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What is the premium pay for special holidays?

Work performed on special days merits additional compensation of not less than 30%
on top of the basic pay or, a total of 130%, and at least 50% over and above the basic
pay or a total of 150% if the worker is permitted or suffered to work on said day, which
maybe scheduled rest day.

What are considered special holidays?

Executive Order No. 203 lists down two (2) special days:

• All Saints Day - November 1


• Last day of the year - December 31

What is the rule in case of absence during successive regular holidays?

The rule in case of successive regular holidays is as follows: An employee may not be
paid for both holidays if he absents himself from work on the day immediately preceding
the first holiday, unless he works on the first holiday, in which case, he is entitled to his
holiday pay on the second holiday.

What is the rule in case two regular holidays fall on the same day?

If two regular holidays fall on the same day (e.g. Araw ng Kagitingan and Good Friday
falling on April 9, 1993) is as follows: If employee did not work: 200% of basic pay: if the
employee worked: 300% of basic pay.

Are meal periods compensable?

No. As a general rule, employees are entitled to at least non-compensable one-hour


time-off for regular meals.

Can a coffee break be considered as compensable?

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Yes. Coffee breaks running from five (5) to twenty (20) minutes are considered as
compensable working time.

How is service charge distributed?

Service charges are distributed in accordance with the following percentage of sharing:

1. eighty-five (85%) for the employees, to be distributed equally


2. fifteen percent (15%) for the employer, for losses & breakages and distribution to
managerial employees

What is paternity leave?

Paternity leave refers to the benefit granted to a married male employee allowing him
not to report for work for seven (7) days (for each delivery for the first 4 deliveries) but
continues to earn the compensation therefore, on the condition that his spouse has
delivered a child or suffered miscarriage for purposes of enabling him to effectively lend
support to his wife in her period of recovery and/or in the nursing of the newly-born
child.

What are maternity leave benefits?

1. A female member who has paid at least three (3) monthly contributions in the 12-
month period immediately preceding the semester of childbirth or miscarriage
shall be paid a daily maternity benefit of 100% of her average daily salary credit
for 60 days or 78 days in case of caesarian delivery. The payment of daily
maternity benefit shall be a bar to the recovery of sickness benefit for the same
compensable period.
2. The maternity leave shall be extended without pay on account of illness
medically certified to arise out of the pregnancy, delivery, abortion or miscarriage,
which renders the woman unfit for work, unless she has earned unused leave
credits from which such extended leave may be charged.
3. The maternity leave shall be paid by the employer only for the first four (4)
deliveries by a woman-employee.

Is an unmarried pregnant woman entitled to maternity leave benefits?

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Every pregnant woman in the private sector, whether married or unmarried, is entitled to
the maternity leave benefits.

Are maternity leave benefits included in the computation of 13th month pay?

Maternity benefits, like other benefits granted by the SSS, are granted to employees in
lieu of wages and, therefore, may not be included in computing the employee's 13th
month pay for the calendar year.

Are voluntary or self-employed members of the SSS entitled to maternity leave


benefits?

Voluntary or self-employed members are not entitled to the maternity benefit because to
be entitled thereto, corresponding maternity contributions should be paid by employers.
Voluntary or self-employed members have no employers so they do not have maternity
contributions.

What is meant by statutory minimum wage?

The term "statutory minimum wage" refers to the lowest basic wage rate fixed by law
that an employer can pay his worker.

What is the basis for the computation of the statutory minimum wage?

The basis of the computation of the minimum wage rates prescribed by law shall be the
normal working hours which shall not be more than eight (8) hours a day.

What is the proper computation of night shift differential?

1. Where Night Shift (10pm to 6am) work is Regular work:

• On an ordinary day-- additional 10% of the basic hourly rate or a total of 110% of
the basic hourly rate
• On a rest day, special day or regular holiday - additional 10% of the regular
hourly rate on a rest day, special day or regular holiday or a total of 110% of the
regular hourly rate

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2. Where Night Shift (10pm to 6am) work is Overtime work:

• On an ordinary day - additional 10% of the overtime-hourly rate on an ordinary


day or a total of 110% of the overtime hourly rate on an ordinary day
• On a rest day/special day/regular holiday - additional 10% of the overtime-hourly
rate on a rest day/special day/regular holiday

Is withholding of wages and kickback allowed?

No. It shall be unlawful for any person, directly or indirectly, to withhold any amount from
the wages of a worker or induce him to give any part of his wages by force, stealth,
intimidation, threat or by any other means whatsoever without the worker's consent.

What is wage distortion?

Wage distortion is a situation where an increase in prescribed wage rates results in the
elimination or severe contraction of intentional quantitative differences in wage or salary
rates between and among employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation.

