Maternity leave calculation

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Arti (Querist)
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03 August 2021 We are a Software development Pvt.Ltd. Company at Pune., want to know the exact calculation for the employee who is on maternity leave and wants to join back after 3 months. Is the company is liable to pay performance incentives which were paid earlier extra than her salary per month. Actually not getting the term under maternity benefit act - a woman will be paid maternity benefit at the rate of her average daily wage in the three months preceding her maternity leave.

Asha Kanta Sharma

Asha Kanta Sharma

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09 July 2024 Under the Maternity Benefit Act in India, here are the key points regarding maternity benefits and incentives:

1. **Maternity Benefit Calculation**:
- A woman on maternity leave is entitled to receive maternity benefit at the rate of her average daily wage for the period of her actual absence from work.
- The average daily wage is calculated based on the wages she earned in the three months immediately preceding the maternity leave.

2. **Components of Maternity Benefit**:
- Maternity benefit typically includes the salary or wages that the employee would have earned if she had worked during the period of maternity leave.

3. **Performance Incentives and Allowances**:
- Performance incentives or allowances that are part of the regular salary structure should generally be included in the maternity benefit calculation if they are a regular part of the employee's compensation.
- If the performance incentives were paid based on her regular performance and are part of her average daily wage calculation for the three months preceding maternity leave, they should be factored into the maternity benefit.
- If the incentives were paid as a separate lump sum or as irregular bonuses not reflective of regular monthly wages, they may not necessarily be included in the maternity benefit calculation unless they can be considered part of her regular wages.

4. **Liability of the Employer**:
- The employer is liable to pay maternity benefit as per the provisions of the Maternity Benefit Act. This includes ensuring that the average daily wage is calculated correctly based on the employee's wages for the preceding three months.
- Incentives that form a regular part of the employee's salary structure and were paid in the months preceding maternity leave should typically be included in the maternity benefit.

5. **Legal Compliance**:
- It is advisable for employers to consult with legal or HR experts to ensure compliance with the Maternity Benefit Act and to correctly calculate the maternity benefit including any performance incentives.

In summary, performance incentives and allowances that are regular components of an employee's compensation should generally be included in the maternity benefit calculation under the Maternity Benefit Act. It's important for employers to accurately calculate and pay maternity benefits to comply with legal requirements and support employees during their maternity leave.