13th Month Pay Law w2q4d

™13th Month Pay Law Employee Wages and Benefits 2010-02-21

Presidential Decree No. 851 (otherwise known as Thirteenth Month Pay Law), as amended by Memorandum Order No. 28, requires all employers to pay their employees a 13th month pay not later than December 24 of every year.

Historical Backdrop. Originally, when PD 851, issued by Pres. Marcos, took effect on December 16, 1975, only employees receiving a basic salary of not more than P1,000 a month were entitled to 13th pay. On August 13, 1986, Pres. Aquino, through Memorandum Order No. 28, removed the salary ceiling of P1,000. With the removal of the salary ceiling, all rank and file employees become entitled to a 13th month pay regardless of the amount of their monthly basic salary (unless their employers are exempted from the application of PD 851).

Employees Covered by 13th Month Pay Law. All rank-and-file employees, regardless of their designation or employment status, and irrespective of the method by which their wages are paid, who have worked at least one month during the calendar year are entitled to 13th month pay. Rank and File Employees Meaning.

As stated above, only rank-and-file employees are entitled to 13th month pay. Managerial employees are excluded from the coverage of the law. The Labor Code distinguishes a rank-and-file employee from a managerial employee. It provides that a managerial employee is one who is vested with powers of prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall discharge, assign or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definition are considered rank-and-file employees.

Amount of 13th Month Pay. The 13th month pay shall be in the amount not less than 1/12 of the total basic salary earned by the employee within the calendar year. Computation

Only basic salary is included in the computation of 13th month pay. Allowances and monetary benefits which are not considered or integrated as part of the regular or

basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, , night differential and holiday pay, and cost-of-living allowances, shall be excluded from the computation. However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees.

Time of Payment of 13th Month Pay. The required 13th month pay shall be paid not later than December 24 of each year. An employer, however, may give to his employees one half of the required 13th month pay before the opening of the regular school year and the other half on before the 24th of December of every year. The frequency of payment of this monetary benefit may be the subject of agreement between the employer and the recognized/collective bargaining agent of the employees.

Employees excluded from coverage of 13th month pay law. 1.

Managerial employees;

2.

Those covered under the civil service law;

3.

Those already receiving 13th month pay or its equivalent. Christmas bonus, mid-year bonus, cash bonuses and other payments amounting to not less than 1/12 of the basic salary are treated as equivalent of 13th month pay;

4.

Household helpers and persons in the personal service of another; and

5.

Those paid on purely commission, boundary, or task basis, and those who are paid fixed amount for performing specific work except those paid on a piece-rate basis.

13th Month Pay of Certain Types of Employees Employees paid on commission basis.

Employees paid on a purely commission basis are not entitled to 13th month pay. They are expressly excluded from the coverage of PD 851. However, employees paid on partly commission basis, i.e., those guaranteed with a fixed wage aside from the commission, are entitled to 13th month pay. Computation. In the computation of the basic salary of employees paid partly on commission basis, we must distinguish between the two types of commission: 1.

Commission as an incentives or encouragement to ensure productivity, i.e., productivity bonus; and

2.

Commission as a direct remuneration for service rendered.

Commission that take the form of an incentives or encouragement to ensure productivity, e.g., productivity bonus, does not form part of the basic salary. As such, it may be excluded from the computation of 13th month pay. Only the fixed or guaranteed wage is required to be included in the computation (see Boie Takeka case, 1993.) Basic salary = Fixed wage (commission is excluded) On the other hand, commission that takes the form of a direct remuneration for services rendered should be included in the computation of the basic salary. That is, it should be added to the guaranteed wage of the employee in computing his “basic salary” (see Philippine Duplicators v. NLRC, 1993.) Basic salary = Fixed wage + Commission 13th Month Pay of Employees with Multiple Employers.

Employees with multiple employers are entitled to 13th month pay from all their private employers. Thus, if an employee works in two or more private firms, he is entitled to the pay from both or all of them. If he is a government employee, but works part time in a private enterprise, he is entitled to 13th month pay from the private enterprise. 13th Month Pay of Private School Teachers.

Private school teachers are entitled to 13th month pay regardless of the numbers of months they work in a year, provided it is at least one month. Payment of 13th Month Pay to Resigned or Separated Employees.