Who are entitled to 13th month pay?

All employers are required to pay their rank and file employees regardless of the nature
of their employment and irrespective of the method by which their wages are paid
provided they worked for at least one (1) month during the calendar year. (P.D. No. 851)

When should 13th month pay be paid?

The required 13th month pay shall be paid not later than December 24 of each year.
(P.D. No. 851)

What is a bonus? Is it demandable?

Bonus is an amount granted and paid ex gratia to the employee for his industry or
loyalty, hence, generally not demandable or enforceable. If there is no profit there

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should be no bonus. If profit is reduced, bonus should likewise be reduced, absent any
agreement making such bonus part of the compensation of the employee.

When is bonus demandable and enforceable?

On the basis of equitable considerations, long practice, agreement (e.g. CBA) and other
peculiar circumstances, bonus may become demandable and enforceable.
Consequently, if bonus is given as an additional compensation, which the employer
agreed to give without any condition such as success of business or more efficient or
more productive operation, it is deemed part of wage or salary, hence, demandable.

How should househelpers be paid/compensated?

The minimum wage rates of househelpers shall be the basic cash wages, which shall
be paid to the househelpers, in addition to lodging, food, and medical attendance.

What is the time and manner of payment of wages of househelpers?

Wages shall be paid directly to the househelper to whom they are due at least once a
month. No deductions there from shall be made by the employer unless authorized by
the househelper himself or by existing laws.

What is separation pay?

Separation pay is given to employees in instances covered by Articles 283 and 284 of
the Labor Code. An employee's entitlement to separation pay depends on the reason or
ground for the termination of his services. An employee may be terminated for just
cause (i.e. gross and habitual neglect of duty, fraud or commission of a crime) and other
similar causes as enumerated under Article 282 of the Labor Code and generally, may
not be entitled to separation pay. On the other hand, where the termination is for
authorized causes, separation pay is due.

What is the basis of computation of separation pay?

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The computation of separation pay shall be based on the latest salary rate, unless the
same was reduced by the employer to defeat the intention of the Labor Code, in which
case, the separation pay shall be based on the rate before the deduction.

The amount of the separation pay shall be multiplied with the number of years of actual
service. In computing the length of service, a fraction of at least six (6) months is
considered as one (1) whole year.

Minimum wage, definition and coverage

Republic Act 6727 (otherwise known as the Wage Rationalization Act) fixed the
statutory minimum wages applicable to different industrial sectors, namely: non-
agricultural, agricultural plantation and non-plantation, cottage/handicraft, retail and
service, depending upon the number of workers or capitalization or annual gross sales
in some sectors.

The Rules Implementing RA 6727 define the industrial sectors, as follows:

• "Agriculture" refers to farming in all its branches and among others, includes the
cultivation and tillage of the soil, production, cultivation, growing and harvesting
of any agricultural or horticultural commodities, dairying, raising of livestock or
poultry, the culture of fish and other aquatic products in farms or ponds, and any
activity performed by a farmer or on a farm as an incident to or in conjunction
with such farming operations, but does not include the manufacturing and/or
processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or other farm
products.
• "Plantation Agricultural Enterprise" is one engaged in agriculture with an area of
more than 24 hectares in a locality or which employs at least 20 workers. Any
other agricultural enterprise shall be considered as "Non-Plantation Agricultural
Enterprise"
"Retail Establishment" is one principally engaged in the sale of service to
individuals for their own or household use and is generally recognized as such.
• "Cottage/Handicraft Establishment" is one engaged in an economic endeavor in
which the products are primarily done in the home or such other places for profit
which requires manual dexterity and craftsmanship and whose capitalization
does not exceed P500,000.00 regardless of previous registration with the defunct
NACIDA.

The Act rationalized wage policy determination by establishing the mechanism and
proper standards, through the creation of Regional Tripartite Wage and Productivity
Boards to determine the wage rates in the different regions based on established
criteria. There is now a Board for each of the following regions:

• National Capital Region (NCR or Metro Manila)

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• Cordillera Administrative Region (CAR)
• Region I (Northern Luzon)
• Region II (Cagayan Valley)
• Region III (Central Luzon)
• Region IV (Southern Tagalog)
• Region V (Bicol Region)
• Region VI (Western Visayas)
• Region VII (Central Visayas)
• Region VIII (Eastern Visayas)
• Region IX (Western Mindanao)
• Region X (Northern Mindanao)
• Region XI (Southern Mindanao)
• Region XII (Central Mindanao)
• Region XIII (CARAGA)
• Autonomous Region for Muslim Mindanao (ARMM).

