IV. LABOR STANDARDS Flashcards
IV. LABOR STANDARDS
A. Conditions of Employment
1. Covered Employees; Exceptions – Labor Code, art. 82; Omnibus Rules
Implementing the Labor Code, Book III, Rule I, secs. 1-2
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Key Points on Covered Employees and Exemptions (Article 82)
This article (Article 82 of the Philippine Labor Code) defines the scope of the labor code’s protections. Here’s a breakdown of who is covered and who is exempt:
Covered Employees:
a) The article states that the labor code applies to “employees in all establishments and undertakings, whether for profit or not”. This means most employees in the Philippines are covered, regardless of the type of work, employer, or industry.
b) Examples of covered employees include office workers, factory workers, domestic helpers (with limitations), security guards, construction workers, drivers, servers, and salespeople.
Exempt Employees:
- The article outlines several categories of employees who might be exempt from some labor provisions (like minimum wage and overtime pay). However, it’s important to remember:
The exemptions are narrowly interpreted. The employer has the burden of proving the exemption applies.
Courts often consider the specific nature of the work performed when determining exemptions.
Here’s a breakdown of the listed exemptions in Article 82:
1) Government Employees: Employees directly employed by the government are not covered by the Labor Code. They have separate civil service rules and regulations.
2) Managerial Employees: These are employees whose primary duty is managing the establishment, department, or staff. They might be exempt from minimum wage and overtime, but should receive a reasonable salary. (Example: Company CEO)
3) Field Personnel: These are non-agricultural employees who regularly work away from the main office and whose work hours are difficult to track. Their exemption from certain provisions depends on the specific nature of their field duties and the Department of Labor regulations. (Example: Delivery personnel who spend most of their day on the road)
Other Potential Exemptions (Not Listed in Article 82):
4) Members of the family of the employer who are dependent on him for support: This exemption applies to close family members who live with the employer and rely on them financially. However, the line can be blurred. If such family members perform substantial work crucial to the business, they might be entitled to some labor protections.
5) Domestic helpers (kasambahay): While the article mentions domestic helpers, they do have some rights under Philippine law. Minimum wage laws and specific regulations regarding working hours and rest days apply to domestic helpers.
6) Persons in the personal service of another: This exemption is vague and rarely used. It might apply to personal assistants or caregivers in private households, but the details depend on the specific situation.
7) Workers who are paid by results (piece-rated workers): The Department of Labor can issue regulations determining when piece-rated workers might be exempt from minimum wage. However, their total earnings must still meet a minimum threshold to ensure fair compensation.
Key Points from Jurisprudence:
* Court decisions play a significant role in interpreting exemptions. Courts often focus on the actual work performed, the level of control by the employer, and the employee’s primary function.
* Exemptions are not automatic. Employers should carefully consider the specific duties of their employees
IV. LABOR STANDARDS
A. Conditions of Employment
- Hours of work
a. Normal hours of work
– Labor Code, arts. 83-84; Omnibus Rules
Implementing the Labor Code, Book III, Rule I, secs. 3-4
Key Points on Normal Hours of Work (Articles 83 & 84 and Implementing Rules)
These articles and implementing rules define the standard work hours and what activities count as compensable work time in the Philippines.
Normal Hours:
* The general rule is eight (8) hours of work per day. (Article 83)
* There’s a specific exception for some health personnel in large cities or hospitals who can work a 40-hour week (8 hours/day, 5 days/week) with overtime pay for the sixth day. (Article 83)
What Counts as Hours Worked:
- These rules go beyond simply the time spent actively working and include:
1) All time an employee is required to be on duty or at the workplace, even if not actively working. (Article 84 & Rule 3a)
2) Any time the employer permits or suffers the employee to work. (Article 84 & Rule 3b)
3) Short rest periods during working hours. (Article 84)
Principles for Determining Hours Worked (Department of Labor Ruling):
These additional guidelines clarify what activities count as work time:
* All time the employer requires the employee to be available, regardless of productivity or exertion. (Rule 4a)
* Rest periods count as work time if the employee can’t truly relax and leave the work area. (Rule 4b)
* Work deemed necessary by the employer, beneficial to the company, or unavoidable due to lack of replacement, is compensable even if outside regular hours (with employer knowledge). (Rule 4c)
* Waiting time due to interruptions beyond the employee’s control counts as work time if they must remain present or the break is too short for personal use. (Rule 4d)
Examples:
- An employee is required to be at their desk for 8 hours a day, even if tasks only take 6 hours. All 8 hours are compensable.
- A security guard is required to stay at their post overnight, with occasional breaks. All the time on duty is compensable.
- A call center employee is permitted to take short breaks at their desk between calls. These breaks count as work time.
- An employee finishes assigned tasks early but is told to wait for potential new tasks. This waiting time is compensable.
- An employee stays late to finish an urgent project without being explicitly instructed to do so. This might not be compensable unless the employer knew and approved.
IV. LABOR STANDARDS
A. Conditions of Employment
- Rest periods – Labor Code, arts. 91-93; Omnibus Rules Implementing
the Labor Code, Book III, Rule III, secs. 1-9
Key Points on Rest Periods in the Philippines (DOLE Rules & Articles 91-93)
These regulations and articles establish clear guidelines for rest periods in the Philippines, including weekly rest days, Sundays, and holidays.
Weekly Rest Day:
* Employers must provide all employees with a 24-hour rest period after every 6 consecutive normal work days. (DOLE Rule 3 & Article 91)
* Employers can determine the rest day schedule, but they must consider:
a) Collective bargaining agreements (if applicable). (Article 91)
b) Department of Labor regulations (DOLE Rules).
c) Employee preferences based on religion (respecting written requests submitted at least a week before the desired change). (DOLE Rule 4)
Working on Rest Days:
- Employers can require employees to work on rest days in some circumstances, but they must provide additional compensation:
1) Emergencies: Serious accidents, fires, natural disasters, etc. (DOLE Rule 6(a) & Article 92(a))
2) Urgent equipment repairs: To prevent significant losses. (DOLE Rule 6(b) & Article 92(b))
3) Unusual workload: When other measures are unavailable. (DOLE Rule 6(c) & Article 92(c))
4) Perishable goods: To prevent spoilage. (DOLE Rule 6(d) & Article 92(d))
5) Continuous operations: Where stopping work would cause significant harm. (DOLE Rule 6(e) & Article 92(e))
6) Similar circumstances: As determined by the Department of Labor. (DOLE Rule 6(f) & Article 92(f))
Compensation for Working on Rest Days, Sundays, or Holidays:
* Working on a scheduled rest day earns 30% extra pay on top of regular wages. (DOLE Rule 7(a) & Article 93)
* Working on a Sunday (but not your rest day) earns 30% extra pay only if you don’t have a set rest day schedule. (DOLE Rule 7(b) & Article 93)
* Working on a regular holiday earns 30% extra pay. (DOLE Rule 7(c) & Article 93)
* If a holiday falls on your scheduled rest day, you get 50% extra pay. (DOLE Rule 7(c) & Article 93)
* If a collective bargaining agreement offers higher premiums, that rate applies. (DOLE Rule 7(e) & Article 93)
Additional Points:
- Employers cannot reduce pay for unworked Sundays, holidays, or rest days designated as paid days off by agreement or practice. (DOLE Rule 8)
- Employers and employees can agree to terms more favorable to the employee than these regulations provide. (DOLE Rule 9)
Examples:
- An employee works their regular Monday-Saturday schedule. Sunday is their scheduled rest day. If they are required to work on Sunday, they earn their regular wage + 30% extra pay.
