THE ESI ACT,1948

&
MATERNITY BENEFITS
ACT,1961

FLOW OF THE PRESENTATION

ESI ACT,1948
Intro, Object, Scope
Benefits,Rules, Amendments
Calculation of ESI

MATERNITY BENEFITS ACT

Intro,Object and Scope
Benefits,Rules and
Amendments
Calculation

EMPLOYEES STATE INSURANCE

ACT,1948

OBJECTIVE & APPLICABILITY

OBJECTIVE OF THE ACT

To provide for certain cash benefits to the employees in case of sickness, maternity,
employment injury and medical facilities in kind and contains provisions for certain
other matters having bearing thereon

APPLICABILITY OF THE ACT

The act applies to all factories employing 10 or more employees

Does not apply to a mine, railway running shed and specified seasonal factories
The term employee as defined in Sec.2(9) of the ESI Act has a wide connotation
and would include within its scope every type of clerical, manual, technical and
supervisory functions.
Persons whose remuneration does not exceed Rs 15,000 a month are covered
The Act does not make any distinction between technical or non-technical
employees. There is also no distinction between those employed on time-rate or
piece rate basis.

APPLICABILITY (Contd.)

The following persons have been held to be employees within the meaning of Section
2(9) of the ESI Act:
Employees employed directly by the principal employer and those employed by or through a
contractor on factory premises and those employed outside factory premises under supervision
of principal employer.
Also includes:
Persons engaged in purchase of raw materials
Administrative staff
Persons engaged for distribution and sales of products and similar functions
Doesnt include member of Indian Naval, Army or Air force
The following can be deemed as wages:
All remuneration paid in cash if terms of contract fulfilled
Includes any payment in any period of authorized leave, lockout or strike which is not illegal
Layoff compensation
Other remuneration paid at intervals not exceeding two months
Does not include:
Contribution paid to PF or pension fund
Travelling allowance or value of travelling concession
Gratuity payable on discharge.
Pay in lieu of notice of retrenchment compensation

BENEFITS
Medical
Benefit

Sickness
Benefit

Maternity
Benefit

Disablement
Benefit

Dependent
Benefit

Funeral
Benefit

EXEMPTION of persons or class of persons

(sec.88)
App. Govt. is authorized to exempt any person or class
of person from the operation of the act
Any exemption granted shall be notified by the
notification in the Official Gazette.
Such person or class of persons must be working in a
factory/establishment
Any exemption granted shall be accompanied with
such conditions as the appropriate Govt. may think fit
to impose

EXEMPTION of a factory or establishment belonging

to Govt./any local authority
App.Govt. must consult the Corporation
Any exemption granted shall be notified by the
notification in the Official Gazette.
Exemptions shall always be subj. to the conditions
imposed by the Govt.
Exemptions shall always be in order only if the
employees in any such factory/establishment are
already in receipt of benefits substantially similar or
superior to the benefits provided under this act.

EXEMPTION from one or more provisions of the act

(sec.91)
Exemption may be granted to any factory or
establishment or any person or class of person by
App.Govt.
Any exemption granted shall be notified by the
notification in the Official Gazette.
Any exemption granted under the sec.87,88,90 or 91
in respect of any person or class of person may be
enforced either prospectively or retrospectively the
date of its enforcement has to be specified (sec.91-A)

CALCULATION OF ESI

Employee's State Insurance Definition:

Employee's State Insurance scheme is a self-financing social
security and health insurance scheme for Indian workers. Any
labour who earns below Rs 15000 as his or her monthly
salary will be covered under the ESI. Both the employer and
employee donate for ESI. Employer's contribution is around
4.75% and employee's contribution is 1.75%.
Example 1:
Find out the ESI for the gross salary of Rs 9,000?
Step 1:
Enter the salary, For e.g. 9,000
Step 2:
Employee contributes 1.75% for ESI. Now compute as shown
here, ESI = 9,000*(1.75/100) = 158
Step 3:
Employer contributes 4.75% for ESI. Compute as shown here,
ESI = 9,000*(4.75/100) = 428

In case the salary goes above Rs. 15,000, say to Rs 17,000,

during the contribution period, should we calculate ESI
on the actual salary (Rs 17,000) or should the salary be
restricted to Rs 15,000 for ESI calculation?

ESI should be calculated on total ESI salary and the

salary should not be restricted to Rs 15,000 in case the
salary goes above Rs 15,000.
If the total ESI salary is Rs 17,000, ESI deduction and
contribution should be calculated on Rs 17,000 and not
on Rs 15,000.
Payroll managers should note that employees get
additional benefits on the ESI amount calculated on salary
above Rs 15,000.

