to make the payment of dues.

The Central Provident Fund Commissioner may require any person, from whom amount is
due to the employer, to pay directly to the Central Provident Fund Commissioner/Officer so
authorised and the same will be treated as discharge of his liability to the employer to the
extent of amount so paid. (Sections 8B to 8G)
Section 12 prohibits an employer not to reduce directly or indirectly the wages of any employee to
whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature
of old age pension, gratuity or provident fund or life insurance to which the employee is entitled
under the terms of employment, express or implied, simply by reason of his liability for the payment
of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme
or the Insurance Scheme.
 Employees’ Pension Scheme

Under Section 6A, Government has introduced a new pension scheme styled Employees‟ Pension
Scheme, 1995 w.e.f. 16.11.1995, in place of Family Pension Scheme, 1971.

The Employees‟ Pension Scheme is compulsory for all the persons who were members of the
Family Pension Scheme, 1971. It is also compulsory for the persons who become members of the
Provident Fund from 16.11.1995 i.e. the date of introduction of the Scheme.

Minimum 10 years contributory service is required for entitlement to pension.

The Scheme provides for payment of monthly pension in the following contingencies
(a) Superannuation on attaining the age of 58 years;
(b) Retirement;
(c) Permanent total disablement;
(d) Death during service;
(e) Death after retirement/ superannuation/permanent total disablement;
(f) Children Pension; and
(g) Orphan pension.
The amount of monthly pension will vary from member to member depending upon his pensionable
salary and pensionable service.

The formula for calculation of monthly members pension is as under :

Members Pension = *Pensionable Salary X (Pensionable Service + 2)

—------------------------------------------------------
70

To illustrate, if the contributory service is 33 years and pensionable salary is Rs. 5,000 per month,
the above formula operates as given below:

Members Pension = * ` 5,000 (33 + 2) = Rs. 2,500 p.m

The scheme has been amended making dependent parents eligible for pension. Further disabled
children are also made eligible for life long pension.
70
Under the Scheme, neither the employer nor the employee is required to make any additional
contribution.

A Pension Fund has been set up from 16.11.95, and the employers share of PF contribution
representing 8.33% of the wage is being diverted to the said Fund.

All accumulations of the ceased Family Pension Fund have been merged in the Pension Fund.

The Central Government is also contributing to the Pension Fund at the rate of 1.16% of the
wage of the employees.
 Employees’ Deposit-Linked Insurance Scheme

The Act was amended in 1976 and a new Section 6C was inserted empowering the Central
Government to frame a Scheme to be called the Employees‟ DepositLinked Insurance Scheme for the
purpose of providing life insurance benefit to the employees of any establishment or class of
establishments to which the Act applies.

The Employees Deposit-Linked Insurance Scheme, 1976 is applicable to all factories/establishments to

which the Employees‟ Provident Funds and Miscellaneous Provisions Act, 1952 applies.

The employees are not required to contribute to the Insurance Fund. The employers are required to
pay contributions to the Insurance Fund at the rate of 1% of the total emoluments, i.e., basic wages,
dearness allowance including, cash value of any food concession and retaining allowance, if any.

The employers of all covered establishments are required to pay charges to the Insurance Fund, at the
rate of 0.01% of the pay of the employee-members for meeting the administrative charges, subject to a
minimum of Rs. 2/- per month.
In case of death of a member, an amount equal to the average balance in the account of the deceased
during the preceding 12 months or period of membership, whichever is less shall be paid to the
persons eligible to receive the amount or the Provident Fund accumulations.

Factories/establishments, which have an Insurance Scheme conferring more benefits than those
provided under the statutory Scheme, may be granted exemption, subject to certain conditions, if
majority of the employees are in favour of such exemption.
 MATERNITY BENEFIT ACT 1961
History of the Law

The Convention of "Protection of Motherhood" adopted in 1919 was the earliest among the ILO
Conventions.

In 1921, the Government of India reported that it was not possible to adopt the Convention passed in
1919 due to various reasons.

A Bill was brought before the Central Legislative Assembly by a private member in 1924; urging the
Government to make it compulsory for the employers to provide maternity benefit to women workers.

However, the Bill was opposed by the government on the ground that the need for such a Bill was not felt
and that if legislation was passed to that effect, it might have adverse repercussions on the employment
of women.

The Royal Commission on Labour, in its recommendations, also stressed the need for suitable maternity
legislation, at least for women employed permanently in non seasonal factories.
As the Government of India was slow to 'act on these recommendations, the provincial governments took
the lead.

The Government of Bombay passed the Maternity Benefit Act, way back in 1926. It was followed by
Central Provinces, Madras, U.P., Bengal and some other provinces.

The period of leave, the quantum of benefit and the qualifying conditions varied slightly from province.

