Maternity Leave Compliance for Indian SMEs

Aarthi

Hello and welcome to The People Stack, brought to you by Offrd.co! I’m Aarthi, and today we’re diving into maternity leave compliance for Indian SMEs. Raj, you ready to bust some myths and get into the nitty-gritty?

Raj

Absolutely, Aarthi! This is one of those topics where even well-meaning founders and HR folks get tripped up. So, let’s start with the basics—who’s actually covered under the law?

Aarthi

Right, so if your company has 10 or more employees, you’re in. Doesn’t matter if they’re all in one office or spread out across branches—the maternity law applies. And it’s not just for permanent staff. It covers full-time, contractual, temporary, and even agency hires, as long as they’ve worked at least 80 days in the last 12 months before the expected delivery date.

Raj

Yeah, and that 80 days thing is where a lot of people get confused. I had a founder ask me last week, “Hey, my fixed-term contractor is pregnant, do I need to do anything?” And I was like, “If she’s crossed 80 days, you absolutely do!”

Aarthi

Exactly! I actually had a friend—she runs a small design studio—who thought only her permanent staff were eligible. She found out the hard way when her agency designer asked for leave, and it sparked a whole policy review. So, don’t assume, just check the 80 days rule.

Raj

And then there’s the leave itself. For the first two kids, it’s 26 weeks of paid leave—up to 8 weeks before delivery, the rest after. If it’s the third child or more, it drops to 12 weeks. Adoption and surrogacy? If the child’s under 3 months, the mother gets 12 weeks from the handover date.

Aarthi

And let’s not forget, in case of miscarriage or termination, there’s 6 weeks of paid leave right after. Plus, if there’s a pregnancy-related illness—like complications or recovery from surgery—she can get up to an extra month of paid leave with medical proof.

Raj

One thing that’s non-negotiable—the first 6 weeks after childbirth are compulsory rest. Even if the employee says she wants to come back early, you can’t legally allow it. That’s for her health and the baby’s.

Aarthi

Now, let’s talk about pay—because this is where a lot of SMEs, honestly, mess up. Maternity leave is fully paid leave. That means the same pay she’d get if she was working—basic, HRA, DA, all the regular allowances. You can’t just pay the basic and call it a day.

Raj

Yeah, and you can’t restructure her salary to reduce the payout either. I actually got a customer query at Offrd.co recently—someone wanted to know if they could move allowances around during maternity leave to save costs. That’s a big no-no. Not only is it illegal, but it can really backfire if the employee challenges it.

Aarthi

And if there’s a salary hike or increment during her leave, she gets it. No exceptions. Also, if you don’t provide free prenatal and postnatal care, you have to add a medical bonus to her pay. Today The medical bonus is one time and set at Rupees3500 as per Government regulations. it could change so keep tabs on it. So, don’t try to cut corners here.

Raj

Let’s be super clear about what you absolutely cannot do: No firing or termination because she’s pregnant or on leave. No notice of termination that ends during her leave. No cutting pay, perks, or seniority. No asking her to come back early, and definitely no work in those first 6 weeks after childbirth.

Aarthi

And when she returns, she has the right to her old job or an equivalent one—same pay, same benefits. No role downgrade, no loss of seniority. She should still be considered for promotions, appraisals, and bonuses. Her service is continuous, so maternity leave counts towards gratuity, leave accrual, and PF contributions.

Raj

I think a lot of founders worry about the cost, but honestly, the legal and reputational risks of getting this wrong are way higher. And, you know, it’s just the right thing to do.

Aarthi

So, beyond just the leave and pay, there are a few more workplace requirements. For example, nursing breaks—two paid breaks every day until the child is 15 months old. And if you have 50 or more employees, you need to provide or tie up with a crèche, and allow up to four visits a day.

Raj

And don’t forget about safe duties. Pregnant employees shouldn’t be given hazardous or overly strenuous work. If needed, offer lighter duties. Also, every woman employee should know her rights from day one—share the policy in offer letters, handbooks, or during onboarding.

Aarthi

If you get this wrong, the penalties are serious—fines, even jail time for the employer or manager. Courts can order you to pay any unpaid maternity benefits directly to the employee. And honestly, the reputational damage from a public dispute can be way worse than just following the law.

Raj

For SMEs without a formal HR team, here’s a simple checklist: Confirm eligibility and leave dates, block the leave in your payroll system, make sure salary continues as normal—including increments, plan for coverage in her absence, and set a return-to-work meeting to support her transition back.

Aarthi

At the end of the day, maternity leave compliance isn’t just about ticking boxes. It’s about showing your team you care, and building trust. Get it right, and you build loyalty and a better employer brand. Get it wrong, and you risk penalties and losing good people.

Raj

So, review your policies, train your managers, and make sure your systems can handle maternity benefits. And, as always, consult a lawyer for your specific situation—what we’ve shared is based on our experience, but every case can be a bit different.

Aarthi

That’s a wrap for today’s episode! Thanks for joining us on The People Stack. Raj, always a pleasure chatting with you.

Raj

Same here, Aarthi. And thanks to everyone listening—don’t forget to check out O-f-f-r-d.c-o for more resources. We’ll see you next time!