POINTS TO KEEP IN MIND Once the ESI contribution begins, the contribution should
continue until the end of the contribution period (Apr to
Sep or Oct to Mar) even if the salary (for the purpose of ESI
calculation) increases beyond Rs 15,000 per month during
the contribution period.
During the contribution period ESI should be calculated on
total ESI salary and the salary should not be restricted to
Rs 15,000 in case the salary goes above Rs 15,000.

MATERNITY BENEFITS ACT,1961

PURPOSE & OBJECTIVE

PURPOSE OF THE ACT
The Maternity Benefits Act, 1961 provides benefits aimed
to protect the dignity of motherhood by providing for the
full and healthy maintenance of women and her child when
she is not working.
OBJECTIVE OF THE ACT
An act to regulate the employment of women in certain
establishment for certain period before and after child
birth and to provide for maternity benefit and certain other
benefits

SCOPE OF THE ACT

- It is applicable to mines, factories, circus industry,
plantations, shops and establishments employing ten or
more persons
- It can be extended to other establishments by the State
Governments with the approval of the Central Government,
after giving not less than two month's notice of its
intention of so doing, by notification in the Official Gazette

BENEFITS UNDER THE ACT

(A) Monetary Benefits
84 Days Leave with pay before/after delivery.
A medical bonus of Rs. 1,000/ Take the pay for 6 weeks after/before child birth within 48
hrs of request
An additional leave with pay up to one month
[Proof of illness]
In case of miscarriage -Six weeks leave with average pay.
Tubectomy operation -Leave with wages @ of maternity
benefit for a period of 2 weeks.

(B) Non Monetary Benefits

Light work for 10 weeks (6 weeks plus 1 month)
before delivery.
2 Nursing breaks of 15 Minutes until the child is 15
months old.
No discharge or dismissal while on maternity leave.
No charge to her disadvantage in any conditions of
her employment while on maternity leave.
Pregnant women discharged or dismissed may still
claim maternity benefit from employer.

FORFEITURE
A Female can be deprived of maternity benefit:
1. If she works in other establishment after going on
maternity leave
2. During her period of pregnancy, she is dismissed for gross
misconduct.
Willful destruction of employers assets
Assaulting any superior or co worker
Criminal offence involving moral turpitude
Theft, fraud or dishonesty
3. Within 60 days from date of deprivation of maternity
benefit, any Women can appeal to the authority prescribed by
law. The decesion of such authority will be final.

DUTIES & PENALTIES OF EMPLOYER

Pay Maternity benefit and/ or medical bonus

Give nursing breaks
Do not dismiss and discharge a pregnant woman.
Prepare and maintain the prescribed registers and records
and submit prescribed returns
Violations of the provisions of the Maternity Benefit Act,
1961 can be punishable with imprisonment of 3 months -1
Year or with fine to Rs. 500 or both.
Beside, if the violation is related to non-payment of the
maternity benefit or any other amount, the court can
recover this amount as if it is a fine and pay it to the
aggrieved party/person

AMENDMENTS
Short title and commencement.
(1) This Act may be called the Maternity Benefit (Amendment)
Act, 2008.
(2) It shall come into force on such date as the Central
Government may, by notification in the Official Gazette, appoint
2. Substitution of new section for section 8.
Payment of medical bonus.
(1) Every woman entitled to maternity benefit under this Act
shall also be entitled to receive from her employer a medical
bonus of one thousand rupees, if no pre-natal confinement
and post-natal care is provided for by the employer free of
charge.
(2) The Central Government may before every three years, by
notification in the Official Gazette, increase the amount of
medical bonus subject to the maximum of twenty thousand
rupees.

ARTICLE GIST: Penalised for Pregnancy

Source:
http://www.telegraphindia.com/1120807/jsp/nation/story_15824271.jsp#.VDQNIvmSyME

Indrani Chakraverty had been working for a Delhi design

firm for four years. Suddenly in August 2009, when she was
carrying her first child, she was told over phone that she was
sacked.
She filed a criminal case against the firm-for violating the
Maternity Benefit Act, 1961, which forbids an employer from
terminating the services of a pregnant woman unless there are
complaints of gross misconduct against her.
The only thing that changed was I was pregnant and unable to
give them the 24x7 time I gave them earlier. Also, its not that I
didnt work while I was pregnant. I delivered the CWG designs
just before I was terminated.
On July 26, Indrani won Rs 7.5 lakh as settlement money from
the company on orders from Delhi High Court.

THANK YOU!