Maternity benefit act "Right to payment" - not able to understand calculation part

Hi everyone,

I am not able to understand the calculation part of the following section of the Maternity Benefit Act 1961. Can anyone please guide me in this with an example?

"5. Right to payment of maternity benefit. -- (1) Subject to the provisions of this Act, every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day."

There are two aspects covered in this section:

1. The payment of maternity benefit is to be at the rate of the average daily wage.

2. The payment of maternity benefit has to be made for the period of her actual absence before the delivery, the day of actual delivery, and for six weeks after the delivery.

The interpretation of the said clauses is as follows:

The explanation to Section 5(1) clarifies what the average daily wage is; it is the average of the wages earned in the past three months for the days the pregnant woman has worked.

The next part makes it mandatory that at least for 6 weeks post-delivery, the woman employee is entitled to paid leave. The provision was made as the exact date of delivery remained unpredictable, and the mother and child get sufficient time to take care of their health.

But with the 2017 amendment to the MB Act, the provision is revised, and now it is as follows:

The Maternity Benefit Amendment Act has increased the duration of paid maternity leave available for women employees from the existing 12 weeks to 26 weeks. Under the Maternity Benefit Amendment Act, this benefit could be availed by women for a period extending up to a maximum of 8 weeks before the expected delivery date, and the remaining time can be availed after childbirth. For women who are having 2 or more surviving children, the duration of paid maternity leave shall be 12 weeks (i.e., 6 weeks before and 6 weeks after the expected date of delivery).

Hope the above clarifies.

Ok sir, but which 3-month period should I consider? May I calculate this 3-month period before her actual absence?

For example, she submitted a maternity leave letter to us on 01-05-2020. Now, may I consider the average salary for February, March, and April for wages?

Yes, minus the legalese, it can be safely said that the maternity benefit has to be the full salary which she has been getting for the past three months.

Dear ANONYMOUS Friend,

In addition to what is said by KK!HR, the female employee is also entitled to a medical bonus of Rs. 3500/-.

Regards,
Akhil Bhartiya

Dear Bhartiya Akhil,

Thank you for the information you provided. May I know within how many days we should disburse the bonus amount and the actual maternity benefit amount?

Thank you.

Dear Satishchandra123,

Please refer to Section 6(5) of the MB Act. According to this section, the payment of maternity benefits is to be made in two installments. The first installment, i.e., for the period preceding the expected delivery, is to be paid when the woman produces proof of her pregnancy. The second installment is payable within 48 hours of the production of proof of delivery. The medical bonus shall be paid along with the second installment of the maternity benefit.

Dear Bhartiya Akhil,

Thank you for the explanation. Now I got the point.

The salary will be the same as what was paid earlier - Basic + HRA + Other Allowances? Or is the Maternity Benefit calculation done on Basic + HRA and other allowances, not included?

The Maternity Benefit Act 1961 states that the average wages for the last three months are to be paid. The term wages is defined in the Act as all remuneration inclusive of DA, HRA, incentive bonus, and the cash value of concessional supply of food grains and other articles. It specifically excludes only bonus (other than incentive bonus), OT wages, pension fund, PF, and gratuity. So practically all allowances are included.

The test for inclusion in such cases is to include all allowances that are paid irrespective of the employee working or not and to exclude those that are directly correlated with the employee's attendance.

Please read the discussion on the subject in this link: https://www.citehr.com/225419-amount...nfits-act.html

The thumb rule for this calculation is:

There could be some hitches in calculating the average wages - the section reads: "...the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day."

When we discuss the average of the last 3 months preceding the ML, there could be doubt about abnormal payments due to OT wages, incentives (production/performance-linked), arrears for past periods, etc., which might vitiate the computation of average wage. In order to avoid confusion in this respect for average wages, one has to take into account the normal rate of salary/wages she could have been paid had she continued on duty. This should eliminate abnormal payouts that are linked to performance, extra hours on an actual basis not normally paid month on month.