Employees who resigned or were separated during the calendar year shall be entitled to 13th month pay in proportion to the length of time he worked during the year, provided it is at least one month. The payment may be demanded by the employee upon the cessation of employment. Example

1.

Assuming an employee earning a basic salary of P12,000.00 per month had worked for at least 9 months at the time of his separation, how much is his 13th month pay? Answer: P9,000.00. Computation: (P12,000.00 x 9 months) ÷ 12 = P9,000.00

Cases

1.

For 2 to 3 years, Sevilla Trading, allegedly by mistake, added the night , maternity leave pay, etc., in the computation 13th month pay. The court ruled that the inclusion may no longer be withdrawn if it has already ripened into a company practice. Nota bene: There is no specific rule as to how many years are necessary to constitute “company practice”. (Sevilla Trading v. AVA Tomas, GR No. 152456.)

2.

Employees paid according to “boundary” system are not entitled to 13th mo pay. Boundary system is where the employees do not receive fixed wages, but retain only those sums in excess of the “boundary” or fee they pay to the owners or operators of their vehicles. They are akin to employees paid on purely commission basis. (R&E Transport v. Latag, G.R. No. 155214.)

3.

Drivers who are paid on commission basis, but with guaranteed minimum wage in case their commission be less than their basic minimum, are entitled to 13th month pay. (PACIWU v. NLRC, GR No 107994.)

References 1.

Presidential Decree No. 851, effective December 16, 1975.

2.

Revised Rules and Regulations Implementing Presidential Decree No. 851 Last Edited: Sunday, December 18, 2011 Caveat: Subsequent court and istrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.

Determining compensable hours worked Employee Wages and Benefits, Labor Fundamentals 2009-09-05

Normal Hours of Work The normal hours of work under the Labor Code is 8 hours in one work day. Work day is understood to mean one 24-hour cycle which starts from the time the employee is engaged to work and ends on the same time the following day. For example, if the employee is engaged to work from 8:00am to 5:00pm, his work day is the 24-hour cycle that starts from 8:00am and ends at 8:00am of the following day. The employer is free to adopt what time in a day the work shall start as long as the total number of hours worked will not exceed 8 hours. If the number of hours worked exceed 8 hours, the employee must be paidovertime pay for the excess. How to compute overtime pay?

Hours worked definition Hours worked refers to all compensable period of work. Hours work includes: 1.

All the time during which an employee is required to be on duty or to be at a prescribed workplace; and

2.

All the time during which an employee is suffered or permitted to work.

Meal periods The employer must give his employees not less than 60 minutes or one hour timeoff for their meals. This period in noncompensable, which means that it is not to be included in the computation of hour’s worked. For example, if an employee’s work is from 8:00am to 5:00 with one hour meal break from 12:00nn to 1:00pm, the total compensable hours of the employee is 8 hours, i.e., from 8:00am – 12:00nn and 1:00pm – 5:pm. The period from 12:00nn to 1:00pm is noncompensable.

Shortened meal periods Under exceptional circumstances, the employer may give the employee a meal period of not less than 20 minutes, provided that such shorter meal period is credited as compensable hours worked of the employee. Shortened meal period may be allowed under the following cases: 1.

Where the work is non-manual work in nature or does not involve strenuous physical exertion;

2.

Where the establishment regularly operates not less than 16 hours a day;

3.

In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss; and

4.

Where the work is necessary to prevent serious loss of perishable goods.

Rest periods The employer may give their employees rest periods or coffee breaks during working hours in order to beef them up or to make them more productive. Unlike meal periods, rest periods running from 5 to 20 minutes is compensable as hours worked. Rest period running for more that 20 minutes may or may not be compensable depending on the situation. See letter (b) under Principles in determining hours worked. The giving of rest period, however, is not required under the Labor Code, and is largely a management prerogative.

Principles in determining hours worked

The following general principles may be used to determine whether the time spent by an employee is considered hours worked or not: 1.

All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion.

2.

An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his work place, to go elsewhere, whether within or outside the premises of his work place.

3.

If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor.

4.

The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either if the imminence of the resumption of work requires the employee’s presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee’s own interest.

Waiting time Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait.

On call duty An employee who is required to remain on call in the employer’s premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. The employee must be required to leave a word where he may be reached. An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call.

