All about Maternity Benefits Act and ESI Act

Ever since the Maternity Benefit Act’s amendment came, there’s a lot of confusion around this act and its relation to Employees’ State Insurance Act. Here’s all you need to know about Maternity Benefit Amendment Act 2016 and Employees’ State Insurance Act.

Maternity Benefit Amendment Act 2016

Maternity Benefit Act 2016 came into force from 1st April 2017 and its work from home provision came into existence from 1st July 2017.

  • This act has introduced work from home for new mothers who can avail it after 26 weeks of the leave period. However, this will depend upon the nature of her work and mutual agreement with an employer.
  • The previous Maternity Benefit Act 1961 covered only 12 weeks of maternity leave, which she can claim only when the woman has worked for 80 days with the same employer in past year.
  • A woman is entitled to receive an average daily wage during maternity leave, which means past three months average just before starting of maternity period.
  • The act also states that the woman is not liable to do any tedious work that might hinder with her pregnancy 10 weeks before due date.
  • In case of miscarriage, a woman can still avail 6 weeks of leave and wages for this time.

Employees’ State Insurance Act

  • ESI Act is applicable to an establishment that employs 20 or more people, and it is also applicable to government factories or establishments.
  • People who earn up to INR 21,000 come under the coverage of ESI Act, in which employer pays 4.75% and the employee pays 1.75%.

PF allowance with MB Act and ESI Act

  • If an employee is covered under ESI, the employer is not liable to pay PF.
  • If the employee is not covered under ESI Act, then the employer will pay PF.

Whether MB Amendment Act 2016 Is Applicable To Women Covered Under ESI Act or Not

Generally, employees who are earning up to INR 21,000 receive maternity benefits under Employees’ State Insurance Act. The only condition is that the employee should have served for 70 days in previous two terms. But, Maternity Benefit Act 1961 is applicable to every woman without any wage threshold.

However, ESI Act states that an employee receiving benefits from this Act is not applicable for benefits from other enactments. Now, this makes it clear that an employee can’t benefit from MB Act when she is already receiving maternity benefits from ESI Act. Hence, if you are receiving ESI maternity benefits, the Maternity Benefit Act is not applicable.

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Rekha Jain

Rekha Jain

Vice President - Corporate Sales at Paysquare Consultancy Ltd.
Rekha has over 15 years of experience in providing payroll solutions across different industries. She has been pivotal in the growth strategy at Paysquare, both pan-India as well as in international locations. She is skilled in Personnel Management, Business Development, Employee Engagement, Recruiting, and HR Policies.
Views expressed are personal
Rekha Jain

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