Existing Regional Wage Orders prescribe the daily minimum basic wage rates per
industry per locality within the region, in some instances depending upon the number of
workers and the capitalization. The Wage Orders likewise provide the basis and
procedure for exemption from compliance. Some Wage Orders grant allowances
instead of wage increases.

A. Coverage
The wage increase prescribed under Wage Orders apply to all private sector workers
and employees regardless of their position, designation or status, and irrespective of the
method by which their wages are paid, except the following:

• Household or domestic helpers, including family drivers and workers in the


personal service of another; (Their conditions of work are prescribed in R.A. No.
7665)
• Workers and employees in retail/service establishments regularly employing not
more than 10 when specifically exempted from compliance for a period fixed by
the Board.
• Workers and employees of distressed establishments when exempted from
compliance for a period fixed by the Board.
• Workers and employees of other firms or employers as determined by the Board
when exempted from compliance for a fixed point.

Coverage of holiday pay

This benefit shall apply to all employees except:

1. Those of the government and any of the political subdivisions, including


government-owned and controlled corporations;

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2. Those of retail and service establishments regularly employing less than ten (10)
workers;
3. Domestic helpers and persons in the personal service of another;
4. Managerial employees; and
5. Field personnel and other employees whose time and performance is
unsupervised by the employer including those who are engaged on task or
contract basis, purely commission basis or those who are paid a fixed amount for
performing work irrespective of the time consumed in the performance thereof.

Holiday pay in relation to leave of absence

1. All covered employees shall be entitled to holiday pay when they are on leave of
absence with pay. Employees who are on leave of absence without pay on the
day immediately preceding a regular holiday may not be paid the required
holiday pay if they have not worked on such regular holiday.
2. Employers shall grant the same percentage of the holiday pay as the benefit
granted by competent authority in the form of employee's compensation or social
security payment whichever is higher, if they are not reporting for work while on
such benefits.
3. Where the day immediately preceding the holiday is a non-working day in the
establishment or the scheduled rest day of the employee, he shall not be
deemed to be on leave of absence on that day, in which case he shall be entitled
to the holiday pay if he worked on the day immediately preceding the non-
working day or rest day.

Holiday pay of employee on piece rate basis, seasonal workers, or workers who
do not have regular working days

1. Where the covered employee is paid on piece rate basis, his holiday pay shall
not be less than his average daily earnings for the last seven (7) actual working
days preceding the regular holiday; Provided, however, that in no case shall the
holiday pay be less than the applicable statutory minimum wage rate.
2. Seasonal workers may not be paid the required holiday pay during off-season
when they are not at work.
3. Workers who do not have regular working days, such as stevedores, shall be
entitled to this benefit.

Definition, coverage and rates of premium pay

A. Definition of Premium Pay

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Premium Pay refers to the additional compensation required by law for work performed
within eight (8) hours on nonworking days, such as rest days and special days.

B. Coverage

This benefit applies to all employees but not to the following persons;

1. Government employees whether employed by the National Government or any of


its political sub-divisions, including those employed in government-owned and/or
controlled corporations;
2. Managerial employees, if they meet all of the following conditions:

• Their primary duty consists of the management of the establishment in which


they are employed or of a department or sub-division thereof.
• They customarily and regularly direct the work of two or more employees therein.
• They have the authority to hire or fire other employees of lower rank; or their
suggestions and recommendations as to hiring and firing and as to the promotion
or any other change of status of other employees are given particular weight.

1. Officers or members of a managerial staff if they perform the following duties and
responsibilities:

• The primary duty consists of the performance of work directly related to


management policies of their employer;
• Customarily and regularly exercise discretion and independent judgment; and
• i. Regularly and directly assist a proprietor or managerial employee whose
primary duty consist of the management of the establishment in which he is
employed or sub-division thereof; or
ii. execute under general supervision work along specialized or technical lines
requiring special training, experience, or knowledge; or
iii. execute under general supervision, special assignments and tasks; and
• Who do not devote more than 20% of their hours worked in a work week to
activities which are not directly and closely related to the performance of the work
described in paragraphs (1), (2) and (3) above.
• Domestic servants and persons in the personal service of another.
• Workers who are paid by results, including those who are paid on piece-work,
"takay", "pakiao" or task basis, and other non-time work if their output rates are in
accordance with the standards prescribed in the regulations, or where such rates
have been fixed by the Secretary of Labor and Employment.
• Field personnel if they regularly perform their duties away from the principal or
branch office or place of business of the employer and whose actual hours of
work in the field cannot be determined with reasonable certainty.