With a view to reducing the disparities relating to maternity protection under different provincial or State
enactments, the Central Government passed the Maternity Benefit Act in 1961.

The Government of Bombay passed the Maternity Benefit Act, way back in 1926..

It was followed by Central Provinces, Madras, U.P., Bengal and some other provinces.

The period of leave, the quantum of benefit and the qualifying conditions varied slightly from province.

With a view to reducing the disparities relating to maternity protection under different provincial or State
enactments, the Central Government passed the Maternity Benefit Act in 1961.
 MATERNITY BENEFIT ACT 1961

The Act regulates employment of woman in certain establishments for a certain period before and
after childbirth and provides for maternity and other benefits.

The Act applies to mines, factories, circus, industry, plantation and shops and establishments
employing ten or more persons, except employees covered under the Employees State Insurance
Act, 1948.

It can be extended to other establishments by the State Governments.

There is no wage limit for coverage under the Act, the Central Government is appropriate
Government in respect of the circus industry and Mines.

The maternity benefits are available to women before the birth of the child and after the birth of the
child.
Definitions 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, where fulfilled and includes.

1. Such allowances includes DA and HRA

2. Incentive bonus

3. The money value of the concessional supply of food grains and other articles, but does not
include
i. any bonus other than incentive bonus
ii. Overtime earnings and any deduction or payment made on account of fines
iii. 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,
iv. Any gratuity payable on the termination of service
Sec 4: Employment of or work by, women prohibited during certain period: no employer shall
knowingly employee a woman in any establishment during the six weeks immediately following the
day of her delivery, (miscarriage or medical termination of pregnancy)

No woman shall work in any establishment during the six weeks immediately following the day of
her delivery, (miscarriage or medical termination of pregnancy)

Sec 5. Right to payment of maternity benefits:

Every woman shall be entitled to, and her employer shall be liable for, the payment of maternity
benefit at the rate of her employer daily wage for the period of her actual absence, that is to say,
the period immediately preceding the day of her delivery, the actual day of her delivery and any
period immediately following that day.

No woman shall be entitled to maternity benefit unless she has actually worked in an establishment
of the employer from whom she claims months immediately preceding the date of her expected
delivery.

(Minimum period of Service is 80 days in the preceding 12 Months)

The time of maternity leave which a lady worker is qualified for has been expanded from 12 weeks to 26
(twenty) weeks (MBA Amendment Act, 2017).

The maximum period for which any woman shall be entitled to maternity benefit shall be (twenty sex weeks of
which not more than eight weeks ) shall preceded the date of her expected delivery.

The raising of the maternity profits by 12 weeks to 26 weeks is in accordance with the proposal of the World
Health Organization which gives that kids must be solely breastfed by the mother for the initial 24 weeks.

The maximum period entitled to maternity benefit by a woman having two or more than two surviving children
shall be twelve weeks of which not more than six weeks shall precede the date of her expected delivery - Sec 5

A woman legally adopts a child below the age of three months or a commissioning mother shall be entitled to
maternity benefit for a period of twelve weeks from the date the child is handed over to the adopting mother or
the commissioning mother, as the case may be. (To be read with Surrogacy Bill as there could be some
changes in relation to this)

In case where the nature of work assigned to a woman is of such nature that she may work from home, the
employer may allow her to do so after availing of the maternity benefit for such period and on such conditions as
the employer and the woman may mutually agree.
Creche Facilities in the Establishment (MBA Amendment Act, 2017)

Each foundation having 50 (fifty) or more representatives will be required to have an obligatory creche office
(inside the recommended good ways from the foundation), either independently or alongside other normal
offices. The lady is likewise to be permitted 4 (four) visits per day to the creche, which will incorporate the
interim for rest permitted to her - Sec 11 A
(Replica of the provisions on the same subject in Factories Act)

Sec 6. Notice of claim for Maternity Benefit and payment thereof

any woman employed in an establishment and entitled to maternity benefit under the provisions of this
Act may give notice in writing given in such a form as may be prescribed, to her employer,

stating that her maternity benefit and any other amount to which she may be entitled under this Act may
be paid to her or to such person as she may nominate in the notice and

that she will not work in any establishment during the period for which she receives maternity benefit.

In the case of a woman who is pregnant such notice shall state the date from which she will be absent
from work, not being a date earlier than eight weeks from the date of her expected delivery.

Any woman who has not given the notice when she was pregnant may give such notice as soon as
possible after the delivery.
Sec 7. payment of maternity benefit in case of death of a woman:

If a woman entitled to maternity benefit or any other amount under this Act dies before
receiving such maternity benefit or amount, or

where the employer is liable for maternity benefit under the second proviso to
subsection (3) of section 5,

the employer shall pay such benefit or amount to the person nominated by the woman
in the notice given under section 6 and in case there is no such nominee, to her legal
representatives.