- An employee works a shift schedule with no fixed days off. They work on a national holiday. They earn their regular wage + 30% extra pay for the holiday.
- An employee with a fixed rest day on Wednesday is required to work on that day. They earn their regular wage + 50% extra pay because it’s both their rest day and a holiday.
IV. LABOR STANDARDS
A. Conditions of Employment
- Holidays – Labor Code, art. 94; Omnibus Rules Implementing the Labor
Code, Book III, Rule IV, secs. 1-11
Key Points on Holiday Pay in the Philippines (DOLE Rules & Article 94)
These regulations and the article establish who qualifies for holiday pay and how much they should be paid under different circumstances.
Who Gets Holiday Pay?
a) Most employees are entitled to holiday pay, with some exceptions: (DOLE Rule 1 & Article 94)
1) Government employees
2) Retail and service establishments with less than 10 workers
3) Domestic helpers and personal service staff
4) Managerial employees
5) Field personnel with unsupervised work (contract, commission, fixed-rate)
b) Employees paid a monthly salary that meets or exceeds the minimum wage get paid for all days in the month, regardless of holidays worked. (DOLE Rule 2)
Regular vs. Special Days:
1) The term “holiday” now refers to “regular holidays.” (DOLE Rule 3)
2) Special days are a separate category but are not covered by these rules on holiday pay. (DOLE Rule 3)
Regular Holidays:
a) New Year’s Day
b) Maundy Thursday
c) Good Friday
d) April 9
e) May 1
f) June 12
g) Last Sunday of August
h) November 1 (All Saints’ Day)
i) November 30 (National Heroes Day)
j) December 25 (Christmas Day)
k) December 30 (Rizal Day)
Holiday Pay Rates:
a) If not required to work: You get your regular daily wage for every regular holiday, regardless of whether you work it or not. (DOLE Rule 3 & Article 94)
b) If required to work on a regular holiday (up to 8 hours): You get double your regular daily wage (200%). (DOLE Rule 4 & Article 94)
- If the holiday also falls on your scheduled rest day, you get an additional 30% premium pay on top of the double rate (200% x 1.3 = 260%). (DOLE Rule 4)
c) Overtime work on a regular holiday (over 8 hours):
- Get paid your regular rate for the first 8 hours, plus 30% extra (same as above). (DOLE Rule 5)
- If the overtime falls on your rest day, get your regular holiday-rest day rate (200% + 30%) for the first 8 hours, plus an additional 30% on that amount. (DOLE Rule 5)
Other Conditions:
- You must be working or on approved leave with pay on the day before a holiday to qualify for holiday pay. (DOLE Rule 6(a))
- If a holiday falls on a Sunday, the following day becomes a special day, not a holiday, for pay purposes (unless it’s also a regular holiday). (DOLE Rule 9(b))
- Existing agreements or practices that provide more generous holiday pay benefits take precedence over these rules. (DOLE Rule 11)
Examples:
a) An employee works a Monday-Friday schedule. They are not required to work on Good Friday (a regular holiday). They still get their regular wage for that day.
b) An employee works a regular schedule and is required to work on Christmas Day (a regular holiday). They work for 8 hours. They get paid double their regular daily rate for those 8 hours.
c) An employee with a Wednesday rest day is required to work on that day, which also happens to be New Year’s Day. They get paid an extra 30% on top of the double holiday rate because it’s both their rest day and a holiday.
IV. LABOR STANDARDS
A. Conditions of Employment
- Service charges – Labor Code, art. 96; Omnibus Rules Implementing the
Labor Code, Book III, Rule VI, secs. 1-7; R.A. No. 11360; DOLE D.O. No.
206-19; DOLE L.A. No. 14-19
Key Points on Service Charges in the Philippines (DOLE Rules & Article 96)
These regulations and the article establish how service charges collected by certain businesses must be distributed to employees.
1) Who Gets Service Charges?
A) All employees (except managers) at covered establishments that collect service charges qualify for a share. (DOLE Rule 2 & Article 96)
B) Covered establishments include hotels, restaurants, lodging houses, nightclubs, bars, casinos, and similar businesses. (DOLE Section 1)
2) Who Are Managerial Employees (Excluded)?
- Managers have the power to:
A) Make or enforce management policies.
B) Hire, transfer, suspend, discipline, or fire employees. (DOLE Rule 2 & Article 96)
Distribution of Service Charges:
1) 85% goes to employees, divided equally among all covered employees (rank-and-file). (DOLE Rule 3)
2) 15% goes to management:
- To cover losses or breakage costs. (DOLE Rule 3)
- Can be distributed to managers at the business’s discretion. (DOLE Rule 3)
Frequency of Distribution:
* Service charge shares must be paid to employees at least twice a month, with intervals no longer than 16 days. (DOLE Rule 4)
Integration of Service Charges:
* If a business stops collecting service charges, the employees’ previous average share over the past year becomes part of their regular wages. (DOLE Rule 5)
Agreements and Benefits:
* Employers and employees can agree on a more favorable distribution method for service charges. (DOLE Rule 6)
* Existing benefits or agreements providing more than these rules cannot be reduced. (DOLE Rules 6 & 7)
* Existing collective bargaining agreements are not affected by these rules. (DOLE Rule 7)
Examples:
1- A restaurant collects service charges. Waiters, cashiers, cooks, and bussers would all share 85% of the service charges collected, divided equally among them.
2- A hotel has a 15% service charge. 85% goes to employees, and the hotel keeps 15% to cover broken dishes or distribute to managers as a bonus.
3- If the hotel stops collecting service charges, they would need to increase base wages for employees by the average amount they received from service charges over the past year.
IV. LABOR STANDARDS
A. Conditions of Employment
- Occupational Safety and Health Standards Law – R.A. No. 11058, secs.
4-6, 8 and 12
Key Points on Occupational Safety and Health Standards (DOLE Rules & Section 4)
These regulations establish the duties of employers, workers, and others to ensure a safe and healthy work environment.
Employer Responsibilities:
1) Provide a workplace free from hazards that could cause harm. (Section 4(a)(1))
2) Train workers on safety procedures and familiarize them with their work environment, especially new hires. (Section 4(a)(2))
3) Inform workers about potential hazards, health risks, preventive measures, and emergency procedures. (Section 4(a)(3))
4) Use approved devices and equipment. (Section 4(a)(4))
5) Comply with safety and health standards, including training, medical examinations, and providing personal protective equipment (PPE) when necessary. (Section 4(a)(5))
6) Allow worker participation in developing and implementing safety programs. (Section 4(a)(6))
7) Provide first-aid and emergency response measures. (Section 4(a)(7))
Worker Responsibilities:
1) Participate in ensuring a safe workplace. (Section 4(b))
Use safety equipment properly and follow safety instructions. (Section 4(b))
2) Report any work hazards to their supervisor. (Section 4(b))
3) Follow emergency procedures. (Section 4(b))
Other Duties:
A) Anyone visiting, building, renovating, or installing devices in a workplace must comply with safety regulations. (Section 4(c))
B) When multiple businesses operate in one location, all must collaborate on applying safety standards. (Section 4(d))
Worker Rights:
1) Workers have the right to know about workplace hazards and receive training on chemical, electrical, mechanical, and ergonomic safety. (Section 5)
2) Workers have the right to refuse unsafe work if there’s imminent danger and the employer hasn’t taken corrective action, without fear of reprisal. (Section 6)
3) Workers have the right to report accidents, dangerous situations, and hazards to employers, the Department of Labor (DOLE), and other relevant agencies. (Section 7)
4) Workers have the right to free personal protective equipment (PPE) appropriate for the hazards they face, paid for by the employer. (Section 8)
Examples:
A) A construction company must train workers on proper use of scaffolding, cranes, and fall protection equipment.