Lectures, meetings, training programs Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all of the following conditions are met: 1.

Attendance is outside of the employee’s regular working hours;

2.

Attendance is in fact voluntary; and

3.

The employee does not perform any productive work during such attendance.

References 1.

Chapter 1, Title I, Book Three, Labor Code of the Philippines (Article 82 to 85)

2.

Rule I, Book Three, Omnibus Rules Implementing the Labor Code. Last Edited: Friday, August 19, 2011 Caveat: Subsequent court and istrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.

Determining compensable hours worked Employee Wages and Benefits, Labor Fundamentals 2009-09-05




2.


Meal periods The employer must give his employees not less than 60 minutes or one hour timeoff for their meals. This period in noncompensable, which means that it is not to be included in the computation of hour’s worked. For example, if an employee’s work is from 8:00am to 5:00 with one hour meal break from 12:00nn to 1:00pm, the total

compensable hours of the employee is 8 hours, i.e., from 8:00am – 12:00nn and 1:00pm – 5:pm. The period from 12:00nn to 1:00pm is noncompensable.



2.


3.


4.



Principles in determining hours worked The following general principles may be used to determine whether the time spent by an employee is considered hours worked or not: 1.


2.


3.

If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as

hours worked, if the work was with the knowledge of his employer or immediate supervisor. 4.



On call duty An employee who is required to remain on call in the employer’s premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. The employee must be required to leave a word where he may be reached. An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call.



2.


3.


References 1.


2.


Determining compensable hours worked

Employee Wages and Benefits, Labor Fundamentals 2009-09-05




2.


Meal periods The employer must give his employees not less than 60 minutes or one hour timeoff for their meals. This period in noncompensable, which means that it is not to be included in the computation of hour’s worked. For example, if an employee’s work is from 8:00am to 5:00 with one hour meal break from 12:00nn to 1:00pm, the total compensable hours of the employee is 8 hours, i.e., from 8:00am – 12:00nn and 1:00pm – 5:pm. The period from 12:00nn to 1:00pm is noncompensable.



2.


3.


4.



Principles in determining hours worked The following general principles may be used to determine whether the time spent by an employee is considered hours worked or not: 1.


2.


3.

If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor.

4.



On call duty

An employee who is required to remain on call in the employer’s premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. The employee must be required to leave a word where he may be reached. An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call.



2.


3.


References 1.


2.


Pay Employee Wages and Benefits 2010-02-22

Pay Meaning pay refers to the additional compensation required by law to be paid to employees for work performed on non-working days, such as rest days and special days.

“No Work, No Pay” Rule During rest and special days, the principle of “no work, no pay” applies. Workers who were not required or permitted to work on those days are not by law entitled to any compensation. This is consistent with the definition above that pay is to be paid for work performed.

Performance of work is necessary for entitlement to pay.

Pay For Rest Days As a general rule, where an employee is made or permitted to work on his scheduled rest day, whether it is a regular day or a holiday, he shall be paid an additional compensation of at least 30% of his regular wage for that day. The rule is different for work performed on a rest day which is also a special day, in which case, 50% of the regulary daily rate is added, instead of 30% of the daily rate for special day. In sum, the pay rates for rest days are as follows: 1.

For work performed on rest days, an additional 30% of the daily rate or a total of 130%;

2.

For work performed on a rest day which is also a special day, an additional of 50% of the daily rate or a total of 150%; and

3.

For work performed on a regular holiday which is also the employee’s rest day, an additional 30% of the regular holiday rate of 200% or a total of 260%. Computation

For work performed on rest day, using P250.00 as Basic pay, the rate may be determined as follows: Rate on Rest day = Basic pay + pay Where, pay = 30% of Basic pay = 30% of P250.00 = 0.3 x P250.00 = P75.00 Thus, Rate on Rest day = Basic pay + pay = P250.00 + P75.00 = P325.00 For work performed on a regular holiday which is also the employee’s rest day, the rate may be determined as follows: Rate = Daily rate on holiday + pay Where, pay = 30% of Daily rate on holiday, and Daily rate on holiday = 200% of Basic pay = P500.00

Thus, pay = 0.3 x Daily rate on holiday = 0.3 x P500.00 = P150.00 Thus, the rate on rest day falling on a holiday is: Rate = Daily rate on holiday + pay = P500.00 + P150.00 = P650.00 Or, Rate = 260% of Basic pay = 2.6 x P250.00 = P650.00

pay for Special Days There are two national special days observed in the Philippines: 1.