C. Premium Pay Rates

The minimum statutory premium pay rates are as follows:

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1. For work performed on rest days or on special days.
Plus 30% of the daily rate of 100% or a total of 130%
2. For work performed on a rest day which is also a special day.
Plus 50% of the daily rate of 100% or a total of 150%
3. *For work performed on a regular holiday which is also the employee's rest day.
plus 30% of the regular holiday rate of 200% based on his daily basic wage rate
or a total of 260%

*Not applicable to employees excepted in the holiday pay rule

Monthly-paid employees as distinguished from daily-paid employees

Monthly-paid employees are those who are paid every day of the month, including
unworked rest days, special days and regular holidays.

Daily-paid employees are those who are paid on the days they actually worked and on
unworked regular holidays.

Basis of minimum wage

The basis of the minimum wage rates prescribed by the law shall be the normal working
hours of eight (8) hours a day.

What is the present minimum wage fixing system in the country today?

Since 1989, minimum wage fixing is done on a regional basis. Previously, it was done at
the national level through acts of Congress or by presidential decrees or executive
orders.

The Regional Boards, located in each of the 16 regions of the country, are the wage
setting bodies established by virtue of Republic Act RA 6727, also known as the Wage
Rationalization Act issued on 01 July 1989. These Boards set minimum wages for
workers in the private sector.

What are the criteria for minimum wage fixing adopted by the Boards?

There are 10 criteria for minimum wage fixing under RA 6727 and one under the Rules
of Procedures for Minimum Wage Fixing, categorized into four major groups, namely:

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1. Needs of workers and their families

• demand for living wage


• wage adjustment vis-�-vis CPI
• cost of living and changes therein
• needs of workers and their families
• improvements in standards of living

2. Capacity to pay of employers/industry

• fair return on capital invested and to pay of employers


• productivity

3. Comparable wages

• prevailing wage levels

4. Requirements for national development

• need to induce industries to invest in the countryside


• effects on employment generation and family income
• equitable distribution of income and wealth along the imperatives of economic
social development

Can the regional boards issue a wage order even without a petition for wage
increase?

Yes, even in the absence of a filed petition for wage increase, Regional Boards can,
motu proprio, initiate action or inquiry on whether a wage order should be issued.

A public hearing is required before the Boards can issue a wage order.

Records show that the Boards issued a total of 133 Wage Orders since 1990. Of this
number, 62% (83) was issued motu proprio, while 38% (50) was issued by virtue of a
petition for wage increase.

Can the regional boards grant across-the-board wage increases?

The wage-setting function of the Regional Boards is confined to minimum wages.

While across-the-board (ATB) wage increases have been granted in the past, current
policy discourages the Boards from granting ATB adjustments as they create more

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distortions in the labor market which in turn affect adversely the incomes and standard
of living of workers and thier families. Specifically:

• ATB wage increases have greater impact on inflation


• ATB wage increases are disincentives to trade unionism
• ATB increases are not consistent with minimum wage fixing mandate of the
Boards

How long does it take the Boards to issue a wage order?

In general, the Boards can issue a wage order within 90 days, given the procedural
requirements under the Rules of Procedures for Minimum Wage Fixing. The Boards are
specifically required to issue a wage order within 30 days from date of the last public
hearing. Thereafter, a Wage Order becomes effective 15 days after it has been
published in a newspaper of general circulation in the area of jurisdiction.

How often can the Boards issue a wage order?

In general, the Boards can issue a Wage Order only once in a given year.

Within the 12-month period from effectivity of the wage order, no petition for wage
increase may be entertained, except when there is a supervening condition, such as an
extraordinary increase in prices of petroleum products and basic goods and services.

The existence of supervening condition is to be determined by the Boards and


confirmed by the NWPC.

Can the wage orders issued by the Boards be appealed?

Yes, any aggrieved party may file an appeal with the NWPC through the Board within
10 days from the date of publication of the Wage Order.

The grounds for appeal are:

• non-conformity with prescribed guidelines


• question of law
• grave abuse of discretion

How are wage distortions corrected?

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Should disputes arise as a result of wage distortion, RA 6727 provides for correcting the
distortions as follows:

• In organized firms, the employer and the union shall negotiate to correct the
distortion using the grievance procedures in the CBA or, if the dispute remains
unresolved, through voluntary arbitration.
• In unorganized firms, the employers and workers endeavor to correct the
distortion. Any dispute is settled by conciliation through the National Conciliation
and Mediation Board, or if it remains unresolved, by compulsory arbitration
through the National Labor Relations Commission.

This provision for correcting wage distortions is also stipulated in all Wage Orders being
issued by the Regional Boards.

Who are covered by wage orders issued by the Boards?

Wage Orders issued by the Boards cover only private sector workers, except for
household helpers and persons in the personal employ of another, including family
drivers.