B) A factory must inform workers about the dangers of handling hazardous chemicals and provide them with proper PPE like gloves, goggles, and respirators.
C) An office worker can refuse to work in a building with faulty electrical wiring until repairs are made.
D) A restaurant worker who discovers a broken floor tile must report it to their manager to prevent slip-and-fall accidents.
IV. LABOR STANDARDS
A. Conditions of Employment
- Hours of work
b. Meal periods – Labor Code, art. 85; Omnibus Rules
Implementing the Labor Code, Book III, Rule I, sec. 7
Key Points on Meal Periods in the Philippines (Labor Code & DOLE Rules)
These regulations establish the minimum amount of time employees must be given for meal breaks and when shorter breaks are allowed.
General Rule:
Employers must give their employees AT LEAST 60 minutes for a meal break. (Article 85 & Section 7)
Exceptions for Shorter Meal Breaks (20 minutes):
1) The work is NON-MANUAL or doesn’t involve strenuous physical activity. (Section 7(a))
2) The business operates for AT LEAST 16 hours a day. (Section 7(b))
3) There’s an ACTUAL OR IMPENDING Emergency, urgent machinery repairs, or action needed to prevent serious losses. (Section 7(c))
4) The work is necessary to PREVENT SPOILAGE of PERISHABLE goods. (Section 7(d))
Important Notes:
1) Shorter meal breaks (20 minutes) must be COUNTED AS WORK HOURS and paid accordingly. (Section 7)
2) Rest periods or coffee breaks (5-20 minutes) are also considered COMPENSABLE work time. (Section 7)
Examples:
A call center employee (non-manual work) can be given a 20-minute meal break if the rules allow it in their specific situation. However, the break time wouldn’t be deducted from their wages.
A factory worker with a physically demanding job must receive a full 60-minute meal break.
A restaurant employee might be eligible for a shorter break during a particularly busy lunch rush (emergency situation) if the rules allow it, but the break time would still be paid.
Grocery store employees stocking fresh produce wouldn’t be eligible for a shorter break because their work involves preventing spoilage of perishable goods.
IV. LABOR STANDARDS
A. Conditions of Employment
- Hours of work
c. Night-shift – Labor Code, art. 86; Omnibus Rules Implementing
the Labor Code, Book III, Rule II, secs. 1-6
Key Points on Night Shift Differential in the Philippines (Labor Code & DOLE Rules)
These regulations establish the right to night shift differential pay and additional compensation for work done during specific times.
Night Shift Differential:
* Employees (except those excluded) receive a 10% PREMIUM on their regular wage for each hour worked between ‘“10:00 PM and 6:00 AM.” (Article 86 & Section 2)
Who is Excluded?
1) Government employees (including government-owned corporations). (Section 1(a))
2) Small retail/service establishments with less than 5 employees. (Section 1(b))
3) Domestic helpers and personal service workers. (Section 1(c))
4) Managerial employees. (Section 1(d))
5) Unsupervised field personnel, contract workers, commission-based workers, or those paid a fixed amount regardless of time spent working. (Section 1(e))
Additional Compensation:
1) Working beyond scheduled night shift hours: Regular wage + 25% overtime pay + 10% of the overtime rate for each hour between 10 PM and 6 AM. (Section 3)
2) Working on a rest day or special holiday during the night shift hours: Regular wage + 30% premium pay + 10% of the premium rate for each hour between 10 PM and 6 AM. (Section 4)
3) Working on a regular holiday during the night shift hours: Regular wage for the holiday + 10% of the holiday pay for each hour between 10 PM and 6 AM. (Section 5)
Important Notes:
* These rules cannot be used by employers to reduce existing benefits or agreements providing more favourable terms for night shift work. (Section 6)
Examples:
1) A factory worker (not excluded) earns a regular wage of ₱500 per day. They work a night shift from 10 PM to 6 AM. They would earn:
Night shift differential: (₱500/hour) x 10% = ₱50 per hour
Total night shift pay: (₱500/hour) + ₱50 = ₱550 per hour
2) A security guard (not excluded) works a scheduled shift from 8 PM to 4 AM and is then asked to stay for an additional hour to cover for a colleague. They would earn:
- Regular wage for the scheduled shift (8 PM to 10 PM)
- Night shift differential for scheduled shift (10 PM to 4 AM)
- Overtime pay (including 10% premium on overtime rate) for the extra hour (4 AM to 5 AM)
IV. LABOR STANDARDS
A. Conditions of Employment
- Hours of work
d. Overtime work – Labor Code, arts. 87-90; Omnibus Rules
Implementing the Labor Code, Book III, Rule I, secs. 8-10
Key Points on Overtime Work and Compensation in the Philippines (Labor Code & DOLE Rules)
These regulations establish the rules for overtime work, how much overtime pay employees are entitled to, and when employers can require overtime.
Overtime Pay Rates:
1) Overtime for REGULAR WORK DAYS (not holidays or rest days): Regular wage + 25% premium. (Article 87 & Section 8)
2) Overtime for HOLIDAYS OR REST DAYS (not regular holidays): First 8 hours at holiday/rest day rate + “ 30% premium” on those 8 hours + 30% premium on overtime pay. (Article 87 & Section 9(a))
3) Overtime for REGULAR HOLIDAYS: Follow separate rules under DOLE Rule IV (not covered here). (Section 9(c))
Employer’s Right to Require Overtime:
- Employers can require overtime in specific situations:
1) National or local emergencies. (Article 89(a) & Section 10(a))
2) Preventing loss of life, property, or public safety due to emergencies. (Article 89(b) & Section 10(b))
3) Urgent repairs to machinery or equipment to prevent serious loss. (Article 89(c) & Section 10(c))
4) Preventing spoilage of perishable goods. (Article 89(d) & Section 10(d))
5) Finishing work started before 8 hours to avoid disrupting business operations. (Article 89(e) & Section 10(e))
6) Taking advantage of favorable weather conditions for specific tasks. (Section 10(f))
Employee’s Right to Refuse Overtime (Outside Emergencies):
* Employees cannot be forced to work overtime outside the situations listed above. (Section 10)
Other Important Points:
- Undertime work cannot be used to offset overtime work on a different day. (Article 88)
- “Regular wage” for overtime calculations excludes deductions for employee benefits provided by the employer. (Article 90)
Examples:
- A call center employee (not excluded) works a regular 8-hour shift and is then asked to stay for 2 hours of overtime. Their regular wage is ₱500 per day. They would earn:
* Regular pay: ₱500 for the regular shift
* Overtime pay: (₱500/hour x 2 hours) x 125% = ₱250 (includes the 25% premium)
* Total pay: ₱500 + ₱250 = ₱750
- A security guard (not excluded) works a scheduled shift on Sunday (their rest day) for 8 hours. Their regular wage is ₱400 per day. They would earn:
* Rest day premium: ₱400 x 30% = ₱120
* Total pay: ₱400 + ₱120 = ₱520
- If the security guard from the previous example also worked an additional 2 hours of overtime on their rest day, they would earn an additional overtime premium on top of the rest day premium.
