Compensation and Working Time

Overtime Compensation

Hours of work 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 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 Labor 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 to18 years) cannot work for more than 8 hours a day. The kasambahay (domestic helper) 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.

DOLE 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 six days but the weekly working hours (48 hours) remain unchanged. The maximum working hours on such days cannot exceed 12 hours per day.

The Labor Code provides that work may be performed beyond eight 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, undertime work on a day cannot be offset by overtime work on another day.

Overtime pay rates are covered under the Labor Code.

a) 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%); b) 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%); c) 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%); d) 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%); e) 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: §82-84 and 87-89 of the Labor Code, as amended; §12-A of the Special Protection of Children against Child Abuse, Exploitation and Discrimination Act; Implementing Rules and Regulations of Republic Act No. 10361; No. 1 of Part III of the Guidelines on the Adoption of Flexible Work Arrangements

Night Work Compensation

Night work is work performed during a period of not less than seven consecutive hours, including the interval from 12:00 a.m. to 5:00 a.m., as determined by the Secretary of Labor and Employment, after consultation with workers’ representatives or labor organizations and employers.

Night worker refers to any employed person whose work requires performance of a substantial number of hours of night work which exceeds a specified limit. This limit shall be fixed by the Secretary of Labor after consulting the workers' representatives or labor organizations and employers.

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 and 154 of the Labor Code, as amended; §12-A of the Special Protection of Children Against Child Abuse, Exploitation and Discrimination Act

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 or her will: a. 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; b. In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer; c. In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures; d. To prevent loss or damage to perishable goods; e. 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 f. Under other circumstances analogous or similar to the above as determined by the Secretary of Labor and Employment.

In any other circumstance, the employee must volunteer to work on his or her scheduled rest days and provide written expression of his or her desire to work on scheduled rest days.

There is no law requiring employers to provide compensatory rest for working on a weekly rest day or public holiday. However, where an employee is made or permitted to work on his or her scheduled rest day or a special day, the worker is paid an additional compensation of at least 30% of his or her regular wage (130% of the normal wage rate). If a worker works on a regular holiday, the worker is paid an additional compensation of at least 100% of his or her regular wage (200% of the normal wage rate). If work is performed on a rest day which is also a special day, the worker is paid 150% of the normal wage rate. If work is performed on a rest day which is also regular holiday, the worker is paid 260% of the normal wage rate.

There is no law that allows workers to choose between compensatory rest, premium pay, or both for work performed on a public holiday.

Source: §91-93 of the Labor Code, as amended; §6 of the Omnibus Rules Implementing the Labor Code, Book III