What are the criteria and requirements to qualify for exemption from wage orders
issued by the Boards?

Sections 3 and 4 of the Rules on Exemption list down the specific criteria and
requirements to qualify for exemption, namely:

Distressed Establishments

a. For Stock Corporations/Cooperatives

• registers a deficit of 20% or more of the paid up capital as of last accounting


period and interim period immediately preceding the effectivity of the Wage
Order.
• registers capital deficiency/negative stockholders' equity as of the last full
accounting period or interim period immediately preceding the effectivity of the
Wage Order.

b. For Single Proprietorships/Partnerships/Non-stock,Non-profit Organization

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• registers a deficit of 20% or more of the total invested capital as of the 2
accounting periods and interim period immediately preceding the effectivity of the
Wage Order.
• registers capital deficiency/negative net worth as of the last full accounting period
or interim period immediately preceding the effectivity of the Wage Order

c. For Banks and Quasi-banks

• under receivership/liquidation certified by the Bangko Sentral ng Pilipinas


• under controllership/conservatorship

New Business Enterprises

• NBEs established outside the NCR and outside Export Zones within 2 years from
the effectivity of the Wage Order, classified as agricultural establishments or
establishments with total assets of 5M and below.

Retail/Service Establishments Regularly Employing Not More Than Ten Years

• engaged in the ratil sale of goods/services to end users, and


• employing not more than ten workers

Establishments Adversely Affected by Natural Calamities

• establishments located in an area under a state of calamity


• occurence of natural calamities in the area within 6 months prior to the effectivity
of the Wage Order
• losses or damage to properties as a result of the calamity amount to 20% or
more of the capital/stockholders' equity

What kind of exemption can be granted to qualified establishments?

The Board may grant a -

• Full exemption of one year for all categories of establishments


• Partial exemption equivalent to 50% may be granted in the case of distressed
establishments

Under the present Rules on Exemption, no extension of the exemption period beyond
one year is allowed.

What is the effect of a disapproved application for exemption?

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In case an application for exemption is not approved by the Board, the company shall
pay the mandated wage increase/allowance to all covered workers retroactive to the
date of effectivity of the Wage Order plus simple interest of 1% per month.

What is the overtime pay rate?

The minimum overtime pay rates vary according to the day the overtime work is
performed, as follows:

1. For work in excess of eight hours performed on ordinary working days -


additional 25%of the hourly rate
2. For work in excess of eight hours performed on a scheduled rest day, a special
day and a regular holiday - additional 30% of the hourly rate on said days. (Art.
87)

Who are entitled to service incentive leave?

Every employee who has rendered at least one (1) year of service is entitled to service
incentive leave of five (5) days with pay. (Art. 95)

What is a holiday pay?

Holiday pay is the premium given to an employee, pursuant to law, even if he did not
work on a regular holiday. An employee is entitled to 100% of his basic wage, even if he
did not work during such regular holiday. He is entitled to 200% of his basic pay, if he
worked in such day. (Art. 94)

Computation of wages

Computation of wages is governed by the following rules:

Computing Overtime:

On Ordinary Days
Number of hours in excess of 8 hours (125% x hourly rate)

On a rest day, special day or regular holiday


Number of hours in excess of 8 hours (130% x hourly rate)

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Computing pay for work done on:

A special day (130% x basic pay)


A special day, which is also a scheduled rest day (150% x basic pay)
A regular holiday (200% x basic pay)
A regular holiday, which is also a scheduled rest day (260% x basic pay)

Computing Night Shift Premium Where Night Shift is a Regular Work:

On Ordinary day (110% x basic hourly rate)


On a rest day, special day, regular holiday (110% of regular hourly rate for a rest day,
special day, regular holiday)

Computing Overtime on Night Shift:

On ordinary day (110%) x overtime hourly rate)


On rest day, special day or regular holiday (110% x overtime hourly rate for rest days,
special days, regular holidays)

Computing 13th Month Pay:

Total basic salary earned for the year exclusive of overtime, holiday, and night shift
differential pay divided by 12 = 13th month pay.

What is the principle of non-diminution of benefits?

The provision on the prohibition against elimination or diminution of benefits is clearly


and specifically concerned only with benefits already enjoyed on the date of the
promulgation of the law or of the affectivity of the wage order, and does not support to
apply to situations arising thereafter. (Art. 100)

What is night shift differential?

Night Shift Differential (NSD) is the additional compensation of ten percent (10%) of an
employee's regular wage for each hour of work performed between 10:00 PM and 6:00
AM. (Art. 86)

What is the Service Incentive Leave (SIL)?