IV. LABOR STANDARDS
A. Conditions of Employment
- Hours of work
e. Compressed work week, flexible work arrangement, alternative
work arrangements, telecommuting program
– DOLE D.A. No. 02-04;
DOLE D.A. No. 02-09; DOLE D.A. No. 04-10; R.A. No.
11165, secs. 3-5
Key Points on Alternative Work Arrangements in the Philippines (DOLE):
1) Compressed Work Week (CWW):
- Allows a workweek to be less than 6 days, but total work hours remain 48 per week (40 for a 5-day workweek).
- Normal workday hours are extended beyond 8 hours without overtime pay, as long as the total daily hours don’t exceed 12.
- Requires a majority employee agreement and safety certification for workplaces with potential health hazards.
- Not applicable to construction, healthcare, heavy manual labor, or workplaces exceeding safety limits.
Example: A company with a normal 5-day, 40-hour workweek implements a CWW. Employees agree to work 10 hours per day for 4 days (40 hours total). There’s no overtime pay for the extended daily hours, but employees still get their regular rest day and meal breaks.
2) Flexible Work Arrangement (FWA):
- Not specifically defined but refers to various alternative work schedules beyond CWW.
- Could include flexible start/finish times, job sharing, part-time work, or telecommuting.
3) Alternative Work Arrangements (AWA):
- A broad term encompassing CWW, FWA, telecommuting programs, and potentially other non-standard work schedules.
4) Telecommuting Program:
- Allows employees to work remotely using technology from an alternative workplace (home office etc.).
- Must be voluntary and include terms agreed upon by both employer and employee.
- Telecommuting employees must receive the same benefits and treatment (pay, rest days, training) as comparable on-site employees.
- Employers must provide clear written information about the program’s terms and employee responsibilities.
Example: A call center company offers a telecommuting program where some employees can work from home. Telecommuters receive the same pay and benefits as in-office employees, but the company provides clear guidelines on work hours, communication, and equipment use.
IV. LABOR STANDARDS
A. Conditions of Employment
- Hours of work
f. Non-compensable hours
- Non-compensable work hours refer to periods of time for which employees are NOT ENTITLED to receive compensation or additional benefits Beyond their regular wages.
These hours typically include breaks, meal periods, and certain types of waiting or standby time that are not considered integral to the performance of work duties.
Illustrative Examples:
A) Meal Periods: Employees are often granted a designated meal break, typically lasting around one hour, during which they are free to eat and relax. This time is considered non-compensable as employees are not actively engaged in work-related tasks.
B) Rest Periods: Short breaks or rest periods provided during the workday, such as coffee breaks or restroom breaks, are typically considered non-compensable as they are brief and intended to allow employees to rest and recharge.
C) Waiting or Standby Time: In some cases, employees may be required to wait for work assignments or be on standby for potential tasks. If the waiting or standby time does not involve active work duties and employees are free to engage in personal activities, such as reading or using personal electronic devices, this time may be non-compensable.
D) Travel Time: Time spent commuting to and from work is generally not compensable under Philippine labor laws unless the travel is considered part of the work duties, such as when employees are required to travel to different work sites during their shifts.
It’s important for employers to accurately distinguish between compensable and non-compensable work hours to ENSURE COMPLIANCE with labor laws and to provide fair compensation to employees for their time and efforts.
IV. LABOR STANDARDS
B. Wages
a. Wages – Labor Code, art. 97(f)
Key Points on What Constitutes “Wage” under Philippine Labor Law
This definition clarifies what is considered “wage” for an employee under Philippine law. Here are the key points:
- Broad Definition: “Wage” encompasses various forms of employee compensation, regardless of how it’s labelled.
- Measurable in Money: The compensation must be expressed in monetary terms, even if it’s based on time, tasks completed, commission, or other methods.
- Payment by Employer: It’s the employer’s obligation to pay the employee under a written or unwritten employment contract.
- For Work Performed: The wage is earned in exchange for work already done or to be done in the future.
- Includes Benefits: The definition includes the fair market value of benefits like board, lodging, or other facilities the employer provides.
- Fair Market Value for Benefits: The value of benefits is determined by the Department of Labor and excludes any profit for the employer.
Examples:
- Salary: A fixed monthly wage paid to an employee is considered their wage.
- Hourly Pay: The amount an employee earns per hour worked is included in their wage.
- Commissions: The percentage of sales an employee earns is part of their wage.
- Piece Rates: Pay based on the number of units produced also falls under wages.
- Company-provided Housing: The fair market rent of a company-provided house would be added to the employee’s cash wage.
- Meals: The estimated cost of meals provided by the company would be included in the wage.
What Isn’t Included in Wages:
- Non-monetary benefits like free gym memberships wouldn’t be part of the wage calculation.
- Employer profits from providing benefits wouldn’t be counted towards wages.
IV. LABOR STANDARDS
B. Wages
b. Facilities
In Philippine labor law and jurisprudence, facilities refer to articles or services provided by the employer for the benefit of the employee or their family, but do not include tools of the trade (Article 106, Implementing Rules of Book III of the Labor Code).
Here’s a breakdown of the key points:
1) Benefits, Not Tools:
Facilities are meant to improve employee well-being and working conditions, not directly related to their job duties. Tools or equipment used for work wouldn’t be considered facilities.
2) Employer-Provided:
The employer takes the initiative and shoulders the cost of providing these facilities.
3) Employee or Family Benefit:
The facilities should be usable by the employee or extend some benefit to their family members.
Examples of Facilities (with Current Events):**
* **Meals:
A company might provide subsidized meals in a cafeteria for its employees. (Example: A tech start-up offers free breakfast and lunch for its employees to promote a healthy work-life balance.)
* **Housing:
In remote areas, companies might provide housing facilities for their workers. (Example: A mining company offers on-site dormitory rooms for its employees stationed far from their families.)
* **Transportation:
Some companies offer shuttle services to pick up and drop off employees. (Example: A BPO company provides transportation for its night-shift employees to ensure their safety.)
* **Fuel/Utilities:
In some cases, employers might provide fuel allowances or cover utility bills for employee housing.
* **Medical/Dental Care:
Some companies offer health insurance or on-site clinics for their employees. (Example: A large manufacturing company provides subsidized health insurance coverage for its employees and their dependents.)
- Important Note:
- Employees are not obligated to avail themselves of the facilities.
- If they choose not to use them, the employer cannot deduct the value of the facilities from their wages (Section 2, Rule VII, Implementing Rules of Book III of the Labor Code).
- Understanding facilities in Philippine labor law helps ensure a fair and balanced relationship between employers and employees. By providing these benefits, employers can create a more attractive workplace and improve employee morale.**
IV. LABOR STANDARDS
B. Wages
c. Supplements
In Philippine labor law and jurisprudence, supplements refer to extra monetary benefits or special privileges given to employees on top of their regular wages. These are considered additional forms of compensation that go beyond the mandated minimum wage (Article 106, Implementing Rules of Book III of the Labor Code).
Here’s a breakdown of the key points:
- Extra Compensation: Supplements are not part of the basic salary but additional rewards or benefits.
- Monetary or Non-Monetary: Supplements can be in the form of cash bonuses, allowances, or non-cash benefits like vacation packages.
- Employer Discretion: While not mandatory, employers can offer supplements to attract and retain talent, motivate employees, or reward performance.