All Saints Day (November 1); and

2.

The last day of the year (December 31). Work performed on special days merits additional compensation of not less than 30% on top of the basic pay or a total of 130%. Computation

Using P250.00 as daily rate (Basic pay), the Rate on special day may be determined as follows: Rate on special day = Basic pay + Where, = 30% of Basic pay = 30% of P250.00 = P75.00 Thus, Rate on special day = Basic pay + = P250.00 + P75.00 = P325.00 Or, Rate on special day = 130% of Basic pay = Basic pay x 1.3

= P250.00 x 1.3 = P325.00

Pay For Special Day falling on Rest Day. If the special day falls on employees scheduled rest day, he is entitled to at least 50% over and above the basic pay or a total of 150%. Computation

Rate for work on special days which is also the employee’s rest day entitles him to an additional 50% of the daily rate (Basic pay). Rate = Basic pay + pay Where, pay = 50% of Basic pay = P250.00 x 0.5 = P125.00 Thus, Rate = Basic pay + pay = P250.00 + P125.00 = P375.00 Or, Rate = 150% of Basic pay = Basic pay x 1.5 = P250.00 x 1.5 = P375.00 If no regular workdays and no scheduled regular rest days

Where the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled, he shall be paid an additional compensation of at least 30% of his regular wage for work performed on Sundays and holidays.

Pay and Holiday Pay Comparison Using the definition of pay above, holiday pay is not a pay because it does not requireperformance of work by the employee. In case of holiday pay, the employee is entitled payment even if he does not work. The same cannot be said of pay.

Thus, unlike in pay, the principle “no work, no pay” does not similarly apply to holiday pay. Last Edited: Friday, August 19, 2011 Caveat: Subsequent court and istrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.

Retirement Pay Law in the Philippines Employee Discipline and Termination, Employee Wages and Benefits 2014-02-21

Retirement Age Retirement is one of the modes of termination of employment. By retirement, the employment is terminated when the employee has reached a certain age, or after he has completed a certain number of years of service. Under the Labor Code (Art. 287), an employee may be retired upon reaching the retirement age established in the collective bargaining agreement (CBA) or other applicable employment contract. In the absence of such agreement, the employee may retire upon reaching the age of 60 or more, but not more than 65, provided he has served at least 5 years or more in the same establishment. The age 60 or more, but below 65, is considered as the voluntary retirement age. Sixty-five is considered as the compulsory retirement age. A company may have CBA or employment contract setting a retirement age different (higher or lower) from that fixed by law. For example, the CBA may fix the retirement age at 50. The CBA or employment contract may also establish a retirement age based on years of service of the employee. For example, it may provide that the employee may be retired after 20 years of service. The retirement age may also be established based on the combination of the age and tenure of the employee. For example, the contract may provide that “the employee may retire upon reaching the age of 50, or after 20 years of service, whichever comes earlier”. For underground mining employees, the voluntary retirement age under the Labor Code is 50 years or more, but not beyond 60. The compulsory retirement age is set 60.

It is important to note that the company cannot unilaterally fix the retirement age of employee. Retirement age may be established only by a valid CBA or employment contract, or in the absence of both, by the law. Another thing, the retirement age fixed by law applies only when no CBA or employment contract setting the retirement age exist. If there is such agreement or contract, the retirement age fixed by law won’t apply.

Retirement Pay If the establishment has a CBA or employment contract providing for a retirement plan or benefits to employees, the employee shall be entitled to receive the benefits as provided in the said CBA or contract. However, such benefits must not be less than that provided under the Labor Code. Under the Labor Code, the retirement pay is equivalent to at least one-half month salary for every year of service, a fraction of at least six months being considered as one whole year. The term one-half month salary shall mean 15 days plus 1/12 of the 13th month pay and the cash equivalent of not more than 5 days of service incentive leaves. Last Edited: Friday, February 21, 2014 Caveat: Subsequent court and istrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.