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Every employee who has rendered at least one (1) year of service is entitled to a yearly
service incentive leave of five (5) days with pay.

This benefit does not apply to the following:

• government employees
• domestic helpers and persons in the personal service of another
• managerial employees
• field personnel and those whose time and performance is unsupervised by the
employer
• those already enjoying this benefit
• those enjoying vacation leave with pay of at least five (5) days
• those employed in establishments regularly employing less than ten (10)
employees

Meaning of "one year of service"

The phrase "one year of service" of the employee means service within 12 months,
whether continuous or broken, reckoned from the date the employee started working.
The period includes authorized absences unworked weekly rest days, and paid
legal/regular holidays. Where by individual or collective agreement, practice or policy
the period of working days is less than 12 months, said period shall be considered as
one year for the purpose of determining entitlement to the service incentive leave.

Availment/Commutation to Cash

The service incentive leave may be used for sick and vacation leave purposes. The
unused service incentive leave is commutable to its money equivalent at the end of the
year. In computing, the basis shall be the salary rate at the date of commutation.

The availment and commutation of this benefit may be on a pro rata basis.

Service Charges

Employees of employers collecting service charges are entitled to an equal share in the
85% of the total of such charges, except managerial employees. The remaining 15% of
the charges may be retained by the management to answer for losses and breakages
and for distribution to managerial employees, at the discretion of the management in the
later case. Service charges are collected by most hotels and some restaurants, night
clubs, cocktail lounges, among others.

Maternity benefits

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Every pregnant woman in the private sector, whether married or unmarried, is entitled to
maternity leave of sixty (60) days in case of normal delivery, abortion or miscarriage, or
seventy-eight (78) days in case of caesarian section delivery, with benefits equivalent to
100% of the average daily salary credit of the employee as defined under the Social
Security Law.

What is paternity leave?

Paternity leave is granted to all married male employees in the private sector,
regardless of employment status, (e.g. probationary, regular, contractual, project-based)
the purpose of which is to allow the husband to lend support to his wife during her
period of recovery and/or in the nursing of her newborn child.

The leave shall be for seven (7) days, with full pay, consisting of basic salary and
mandatory allowances fixed by the Regional Wage Board, if any, provided that his pay
shall not be less than the mandated minimum wage.

Availment of the paternity leave may be after the delivery, without prejudice to an
employer's policy of allowing the employee to avail of the benefit before or during the
delivery, provided that the total number of days shall not be more than seven (7) days
for each covered delivery.

Summary of latest wage orders and implementing rules issued by the Regional
Boards

Summary of latest wage orders and implementing rules issued by the Regional Boards

http://www.nwpc.dole.gov.ph/pages/statistics/stat_latest_wo.pdf

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Who are exempted from wage orders issued by the Boards?

Per the Rules on Exemption, the following categories of establishments may be


exempted upon application with and as determined by the Board:

• distressed establishments
• new business enterprises
• retail/service establishments employing not more than 10 workers
• establishments adversely affected by natural calamities

The Boards may also exempt establishments other than those enumerated above only if
they are in accord with the rationale for exemption stated in the Rules on Exemption
and upon strong justifiable reasons.

Who are entitled to ECOLA?

All private sector workers and employees in the National Capital Region receiving a
daily wage rate of Two Hundred Fifty Pesos (P250.00) to Two Hundred Ninety Pesos
(P290.00) shall receive an Emergency Cost of Living Allowance (ECOLA) of Fifty Pesos
(50.00).

Special holidays

Executive Order No. 203 lists down two (2) special days that shall be observed in this
country:

• Ninoy Aquino Day - August 21 (RA 9256)


• All Saints Day - November 1, and
• the last day of the year - December 31

During special days, the principle of "no work, no pay" applies and on such other special
days as may be proclaimed as such by the President or by Congress.

Workers who were not required or permitted to work on those days are not by law
entitled to any compensation. This, however, is without prejudice to any voluntary
practice or provision in the Collective Bargaining Agreement (CBA) providing for
payment of wages and other benefits for days declared as special days even if
unworked.

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On the other hand, work performed on special days merits additional compensation of
not less than 30% on top of the basic pay or a total of 130% and at least 50% over and
above the basic pay or a total of 150% if the worker is permitted or suffered to work on
said day which may be his scheduled rest day.