- Examples of Supplements (with Current Events):
- **Bonuses:
Companies may give annual performance bonuses, Christmas bonuses, or project-based bonuses. (Example: A retail company offers a performance-based bonus based on exceeding sales targets.) - **Allowances:
Allowances might include transportation allowances, clothing allowances, or communication allowances. (Example: A delivery company provides a motorcycle allowance to its riders to cover fuel and maintenance costs.) - **Profit-Sharing:
Some companies share a portion of their profits with employees. - **Stock Options:
Companies might offer stock options to employees, allowing them to potentially benefit from the company’s growth. (Example: A tech startup offers stock options to its employees to incentivize long-term commitment.) - **Gifts:
Employers might give non-cash gifts like gift certificates or merchandise during holidays or special occasions. (Example: A company provides its employees with gift certificates during the holiday season.) - Important Note:
- Supplements are taxable as part of the employee’s gross income.
- Employers have the discretion to set the criteria and amount of supplements offered.
- Understanding supplements in Philippine labour law helps employees recognize the full value of their compensation package. These benefits can significantly impact an employee’s overall satisfaction and motivation.**
IV. LABOR STANDARDS
B. Wages
d. Bonus
IV. LABOR STANDARDS
B. Wages
e. 13th Month Pay
– P.D. No. 851; Revised Guidelines on the Implementation of the 13th Month Pay Law
Key Points on 13th Month Pay in the Philippines (based on P.D. No. 851 and DOLE Advisory No. 28):
Who Gets It?
1) Rank-and-file employees regardless of position, designation, employment status, or pay method.
2) Domestic workers (“Kasambahay”) as defined by R.A. No. 10361.
3) Must have worked for at least one month within the calendar year.
Who Doesn’t Get It?
- Government employees (except government-owned corporations acting like private businesses).
- Employees already receiving a total yearly bonus or benefit equivalent to 13th month pay or more (e.g., Christmas bonus, profit-sharing).
- Employees paid purely on commission, boundary, or task basis (unless piece-rate).
- Those performing domestic work occasionally, not as an occupation.
How Much Is It?
Minimum of one-twelfth (1/12) of the total basic salary earned by the employee within the calendar year.
Calculation Example:
Total Basic Salary Earned in 2024 / 12 Months = 13th Month Pay
Important Notes:
- Employers cannot request exemption or deferment of 13th month pay, even with financial losses.
- The 13th month pay should be paid on or before December 24th of each year.
- This is the minimum requirement. More favorable terms may exist in employment contracts or collective bargaining agreements.
Distressed Employers:
- The Department of Labor (DOLE) can grant exemption upon application if a company meets the definition of “distressed employer.”
- This includes companies incurring substantial losses or non-profits with a consistent income decline of over 40% for the past two years.
Key Takeaways:
- The 13th month pay is a mandatory year-end benefit for most Filipino workers.
- The amount is based on a portion of the employee’s annual basic salary.
- Employers generally cannot avoid paying it due to financial difficulties.
IV. LABOR STANDARDS
B. Wages
f. Holiday Pay – Labor Code, art. 94; Omnibus Rules Implementing
the Labor Code, Book III, Rule IV, secs. 1-7
Key Points on Holiday Pay (Article 94 of the Philippine Labor Code):
Right to Holiday Pay:
Employees are entitled to receive their regular daily wage for regular holidays unless they work in:
A) Retail establishments
B) Service establishments
C) Businesses with less than 10 employees (for both retail and service)
Working on Holidays:
* Employers can require employees to work on holidays. However, they must compensate them with:
- DOUBLE THEIR REGULAR RATE for the work performed on the holiday.
Holidays Covered:
The article defines “holiday” to include the following days:
1) New Year’s Day
2) Maundy Thursday
3) Good Friday
4) April 9 (Araw ng Kagitingan)
5) May 1 (Labor Day)
6) June 12 (Independence Day)
7) July 4 (Philippine-American Friendship Day)
8) November 30 (Bonifacio Day)
9) December 25 (Christmas Day)
10) December 30 (Rizal Day)
11) National Election Day
Examples:
- Sarah, an office worker, gets a regular daily wage of Php 500. Since her company is not a retail or service establishment with less than 10 employees, she is entitled to receive her full Php 500 wage even if the office is closed on New Year’s Day.
- Mark, who works in a grocery store (retail establishment), does not receive his regular wage for Christmas Day because the store is closed. However, if he is required to work on Christmas Day, he should be paid double his regular rate (Php 500 x 2 = Php 1000) for the hours worked.
- Lea, a call center agent, is required to work on Good Friday. She is entitled to double her regular pay for the hours she works that day.
IV. LABOR STANDARDS
B. Wages
- Principles
a. No Work, No Pay
No Work, No Pay: Understanding a Fundamental Principle in Philippine Labor Law
The “No Work, No Pay” principle is a cornerstone of Philippine labor law, enshrined in Article 103 of the Labor Code. It establishes a clear link between an employee’s work performance and their right to receive wages.
Key Points:
1) Earning Wages:** Employees earn their wages by rendering services to their employer.
2) No Work, No Pay:** If an employee does not perform work without a legitimate reason, the employer can withhold their corresponding wages for that period.
3) Justification for Absence:** Legitimate reasons for absences that wouldn’t violate the “No Work, No Pay” principle include:
* Approved leave of absences (sick leave, vacation leave)
* Legal holidays
* Strikes or lockouts declared legal by the Department of Labor and Employment (DOLE)
* Circumstances beyond the employee’s control (e.g., natural disasters, illness requiring hospitalization)
Examples (Using Current Events):**
* Scenario 1: A call center agent takes an unauthorized leave of absence for two days to attend a personal event. The employer can withhold the agent’s wages for those two days based on the “No Work, No Pay” principle.
* Scenario 2: Due to a government-imposed lockdown during a pandemic surge, a factory is forced to close for a week. The employees wouldn’t be entitled to wages for that week under the “No Work, No Pay” principle, as the closure is beyond the employer’s control. However, the company might choose to implement alternative solutions like temporary layoffs with partial pay or work-from-home arrangements (depending on the nature of the work).
- Exceptions and Considerations:
- Company Policy: Some companies might have more generous leave policies that allow for paid sick leave or other forms of compensated absences. These would supersede the basic “No Work, No Pay” principle.
- Force Majeure: Events beyond the control of both employer and employee (like natural disasters) might necessitate adjustments to the “No Work, No Pay” principle, depending on the specific situation.
- Importance:
The “No Work, No Pay” principle ensures fairness and a clear exchange of services for compensation. It protects employers from financial losses due to employee absences and motivates employees to fulfill their work obligations to earn their wages.
IV. LABOR STANDARDS
B. Wages
- Principles
b. Equal Pay for Equal Work
Equal Pay for Equal Work: Ensuring Fairness in the Philippines
The “Equal Pay for Equal Work” principle is a fundamental concept in Philippine labor law, enshrined in Article 135 of the Labor Code and further elaborated in jurisprudence. It guarantees that employees performing work of equal value should receive equal wages, regardless of factors like gender, race, or age.
Key Points:
- Equal Work: This refers to jobs requiring similar skills, effort, responsibility, and performed under similar working conditions.
- Equal Pay: Wages, salaries, allowances, and other forms of remuneration should be comparable for employees doing equal work.
- Discrimination: Paying employees differently based solely on factors like gender, race, or age is considered discriminatory and violates this principle.
Examples (Using Current Events):
* **Scenario 1:
A large retail company employs cashiers. Both male and female cashiers perform the same duties – handling customer transactions, receiving payments, and bagging groceries. Under the “Equal Pay for Equal Work” principle, they should be paid the same wage rate, regardless of their gender.