Service Incentive Leave Employee Wages and Benefits 2010-02-27

Basis The basis of the grant of Service Incentive Leave to qualified employees is found in Article 95 (Book Three, Title I) of the Labor Code. Section 2, Rule V, Book III of the Omnibus Rules contains the rules and regulations for the implementation this right.

Employees entitled to SIL Every employee (subject to the exceptions below) who has rendered at least one year of service is entitled to yearly service incentive leave of five days with pay. “At least one year of service” Meaning

The term “at least one-year service” means service for not less than 12 months, whether continuous or broken. The 12-month period shall be reckoned from the date the employee started working, including authorized absences and paid regular holidays. However, where the operation of the establishment as a matter of practice or policy, or that provided in the employment contract, is less than 12 months, such period shall be considered as one year.

Employees not covered The following employees are excluded from entitlement to SIL under the Labor Code (but they may be entitled to the same or similar benefits if so provided under other laws, or collective bargaining agreement or employment contract): 1.

Those of the government and any of its political subdivisions, including government-owned and controlled corporations;

2.

Domestic helpers and persons in the personal service of another;

3.

Managerial employees as defined in Book Three of the Labor Code;

4.

Field personnel and other employees whose 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;

5.

Those who are already enjoying the benefit herein provided;

6.

Those enjoying vacation leave with pay of at least five days; and

7.

Those employed in establishments regularly employing less than ten employees. (Omnibus Rules)

Manner of availment The service incentive leave may be used for sick and vacation leave purposes. And, at the end of the year, the unused SIL may be commuted to cash.

Commutability to cash Under the Omnibus Rules, the unused service incentive leave is commutable to its money equivalent at the end of the year. [N.B. Not found in the LC.]

Accumulation of Leave Credits Instead of u SIL, the employee may accumulate it and opt for its commutation to cash upon his resignation or separation from employment. Computation of SIL

In computing SIL, 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. (DOLE Handbook) Illustration

An employee was hired on January 1, 1997, and resigned on March 1, 1998. Assuming he has not used or commuted any of his SIL credits, he is entitled upon his resignation to the commutation of his accumulated SIL as follows: SIL earned as of Dec. 31, 1997 = 5 days Proportionate SIL for Jan. and Feb. 1998 = (2/12) x 5 days = 0.833 day Total as of March 1, 1998 = 5.833 days

Part-time Workers Are part-time workers entitled to the full five days SIL, or should the entitlement be on pro-rata basis? Part-time workers are entitled to full five days SIL. (BWC Advisory Opinion) The reason is that the Labor Code speaks of number of months worked in a year, not number of hours worked in a day, as basis for entitlement.

Vacation and Sick leave The Labor Code treats vacation leave and sick leave under the same category as Service Incentive Leave or leave with pay. Thus, the grant of vacation or sick leave with pay of at least five days may be credited as compliance with SIL. For example, if a company is giving its employees 15 days vacation leave, five days of which is with pay, the five-days paid vacation leave may be credited as SIL.

Case 1.

Petitioner CIT claimed that teachers are not entitled to SIL because they are engaged by the school on contractual basis. The claim was not sustained. It was held that the phrase “those who are engaged on task or contract basis” as mentioned in the Omnibus Rules should be read in relation to “field personnel”. Teachers, not being field personnel, are entitled to SIL. (CIT vs. Ople, 1987.)

2.

Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can conclude that the three (3)-year prescriptive period commences, not at the end of the year when the employee becomes entitled to the commutation of his service incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand of commutation or upon

termination of the employee’s services, as the case may be. (Auto Bus Transport, Inc. vs. Bautista, 2005) 3.

Petitioner’s contention that respondent is not entitled to the grant of service incentive leave just because he was paid on purely commission basis is misplaced. What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to respondent is whether or not he is a field personnel. (Auto Bus Transport, Inc. vs. Bautista, 2005)

4.

Exemptions. To claim exemption from payment of service incentive leave pay, it is the employer’s duty to prove that it is covered under the exemption. Thus, where the employer claims that the employee is not entitled to service incentive leave pay inasmuch as establishment employing less than ten (10) employees are exempted from paying service incentive leave pay, it has the duty to prove that there were less than ten employees in the company. (C. Planas Commercial, et al. vs. NLRC, G.R. No. 144619, November 11, 2005.) Last Edited: Friday, August 26, 2011 Caveat: Subsequent court and istrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.