Muslim holidays

Presidential Decree 1083 in its Book V. Title I recognizes the five (5) Muslim holidays,
namely:

• Amun Jadid (New Year), which falls on the first day of the lunar month of
Muharram
• Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls on the twelfth
day of the third lunar month of Rabiul-Awwal
• Lailatul Isra Wal Mi Raj (Nocturnal Journey and Ascension of the Prophet
Muhammad), which falls on the twenty-seventh day of the seventh lunar month of
Rajab
• Id-ul-Adha ( Hari Raha Haji), which falls on the tenth day of the twelfth lunar
month of Dhu'l-Hijja

These official holidays shall be observed in the provinces of Basilan, Lanao del Norte,
Lanao del sur, Maguindanao, North Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi,
Zambaonga del Norte and Zamboanga del Sur and in the cities of Cotabato, Iligan,
Marawi, Pagadian and Zamboanga, and in such other Muslim provinces and cities as
may be created by law. Upon proclamation by the President of the Philippines, Muslim
holidays may also be officially observed in other provinces and cities.

The dates of Muslim holidays shall be determined by the Office of the President of the
Philippines in accordance with the Muslim Lunar Calendar (Hijra).

Presidential Proclamation No. 1198 (26 October 1973) provides as follows:

"All private corporations, offices, agencies and entities or establishments operating


within the provinces and cities enumerated herein shall observe the legal holidays as
proclaimed, provided, however, that all Muslim employees working outside of the
Muslim provinces and cities shall be excused from work during the observance of the
Muslim holidays as recognized by law without diminution or loss of wages during the
said period xxx."

Considering that all private corporations, offices, agencies, and entities or


establishments operating within the designated Muslim provinces and cities are required
to observe Muslim holidays, both Muslim and Christians working within the Muslim
areas may not report for work on the days designated by law as Muslim holidays.

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Muslim employees working outside of the Muslim provinces and cities shall be excused
from reporting for work during the observance of the Muslim holiday as recognized by
law without diminution of salary or wages during the period. Thus, they are entitled to
holiday pay equivalent to 100% of their basic pay if they are present or on leave of
absence with pay on
the working day immediately preceding the Muslim holiday while those who are
permitted or suffered to work on such holidays are entitled to at least 200% of their
basic pay.

Current statistics on wages

Current statistics on wages

• Nominal and Real Wage Rates by Region, Non-Agriculture


• Nominal and Real Wage Rates by Region, Agriculture
• Comparative Wages in Selected Asian Countries
• Summary of Daily Minimum Wage Rates for Non-Agriculture by Region
• Summary of Wage Legislations Granting Increases in the Basic Minimum Wage
(1951-1989)
• Summary of Wage Legislations Granting Cost of Living Allowance (COLA) (1974-
1987)
• Summary of Latest Wage Orders and Implementing Rules Issued by the
Regional Boards
• Estimates of Family Living Wage Per Day Based on NSCB Cost Menus and
Food Expenditure Ratios of Families in the 5th-7th Deciles Solely Dependent on
Wages and Salary for a Family of 6
• Labor Productivity, by Industry
• Labor Productivity, by Region
• Comparison of Productivity Levels Among Selected ASEAN Countries, at
Constant Prices

Effect of reduction of workdays on wages

In situations where the reduction in the number of regular working days is resorted to by
the employer to prevent serious losses such as when there is a substantial slump in the
demand for his goods or services or when there is lack of raw materials, the employer
may deduct the wages corresponding to the days taken off from the workweek,
consistent with the principle of "no work, no pay". This is, of course, without prejudice to
an agreement or policy which provides otherwise.

What is the computation of retirement pay?

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For the purpose of computing retirement pay, "one-half month salary" shall include all
the following:

1. 15 days salary based on the latest salary rate


2. cash equivalent of 5 days service incentive leave
3. one-twelfth (1/12) of the 13th month pay

Other benefits may be included in the computation of the retirement pay upon
agreement of the employer and the employee or if provided in the Collective Bargaining
Agreement (CBA). (Art. 287)

What is the compulsory age of retirement?

Employees shall be retired upon reaching the age of 65 years old. (Art. 287)

Who are entitled to separation pay?

Separation pay is given to employees in instances covered by Articles 283 and 284 of
the Labor Code. An employee's entitlement to separation pay depends on the reason or
ground for the termination of his services. An employee may be terminated for just
cause, i.e. gross and habitual neglect of duty, fraud or commission of a crime, and other
similar causes as enumerated under Art. 282 of the Labor Code and generally, may not
be entitled to separation pay. On the other hand, where the termination is for authorized
causes (as stated in Arts. 283 & 284), separation pay is due.

Regular holidays

Every employee covered by the Holiday Pay Rule is entitled to his daily basic wage for
any unworked regular holiday. This means that the employee is entitled to at least 100%
of his basic wage even if he did not report for work, provided he is present or is on leave
of absence with pay on the work day immediately preceding the holiday.

Work performed on that day merits at least twice (200%) the basic wage of the
employee.