Provided further that where a woman dies during this period, the maternity benefit
shall be payable only for the days up to and including the day of death.
Sec 8. Payment of Medical Bonus: every woman is entitled to maternity benefit under this Act shall also be
entitled to receive from her employer a medical bonus of one thousand rupees.

Central Government may increase this amount up to twenty three thousand rupees by Gazette
Notification.

Sec 9. Leave for Miscarriage- In case of miscarriage or medical termination of pregnancy, a woman shall
on production of such proof as may be prescribed, be entitled to leave with wages at the of maternity
benefit, for period of six weeks immediately following the day of miscarriage or medical termination
of pregnancy

Sec 9A. Leave with wages for tubectomy operation: in case of tubectomy operation, a woman shall, on
production such proof as may be prescribed be entitled to leave with wages at the rate of maternity benefit
for period of two weeks immediately following the day of her tubectomy operation
Sec 10. Leave for illness arising out of pregnancy, delivery, premature birth of child ( miscarriage,
medical termination of pregnancy or tubectomy operation :

If sufficient production of documents the employee shall get one month leave with wages

Sec 11. Nursing breaks:

Every woman delivered of a child who returns to duty after such delivery shall, in addition to the interval
for rest allowed to her, be allowed in the course of her daily work two breaks of the prescribed duration for
nursing the child until the child attains the age of fifteen months.

Sec 11A. Crèche facility:

Every establishment having fifty or more employees shall have the facility of crèche within such or along
with common facilities.

The employer shall allow four visits a day to the crèche by the woman, which shall also include the
interval for rest allowed to her. (Part of Factories Act)
Dismissal during absence or pregnancy. - Sec 12

(1) Where a woman absents herself from work in accordance with the provisions of this Act, it shall be
unlawful for her employer to discharge or dismiss her during or on account of such absence or to give notice
of discharge or dismissal on such a day that the notice will expire during such absence, or to vary to her
disadvantage any of the conditions of her service.

(2) The discharge or dismissal of a woman at any time during her pregnancy, if the woman but for such
discharge of dismissal would have been entitled to maternity benefit or medical bonus referred to in section
8, shall not have the effect of depriving her of the maternity benefit or medical bonus:

Provided that where the dismissal is for any prescribed gross misconduct the employer may, by order in
writing communicated to the woman, deprive her of the maternity benefit or medical bonus or both.

Any woman deprived of maternity benefit or medical bonus or both may, within sixty days from the date on
which the order of such deprivation is communicated to her, appeal to such authority as may be prescribed,
and the decision of that authority on such appeal, whether the woman should or should not be deprived of
maternity benefits or medical bonus or both, shall be final.
Appointment, Powers and duties of Inspectors

The appropriate Government may, by notification in the Official Gazette, appoint such officers as it thinks fit
to be Inspectors for the purposes of this Act and may define the local limits of the jurisdiction within which
they shall exercise their functions under this Act.

Powers and duties of Inspectors- Section-15

enter at all reasonable times any premises or place where woman are employed or work is given to
them in an establishment, for the purposes of examining any registers, records and notices required to
be kept or exhibited by or under this Act and required their production for inspection,

Examine any person whom he finds in any premises or place and who, he has reasonable cause to
believe, is employed in the establishment,

require the employer to give information regarding the names and addresses of women employed,
payments made to them, and applications or notices received from them under this Act, and

take copies of any registered and records or notices or any portions thereof.
 Power of Inspector to direct payments to be made- Section-17

Any woman claiming that- (Complaint)

(a) maternity benefit or any other amount to which she is entitled under this Act and any person
claiming that payment due under section 7 has been improperly withheld,

(b) her employer has discharged or dismissed her during or on account of her absence from work in
accordance with the provisions of this Act, may make a complaint to the Inspector.

Investigation

The Inspector may, of his own motion or on receipt of a complaint referred to in sub-section (1), make an
inquiry or cause an inquiry to be made and if satisfied that-

(a) payment has been wrongfully withheld, may direct the payment to be made in accordance with
his orders,

(b) she has been discharged or dismissed during or on account of her absence from work in
accordance with the provisions of this Act, may pass such orders as are just and proper according
to the circumstances of the case
Appeal

Any person aggrieved by the decision of the Inspector under sub-section may, within thirty days from
the date on which such decision is communicated to such persons, appeal to the prescribed authority.

The decision of the prescribed authority where an appeal has been preferred to it under subsection (3)
or of the Inspector where no such appeal has been preferred, shall be final.

Any amount payable under this section shall be recoverable by the Collector on a certificate issued for
that amount by the Inspector as an arrear of land revenue.

Forfeiture of maternity benefit- Section-18

If a woman works in any establishment after she has been permitted by her employer to absent herself
under the provisions of section 6 for any period during such authorised absence, she shall forfeit her claim
to the maternity benefit for such period.