* **Scenario 2:
A company has two graphic designers with similar experience and qualifications. However, the company pays the male designer a higher salary because of his seniority (despite them performing the same design tasks). This could be considered a violation of the principle, as seniority wouldn’t necessarily equate to a significant difference in the value of their work (unless the senior designer has additional responsibilities).
- Importance:
The “Equal Pay for Equal Work” principle promotes fairness and prevents wage discrimination based on arbitrary factors. It ensures that employees are valued based on the work they perform, not their personal characteristics.
Challenges and Considerations:
* Job Evaluation: Determining what constitutes “equal work” can be complex. Job evaluation systems can help assess the skills, effort, responsibility, and working conditions required for different positions.
* Experience and Seniority: While equal work demands equal pay, experience and seniority might be considered factors for wage differentials, as long as they are objectively justified and demonstrably linked to the value of the work performed.
Remember:
Employees who believe they are being discriminated against in terms of pay based on factors like gender, race, or age can file a complaint with the National Labor Relations Commission (NLRC) for investigation and potential redress.
IV. LABOR STANDARDS
B. Wages
- Principles
c. Fair Wage for Fair Work
Fair Wage for Fair Work: Balancing Compensation with Work Value
The “Fair Wage for Fair Work” principle in Philippine labor law goes beyond simply receiving wages for work performed. It emphasizes that the compensation an employee receives should be fair and just, reflecting the value of the work they do, the cost of living, and prevailing wages in the industry.
Key Points:
* Fairness and Adequacy: Wages should be sufficient to provide for the basic needs of an employee and their family, considering factors like the nature of the work, required skills, and prevailing economic conditions.
* Living Wage: The concept of a “fair wage” often overlaps with the concept of a “living wage,” which is the minimum income necessary to cover basic necessities in a particular location.
* Collective Bargaining: Unions can negotiate for wages that consider the “Fair Wage for Fair Work” principle, taking into account factors like productivity, company profitability, and inflation.
Examples (Using Current Events):
* Scenario 1: A garment factory pays its workers a minimum wage that barely covers their daily expenses. This could be challenged based on the “Fair Wage for Fair Work” principle, especially if the company is profitable and the cost of living in the area is high.
* Scenario 2: Nurses play a critical role in the healthcare system, requiring extensive education and training. However, their salaries might not always reflect the complexity and importance of their work. This could be seen as a violation of the principle, and nurses’ unions might advocate for higher wages to better reflect the value they bring.
Importance:
The “Fair Wage for Fair Work” principle promotes decent work conditions and helps ensure a living wage for employees. It encourages employers to value their workforce appropriately and contributes to a more equitable distribution of income.
- Challenges and Considerations:
- Cost of Living: What constitutes a “fair wage” can vary significantly depending on the location and cost of living.
- Industry Standards: Wages are often influenced by prevailing rates in a particular industry. Negotiating for a “fair wage” might involve considering industry benchmarks and skill sets.
- Enforcing Fairness:
While no specific law mandates a “fair wage,” the principle serves as a guiding concept in labor disputes and wage setting mechanisms. Employees and unions can use it to advocate for better compensation, and the DOLE can consider it when establishing minimum wage rates.
IV. LABOR STANDARDS
B. Wages
- Principles
d. Non-Diminution of Benefits – Labor Code, art. 100
Key Points of Article 100 on Non-Diminution of Benefits (Philippine Labor Code)
Article 100 protects employees from having their benefits reduced or taken away by their employers. Here are the key points:
A) Protection against Reduction or Elimination: This prohibits employers from unilaterally decreasing or eliminating benefits that employees were already enjoying at the time the Labor Code (Book IV of Presidential Decree No. 444) was enacted on May 1, 1974, or when they started working for the company (whichever is later).
B) Applies to Various Benefits: This covers a wide range of benefits beyond just base salary. It can include:
- Allowances (rice allowance, transportation allowance, etc.)
- Bonuses (Christmas bonus, productivity bonus, etc.)
- Health insurance coverage
- Overtime pay calculations (if a more favorable method existed before)
- Paid time off (sick leave, vacation leave, etc.)
C) Exception: Not Absolute: There can be exceptions in certain situations. These might include:
- Financial difficulty of the company (requires proof and following proper procedures)
- Changes mandated by law (e.g., a new statutory minimum wage)
- Collective bargaining agreement (CBA) provisions that supersede the Labor Code (if more favorable to the employee)
Examples:
* Mark, a factory worker, has been receiving a transportation allowance of Php 100 per day since he started working there in 2010. The company cannot reduce this allowance to Php 50 per day without justification based on exceptions mentioned above.
* Lisa, an office employee, enjoys a Christmas bonus equivalent to one month’s salary. The company cannot change this policy to a fixed amount of Php 5,000 if the bonus based on a month’s salary was already established when she was hired.
* A company might argue financial difficulty and initiate a process to reduce meal allowances for all employees. However, they would need to demonstrate financial hardship and follow proper procedures outlined by the Department of Labor and Employment (DOLE).
Importance:
Article 100 protects employee welfare and prevents employers from arbitrarily taking away benefits that employees have come to rely on. It helps ensure a degree of stability and predictability regarding employee compensation and benefits.
IV. LABOR STANDARDS
B. Wages
- Payment of Wages
– Labor Code, arts. 102-105; Omnibus Rules
Implementing the Labor Code, Book III, Rule VIII, secs. 1-7 and 10-14
Key Points on Payment of Wages (Article 102, Selected Sections of Implementing Regulations):
Form of Payment (Article 102 & Implementing Regulations):
1) Generally, wages must be paid in legal tender (cash).
2) Exceptions are allowed for:
- CHECKS/MONEY Orders:
A) If customary on the date the Labor Code took effect (1974).
B) As stipulated in a collective bargaining agreement.
C) When specific conditions are met (like having a bank nearby and employee consent).
Frequency of Payment (Article 103 & Implementing Regulations):
- Wages must be paid at least twice a month with intervals not exceeding 16 days.
- Exceptions are allowed for reasons beyond the employer’s control (force majeure) with immediate payment upon resolution.
- For tasks exceeding two weeks, payments are proportional to work completed every 16 days, with final settlement upon completion.
Place of Payment (Article 104 & Implementing Regulations):
- Wages are generally paid at or near the workplace.
- Exceptions are allowed for:
1) Peace and order issues, emergencies, or calamities.
2) When free transportation is provided to and from the payment location.
3) Other similar circumstances (as long as travel time is compensated).
- Wages cannot be paid in specific locations like bars, nightclubs, etc.
Direct Payment (Article 105 & Implementing Regulations):
- Wages should be paid directly to the employee.
- Exceptions are allowed for:
A) Written authorization from the employee for payment to a family member.
B) Legally authorized deductions (insurance premiums, union dues with proper authorization).
C) Payment to heirs in case of the employee’s death.
Examples:
- A company cannot pay its employees with coupons or vouchers, even if the employees request it. They must be paid in cash.
- A company with a long history of paying salaries by check can continue this practice if a bank is nearby for encashment and employees have reasonable time to withdraw their wages during working hours.
- Construction workers on a long-term project might receive bi-weekly payments based on the percentage of work completed, with a final payment upon project completion.
- Due to a typhoon, a company might temporarily pay wages at a nearby community center if the workplace is inaccessible.
- An employee can authorize their spouse to collect their paycheck if they provide written permission to the employer.
Overall:
These regulations aim to ensure employees receive their wages promptly, in a convenient form, and without any unfair deductions or restrictions on how they use their money.