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Where the holiday falls on the scheduled rest day of the employee, work performed on
said day merits at least an additional 30% of the employee's regular holiday rate of
200% or a total of at least 260%.

There are eleven (11) regular holidays in a year under Executive Order No. 203,
namely:

• New Year's Day - January 1


• Maundy Thursday - Movable Date
• Good Friday - Movable Date
• Araw ng Kagitingan - April 9
• Labor Day - May 1
• Independence Day - June 12
• National Heroes Day - Last Sunday of August
• Eidul Fitr - Movable Date
• Bonifacio Day - November 30
• Christmas Day - December 25
• Rizal Day - December 30

What are the regular holidays?

Executive Order No. 203 (June 30, 1987) lists the following regular holidays:

• New Year's Day - January 1


• Maundy Thursday - Movable date
• Good Friday - Movable date
• Araw ng Kagitingan - April 9
• Labor Day - May 1
• Independence Day - June 12
• National Heroes Day - Last Sunday of August
• Eidul Fitr - Movable Date
• Bonifacio Day - November 30
• Christmas Day - December 25
• Rizal Day - December 30

Is 13th month pay tax-exempt?

It depends. If the amount of 13th month pay is equivalent to Php30,000 and below, it is
not subject to tax. Otherwise, it is subject to tax. (Rev Regulations No. 8 & 10, s. 2000,
Bureau of Internal Revenue)

How is the Equivalent Monthly Rate (EMR) of monthly-paid and daily-paid

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employees computed?

Under the Labor Code, private sector workers should receive the applicable minimum
wages not lower than those prescribed by the Regional Boards under existing wage
orders. At present, the prescribed minimum wages are for normal working hours, which
shall not exceed eight hours per day.

For monthly-paid employees

The factor 365 days in a year is used in determining the equivalent annual salary of
monthly-paid employees. To compute their EMR, the procedure is as follows:

EMR = Applicable Daily Rate x 365 days / 12

Where 365 days:


302 days - Ordinary working days
51 days - Rest days
2 days - Special days
365 days - Total equivalent number of days

For daily-paid employees

The following formula may be used in computing the EMR of different groups of daily-
paid employees for purposes of entitlement to minimum wages and allied benefits under
existing laws:

a. For those who are required to work everyday including Sundays or rest days, special
days and regular holidays.

EMR = Applicable Daily Rate x 391.50 days / 12

Where 314 days:


302.00 days - Ordinary working days
20.60 days - Nine regular holidays x 200% plus 1 regular holiday/Sunday x 260%
66.30 days - S51 rest days x 130%
2.60 days - 2 special days
391.50 days - Total equivalent number of days

b. For those who do not work and are not considered paid on Sundays or rest days.

EMR = ADR x 314 days / 12

Where 314 days:


302 days - Ordinary working days

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10 days - Regular holidays
2 days - Special days (If considered paid; if actually worked, this is equivalent to 2.6
days)
314 days - Total equivalent number of days

c. For those who do not work and are not considered paid on Saturdays and Sundays or
rest days

EMR = ADR x 262 days / 12

Where 262 days:


250 days - Ordinary working days
10 days - Regular holidays
2 days - Special days (If considered paid; if actually worked, this is equivalent to 2.6
days) 262 days - Total equivalent number of days

*If considered paid (if actually worked, this is equivalent to 2.6 days)

Minimum wage of workers paid by results

All workers paid by results, including homeworkers and those who are paid on
piecework, takay, pakyaw, or task basis, shall receive not less than the applicable
statutory minimum wage rates prescribed under the Regional Wage Orders for normal
working hours, or a portion thereof.

The adjustments in the wage rates by reason of mandatory wage increase for workers
paid by results shall be computed in accordance with the following steps: (AMW -
Applicable Minimum Wage rate)

1. Amount of increase in AMW / Previous AMW x 100 = % increase


2. Existing rate/piece x % increase = Increase in rate/piece
3. Existing rate/piece + increase in rate/piece = Adjusted rate/piece

The wage rates of workers who are paid by results shall continue to be established in
accordance with Article 101 of the Labor Code, as amended and its implementing
regulations, i.e., through:

1. Time and motion studies;


2. An individual/collective bargaining agreement between the employer and its
workers as approved by the Secretary.
3. Consultation with representatives of employers and workers as organizations in
tripartite conference called by Secretary.

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Where the output rates established by the employer do not conform with the standards
set under the methods for establishing output rates, the employee shall be entitled to
the difference between the amount they are entitled to receive and the amount paid by
the employer.

Request for the conduct of time and motion studies to determine whether the non-time
employees in an enterprise are being paid fair and reasonable wages, may be filed with
the proper Regional Office.

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