Special Leave Benefits for Women Employee Wages and Benefits, News & Current Events 2011-08-19

Under the Republic Act 9710, otherwise known as “The Magna Carta of Women“, a woman employee shall be entitled to a special leave benefit of two (2) months with full pay based on her gross monthly compensation following surgery caused by gynecological disorders. As guidelines for the implementation of special leave benefits for women in the private sectors, the Department of Labor and Employment issued Department Order No. 112-11, Series of 2011. For female employees in the government service, you may refer to Civil Service Commission Guidelines on the Availment of the Special Leave Benefits for Women under RA 9710, CSC Resolution No. 1000432.

What is special leave benefit for women Special leave benefits for women refers to a female employee’s leave entitlement of two months with full pay based on her gross monthly compensation following surgery caused by gynecological disorders.

This benefit is in addition to leave privileges under existing law.

Who are qualified to avail of this benefit; Conditions All women employees in the private sector, regardless of age and civil status, are entitled to special leave benefits, provided she has complied with the following conditions: 1.

She has rendered continuous aggregate employment service of at least 6 months for the last 12 months;

2.

She has filed an application for special leave;

3.

She has undergone surgery due to gynecological disorders as certified by competent physician. Female employees who have taken a leave of absence following surgery for gynecological disorder or or after 15 September 2009 are entitled to avail of the benefit.

What is gynecological disorders Gynecologial disorders refer to disorders that would require surgical procedures such as dilatation and curettage and those involving female reproductive organs such as vagina, cervix, uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor. Gynecological surgeries shall also include hysterectomy, ovariectomy, and mastectomy.

How to apply for special leave The employee shall file her application for leave with her employer within a reasonable period of time from the expected date of surgery, or within such period as may be provided by company rules and regulations or by collective bargaining agreement (CBA).

When application for special leave is not necessary Prior application is not necessary in cases requiring emergency surgical procedure. However, the employee must notify the employer verbally or in writing within reasonable period of time, and after the surgery or recuperating period, she must immediately file her application using the prescribed form.

When special leave benefits shall be granted Special leave benefits shall be granted after the employee has undergone surgery. The employer, however, has the option to pay the employee before or during the surgery.

Benefit

The employee is entitled to full pay for two months based on her gross monthly compensation. Gross monthly compensation refers to the monthly basic pay plus mandatory allowances.

Benefit is non-convertible to cash Special leave benefit is non-cumulative and non-convertible to cash unless otherwise provided by a CBA. Last Edited: Tuesday, April 24, 2012 Caveat: Subsequent court and istrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.

Overtime Pay Employee Wages and Benefits 2010-02-23

Basis. All employees required to work beyond eight hours in one workday is entitled to overtime pay. The basis of overtime pay is found in Article 87 of the Labor Code. Article 87. Overtime work. Work may be performed beyond eight hours a day provided that theemployee is paid for the overtime work an additional compensation equivalent to his regular wage plus at least twenty-five percent thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate for the first eight hours on a holiday or rest day plus at least 30 percent thereof.

Terminology. Overtime Pay.

Overtime pay is the additional compensation payable to employee for services or work rendered beyond the normal eight hours of work. It is computed by multiplying the overtime rate with the number of hours in excess of the regular eight hours of work. Overtime Work.

Any work performed beyond the normal 8 hours of work in one workday is considered as overtime work.

Workday.

A workday is the consecutive 24-hour period which commences from the time the employee starts to work and ends at the same time the following day. To illustrate, if the employee regularly works from 8AM to 4PM, hisregular workday is the 24-hour period from 8AM to 8AM of the following day. Workdays do not necessarily corresponds to calendar days.

Overtime Pay Rates. Overtime pay rates depend upon the day the work is performed, whether it is ordinary working day, special day, holiday or rest day. For ordinary working day, an additional compensation equivalent to his regular hourly rate plus at least 25% thereof. For holiday, special day and rest day, an additional compensation equivalent to the rate for the first eight hours on a holiday or rest day plus at least 30% thereof.