IV. LABOR STANDARDS
B. Wages
- Prohibitions Regarding Wages
– Labor Code, arts. 112-119; DOLE L.A. No. 11-14
Key Points on Prohibitions Regarding Wages (Articles 112-119, Philippine Labor Code):
Employee Freedom and Wage Disposal (Article 112):
1) Employers cannot restrict how employees spend their wages.
2) Employees cannot be forced to buy products or services from the employer or any designated entity.
Authorized Wage Deductions (Article 113):
* Deductions are only allowed for specific reasons:
- Employee-consented insurance premiums paid by the employer.
- Union dues, with proper authorization (check-off by union or written employee consent).
- Deductions mandated by law or Department of Labor and -
Employment (DOLE) regulations.
Deposits for Loss or Damage (Articles 114 & 115):
* Employers might require deposits to cover potential loss or damage to tools/equipment:
- Only in specific trades or when deemed necessary by DOLE regulations.
* Deductions from deposits can only happen after:
- The employee is given a chance to explain.
- Clear evidence establishes employee responsibility.
Prohibited Wage Practices (Articles 116-118):
1) Withholding wages or forcing “kickbacks” (giving up part of wages) is illegal.
2) Deductions cannot be made to guarantee employment or continued employment.
3) Employers cannot retaliate against employees who exercise their rights under the Labor Code (filing complaints, testifying).
False Reporting (Article 119):
* Providing false information regarding wages or related records is unlawful.
Examples:
- A company cannot require its employees to buy uniforms from a specific store chosen by the employer.
- An employer can deduct union dues from an employee’s wages if the employee has authorized it through a check-off or written consent.
- A construction company can require a deposit from workers for tools but can only deduct from the deposit if a worker damages the tools and their responsibility is proven.
- It’s illegal for a company to withhold part of an employee’s salary as a “security deposit” in exchange for a job.
- An employer cannot fire or reduce the wages of an employee who files a complaint about unpaid wages.
- A company manager cannot report false overtime hours for employees to avoid paying overtime wages.
Overall:
- These articles aim to protect employees from unfair wage deductions and ensure they receive their full compensation. They also prevent employers from using wages to manipulate or control employees.
IV. LABOR STANDARDS
B. Wages
- Wage Distortion
– Labor Code, art. 124
Key Points on Wage Distortion (Article 124 of the Philippine Labor Code):
What is Wage Distortion?
* Wage distortion occurs when a mandated wage increase disrupts the existing pay structure within a company. This happens when the increase eliminates or significantly reduces the intentional differences in salary levels between different employee groups. These differences are typically based on factors like:
A) Skills: Higher-skilled jobs often command higher wages.
B) Length of Service: More experienced employees might earn more than those who are new.
C) Other factors: Responsibilities, difficulty of tasks, educational qualifications, etc.
Addressing Wage Distortion:
* The law recognizes that wage distortions can create unfairness and demotivation. Here’s how the process is addressed:
1) Negotiation:
If a company has a union, the employer and union representatives should negotiate to correct the wage structure imbalances caused by the wage increase.
If no union exists, the employer and workers should still attempt to reach an agreement on correcting the distortions.
2) Dispute Resolution:
If negotiations fail, there are different paths depending on the presence of a union:
- With Union: The dispute goes to voluntary arbitration, with a decision required within 10 days.
- No Union: The National Conciliation and Mediation Board (NCMB) attempts conciliation. If unresolved after 10 days, it goes to compulsory arbitration through the National Labor Relations Commission (NLRC), with a mandatory decision within 20 days.
Important Notes:
- The process of resolving wage distortions should not delay the implementation of the mandated wage increase.
- Workers paid by piecework or other result-oriented methods are still entitled to receive at least the minimum wage for an 8-hour workday (or a proportional amount for less than 8 hours).
- Existing apprenticeship agreements might need to be adjusted to reflect the new minimum wage.
Examples:
A) Company A has a salary structure where experienced supervisors earn Php 20,000 per month, and new employees start at Php 15,000. A mandated wage increase of Php 2,000 for everyone would create a distortion because the gap between the two groups shrinks significantly. The company would need to adjust the pay structure to maintain a reasonable difference based on experience.
B) Company B, which doesn’t have a union, implements a mandated wage increase. This results in some entry-level employees earning close to the salaries of mid-level employees with more experience. The company can initiate discussions with the workers to find a solution that maintains a fair wage gap based on experience.
Overall:
- Wage distortion provisions aim to maintain a balanced and fair wage structure within companies even after mandated wage increases. This helps ensure that employees are rewarded for their skills, experience, and contributions to the company.
IV. LABOR STANDARDS
B. Wages
- Minimum Wage
– Labor Code, art. 99; Omnibus Rules Implementing the Labor Code, Book III, Rule VII, secs. 7, 9 and 15
Key Points on Minimum Wage in the Philippines (Article 99, Selected Sections):
Minimum Wage Setting:
* Regional Tripartite Wages and Productivity Boards (RTWPBs) set minimum wage rates for agricultural and non-agricultural workers in each region.
Basis of Minimum Wage:
* The minimum wage applies to the standard work hours, which is 8 hours per day.
Workers Paid by Results (Piecework, etc.):
* These workers must also receive at least the minimum wage for the standard work hours (or a proportional amount for less than 8 hours).
* The adjusted minimum wage for piecework is calculated based on the percentage increase in the overall minimum wage.
Example:
- Previous minimum wage: Php 300/day
- New minimum wage increase: Php 20
- % Increase = (20 / 300) x 100 = 6.67%
- Let’s say a worker earns Php 10 per piece they produce.
- Increase in rate/piece = 10 x 6.67% = Php 0.67
- Adjusted rate/piece = 10 + 0.67 = Php 10.67
Exemptions:
1) SMALL Retail/Service Establishments: Businesses with not more than 10 employees may apply for exemption from the minimum wage increase, subject to RTWPB approval.
2) NEW Businesses: New businesses outside Metro Manila and economic zones established between July 1989 and June 1993 might be exempt for up to 3 years, depending on location.
Important Notes:
- The exemptions mentioned above may have changed or been revised since the provided rule statements were potentially amended. It’s always best to consult the Department of Labor and Employment (DOLE) for the latest information.
- Workers in exempted establishments (if any) are still entitled to fair and reasonable wages.
Overall:
- The minimum wage system aims to ensure workers receive a basic level of compensation that meets their needs. The provisions for workers paid by results and exemptions highlight the need for both fairness and flexibility in implementing minimum wage regulations.
IV. LABOR STANDARDS
C. Leaves
1. Service Incentive Leaves – Labor Code, art. 95; Omnibus Rules
Implementing the Labor Code, Book III, Rule V, secs. 1-6
Key Points of Service Incentive Leave (SIL) in the Philippines (Article 95 and its Implementing Rules):
Eligibility:
* Employees who have rendered at least one year of service (12 months, continuous or broken) are entitled to SIL.
Exceptions:
- Government employees
- Domestic helpers and those in personal service
- Managerial employees
- Field personnel and unsupervised employees (contract, commission-based, etc.)
- Employees already receiving similar benefits (vacation leave of at least 5 days)
- Employees in establishments with less than 10 employees (unless exempted by the Department of Labor and Employment)
Leave Entitlement:
* 5 days of paid service incentive leave per year.
* The leave is separate from other leaves (sick leave, vacation leave).
Accrual and Use:
- Entitlement starts from December 16, 1975 (the date the law took effect).
- Unused SIL can be converted to cash at the end of the year.
