Compensation

Overtime Compensation

Hours of worked include all time during which an employee is required to be on duty or to be at a prescribed workplace and all time during which an employee is permitted to work. Rest periods of short duration during working hours are regarded as hours worked.

The normal hours of work of any employee cannot exceed eight (8) hours a day. However health personnel in cities and municipalities with a population of at least one million, or in hospitals and clinics with a bed capacity of at least one hundred may be required to work additional hours where exigencies of the service require. Further, the daily hours’ limit in the Labour Code does not apply to government employees, managerial employees, field personnel, employer’s family members, domestic helpers, and personal service providers.

A child below 15 years cannot work for more than 4 hours a day, while adolescents (15 and 18 years) cannot work for more than 8 hours a day. The working hours for kasambhay (domestic helpers) are 10 hours a day, exclusive of one hour breaks for each regular meal of the day. However, kasambahay under the age of 18 years are not allowed to work more than 8 hours a day, 5 days a week, exclusive of 1 hour breaks for each regular meal of the day.

The Department of Labor and Employment has published advisory guidelines on the adoption of flexible work arrangements which includes compressed workweeks among a range of flexible arrangements which employers may consider implementing in times of economic difficulty or national emergency. These guidelines define a compressed workweek as being one where the normal workweek is reduced to less than 6 days but the weekly working hours (48 hours) remain unchanged. The maximum working hours on such days cannot exceed 12 hours per day.

The Labour Code provides that work may be performed beyond 8 hours a day provided that the employee is paid for the overtime work as prescribed. It further provides that any employee may be required by the employer to perform overtime work in any of the following cases: in the case of national emergency or force majeure; urgent work in order to avoid serious loss or damage to the employer; work necessary to prevent loss or damage to perishable goods; and were the completion or continuation of the work is necessary to prevent serious obstruction or prejudice to the business or operations of the employer.

The Law does not provide a limit on overtime work. Moreover, under time work on a day cannot be offset by overtime work on another day.

Overtime pay rates are covered under the Labour Code. COLA is not included in overtime calculation.

1. The overtime rate is 125% of the normal hourly wage rate if overtime work is performed on an ordinary working day (100 (assumed normal hourly wage)*125%);
2. The overtime rate is 169% of the normal hourly wage rate if the overtime work is performed on a special day or scheduled rest day (100 (assumed normal hourly wage)*130%*130%);
3. The overtime rate is 195% of the normal hourly wage rate if the overtime work is performed on a special day which falls on a scheduled rest day (100 (assumed normal hourly wage)*130%*150%);
4. The overtime rate is 260% of the normal hourly wage rate if the overtime work is performed on a regular holiday (100 (assumed normal hourly wage)*130%*200%);
5. The overtime rate is 338% of the normal hourly wage rate if overtime work is performed on a regular holiday which falls on a scheduled rest day (100 (assumed normal hourly wage)*130%*260%);

Source: §82, 83, 84, 87, 88 and 89 of the Labour Code, as amended; §12A of the Special Protection of Children against Child Abuse, Exploitation and Discrimination Act; Department Advisory No. 22009 Guidelines on the Adoption of Flexible Work Arrangements Part III, point 1

Night Work Compensation

Night work is regulated under the Labour Code which provides for a night shift differential. Women and young persons are prohibited from night work. As far as the rate of night work is concerned, night shift employees must be paid a differential of at least 10% of the regular wage for each hour of work performed between 10:00 p.m. and 6:00 a.m.

Source: §86 of the Labour Code, as amended

Compensatory Holidays / Rest Days

No statutory provisions in law could be identified that stipulate whether the employees are to be given compensatory rest days for working on public holidays or weekly rest days.

Weekend / Public Holiday Work Compensation

An employer may only require an employee to work on a rest day against his will:

1. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety;
2. In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer;           
3. In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures;
4. To prevent loss or damage to perishable goods;
5. Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer; and
6. When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.

In any other circumstance, the employee must volunteer to work on his scheduled rest days and provide written expression of his desire to work on scheduled rest days. Where an employee is made or permitted to work on his scheduled rest day or a special day, he is paid an additional compensation of at least 30% of his regular wage (130% of the normal wage rate). If a worker works on a regular holiday, he is paid an additional compensation of at least 100% of his regular wage (200% of the normal wage rate). If work is performed on a rest day which is also a special day, worker is paid 150% of the normal wage rate. If work is performed on a rest day which is also regular holiday, worker is paid 260% of the normal wage rate.

Source: §91-94 of the Labour Code, as amended