Relationship with Existing Benefits:
* Employers cannot reduce existing benefits (from agreements or policies) because of the implementation of SIL.
Examples:
A) Sarah, an office employee who has been working for a company for 18 months, is entitled to 5 days of SIL with full pay. She can use these days for vacations, personal errands, or sick leave (depending on her company’s policy).
B) Mark, a contractual worker who gets paid per project, is not eligible for service incentive leave because his employment doesn’t meet the minimum service requirement.
C) Michael, who works in a small family business with only 7 employees, wouldn’t be entitled to SIL unless the Department of Labor and Employment grants an exemption due to their specific situation.
IV. LABOR STANDARDS
C. Leaves
- Leaves under Special Laws
a. Expanded Maternity Leave – R.A. No. 11210
Key Points of the Expanded Maternity Leave Law (R.A. No. 11210) :
The Expanded Maternity Leave Law significantly increased the benefits for new mothers in the Philippines.
Increased Leave Entitlement:
A) Female employees are entitled to 105 days of maternity leave with full pay, regardless of the type of delivery (normal or caesarean).
B) This is a significant increase from the previous 60 days for normal delivery and 72 days for caesarean delivery.
Leave for Miscarriage or Termination:
* In case of miscarriage or emergency termination of pregnancy, employees are entitled to 60 days of maternity leave with full pay.
Solo Parent Benefit:
- Solo mothers, as defined by R.A. No. 8972 (Solo Parents’ Welfare Act), are entitled to an additional 15 days of maternity leave with full pay, bringing their total to 120 days.
Allocation of Leave Credits:
- The law allows a new mother to allocate up to 7 days of her maternity leave credits to her spouse, legitimate or common-law partner, or any blood relative who will actually care for the child.
Maternity Leave is a Separate Benefit:
- Maternity leave is separate from sick leave or vacation leave.
Examples:
Maria, a new mother who just gave birth through natural delivery, is entitled to 105 days of maternity leave with full pay from her employer.
Sarah, who experienced a miscarriage, can avail of 60 days of maternity leave with full pay under this law.
Lisa, a solo parent who gave birth through caesarean section, is entitled to a total of 120 days of leave (105 days standard + 15 days solo parent benefit).
Daniel, Jessica’s husband, can take up to 7 days of leave to support Jessica after childbirth if Jessica allocates some of her maternity leave credits to him.
Overall:
The Expanded Maternity Leave Law provides significant support to new mothers by offering them more time to recover and bond with their newborns. It also recognizes the challenges faced by solo parents and allows for flexibility in utilizing leave credits.
IV. LABOR STANDARDS
C. Leaves
- Leaves under Special Laws
b. Paternity Leave – R.A. No. 8187, as amended by R.A. No. 11210
Key Points on Paternity Leave in the Philippines (R.A. No. 8187):
Eligibility:
* Applies to married male employees only.
* No minimum service requirement is specified in the law.
Leave Entitlement:
* Seven (7) days of paid paternity leave.
* “Paid” means the employee receives his regular salary during the leave.
Purpose:
* To allow the father to provide support to his wife during her recovery after childbirth or miscarriage.
* To enable him to participate in childcare during the newborn stage.
Important Notes:
- The employer requires notification of the pregnancy and expected delivery date.
- This leave is separate from sick leave or vacation leave.
R.A. No. 11210 (Expanded Maternity Leave Law) introduced the option for qualified fathers to avail of maternity leave credits allocated by the mother. This is separate from the paternity leave under R.A. No. 8187.
Examples:
A) Mark, a new father, wants to take time off to help his wife recover after childbirth and bond with their new-born baby.
B) Mark can avail of his 7-day paternity leave with full pay from his employer.
C) Lisa, a new mother, is entitled to 105 days of maternity leave under the Expanded Maternity Leave Law. She decides to allocate 15 days of her leave to her husband, Tom.
D) In this scenario, Tom can avail of 15 days of maternity leave credits on top of the 7-day paternity leave provided by R.A. No. 8187.
Who is Not Eligible?
* Unmarried male employees (they can potentially benefit from allocated maternity leave credits under R.A. No. 11210 with the mother’s consent).
Overall:
Paternity leave in the Philippines provides married fathers with paid time off to support their wives and newborns. While the current law offers a limited timeframe, the option for allocated maternity leave credits under the Expanded Maternity Leave Law allows for more flexibility for couples.
IV. LABOR STANDARDS
C. Leaves
- Leaves under Special Laws
c. Solo Parent Leave – R.A. No. 8972, as amended by R.A. No. 11861
Key Points of Solo Parent Leave under the Expanded Solo Parents’ Welfare Act (R.A. No. 11861)
The Expanded Solo Parents’ Welfare Act amends the original Solo Parents’ Welfare Act (R.A. No. 8972) regarding leave benefits. Here are the key points:
New Parental Leave:
a) Solo parents with at least six (6) months of service are entitled to a forfeitable and non-cumulative parental leave of seven (7) working days per year.
b) This is separate from other leave privileges under existing laws.
c) “Forfeitable” means if not used within the year, it’s lost and cannot be carried over.
d) “Non-cumulative” means unused days from previous years cannot be added to the current year’s entitlement.
Who Qualifies as a Solo Parent: (Expanded Definition)
1) Parent who is raising a child (or children) on their own.
Includes:
- Single or married parents who are abandoned by their spouse for at least six (6) months.
- Legally separated or annulled parents with sole custody.
- Parents whose spouse is detained or sentenced for at least three (3) months.
- Adolescent parents below 19 years old who choose to raise the child alone.
- Solo grandparents with sole parental care over their grandchildren.
Example 1:
Sarah, a single mother who has been working for a company for 8 months, needs to take time off to attend her child’s school play.
Under the Expanded Solo Parents’ Welfare Act, once Sarah completes 6 months of service, she’ll be eligible for 7 days of solo parent leave.
She can use these days for her child’s school play or other child-related activities.
Example 2:
Michael, a solo parent due to legal separation, has been working for his company for more than a year. He needs to take a leave to accompany his child to a doctor’s appointment.
Michael can avail of his 7-day solo parent leave on top of any regular sick leave or vacation leave he might be entitled to under his company’s policy.
Important Notes:
This law provides additional leave specifically for solo parents.
The leave is intended for solo parents to attend to their children’s needs.
It’s crucial to check with your employer for specific company policies regarding the implementation of this law.
Overall:
The Expanded Solo Parents’ Welfare Act recognizes the challenges faced by solo parents and aims to provide them with additional support by granting them separate leave privileges.
IV. LABOR STANDARDS
C. Leaves
d. Gynecological Leave – R.A. No. 9710
Here are the key points of Gynecological Leave in the Philippines:
Eligibility:
A) This benefit applies to female employees.
B) They must have worked for at least six (6) months continuously within the last twelve (12) months for the same employer.
Leave Entitlement:
1) Employees can avail a special leave of two (2) months with full pay.
2) “Full pay” refers to the gross monthly compensation, which includes basic salary plus mandatory allowances set by law or regional wage boards.
Purpose:
- This leave is intended for recovery after surgery caused by gynecological disorders.
This benefit is separate from sick leave or vacation leave.
Example:
Maria, an employee who has been working for a company for 8 months, undergoes surgery for a gynecological disorder.
Since she hasn’t met the MINIMUM 6-month CONTINUOUS service requirement within the last year, she wouldn’t be eligible for this specific Gynecological Leave benefit.
However, she might still be entitled to sick leave or other forms of leave depending on her company’s policy.