Computation of Overtime Pay Assuming that the mininum wage rate is P250, how much is the overtime rate per hour? On ordinary day

On an ordinary day, the overtime rate per hour is determined as follows: First, compute the hourly rate of the employee: Regular hourly rate = Minumum wage rate ÷ 8 hours = P250 ÷ 8 hours = P31.25 per hour Now to determine overtime rate per hour: Overtime rate = Regular hourly rate + 25% of Regular hourly rate Overtime rate = P31.25 + (25% of P31.25) = P31.25 x 1.25 = P39.06 per hour On rest day and special day

Compute the hour rate of the employee on a rest day or special day: Hourly rate = 130% of Regular hourly rate = P31.25 x 1.30 = P40.625 per hour (Note: The hourly rate on rest day and special day is 130% of the regular rate.)

To determine overtime rate per hour: Overtime rate = Hourly rate on rest day + 30% Hourly rate on rest day = P40.625 + (30% of P40.625) = P40.625 x 1.30 = P52.81 per hour On rest day which falls on a special day

Compute the hourly rate of the employee on a rest day which falls on a special day: Hourly rate = 150% of Regular hourly rate = P31.25 x 1.50 = P46.875 per hour To determine overtime rate per hour: Overtime rate = Hourly rate + 30% of Hourly rate = P46.875 + (30% of P46.875) = P46.875 x 1.30 = P60.94 per hour On a regular holiday

Compute the hourly rate on regular holiday: Hourly rate = 200% of Regular hourly rate = P31.25 x 2 = P62.5 per hour To determine overtime rate per hour: Overtime rate = Hourly rate + 30% of Hourly rate = P62.50 + (30% of P62.50) = P62.50 x 1.30 = P81.25 per hour On a rest day which falls on a regular holiday

Compute the hourly rate: Hourly rate = 260% of Regular hourly rate = P31.25 x 2.60 = P81.25 per hour To determine overtime rate per hour:

Overtime rate = Hourly rate + 30% of Hourly rate = P81.25 + (30% of P81.25) = P81.25 x 1.30 = P105.625 per hour

Work need not be Continuous. Work performed by the employee need not be continuous as long as it falls within the same work day. For example, an employee who works in two shifts, one from 8AM to 12AM (four hours), and another from 4PM to 8PM of the same work day (another four hours), suffers a total of 8 hours of work. If he is required to work for another hour within the same work day (from 8AM to 8AM of the following day), then such work is subject to overtime pay.

Undertime cannot be Offset by Overtime. Some employers has the practice of offsetting undertime and overtime. For example, if an employee work for only 7 hours on any given day (one hour undertime), he will be required to make up for his undertime by requiring him to render additional one hour work on another day. This practice is prohibited under Article 87 of the Labor Code, viz: Article 87. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. x x x The rationale for provision is quite obvious. Offsetting undertime against overtime is improper because the employee would be deprived of the additional compensation for the overtime work he has rendered. Note that undertime is covered only by the regular hourly rate whereas overtime is subject to additional overtime rate. If the two are to be offset, the employee loses overtime pay to which he is entitled.

Emergency Overtime Work. As a general rule, employees may not be compelled to work in excess of eight hours or to render overtime work on any given day against his will. The exception to this rule is found in Artile 89 of the Labor Code. Under the said article, employees may be compelled to perform overtime work in any of the following cases: 1.

When the country is at war or under any national or local emergency;

2.

When overtime work is necessary to prevent loss of life or property, or in case of imminent danger to public safety;

3.

When there is urgent work to be performed on machines, etc., in order to avoid serious loss or damage to the employer;

4.

When the work is necessary to prevent loss or damage to perishable goods;

5.

When the completion or continuation of work is necessary to prevent serious obstruction or prejudice to the business; or

6.

When overtime work is necessary to avail of favorable weather or environmental conditions.

Managerial Employees not Entitled to Overtime Pay. Article 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods shall not apply to managerial employees. This includes overtime pay for overtime work. Thus managerial employees are not entitled to overtime pay for services rendered in excess of eight hours a day.

Cases 1.

Supervisory employees are considered as officers or of the managerial staff, and hence are not entitled to overtime, rest day and holiday pay. (Nat’l Sugar Refineries Corp. vs. NLRC, G.R. No. 101761. March 24, 1993) Last Edited: Friday, August 19, 2011 Caveat: Subsequent court and istrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.

Employee benefits in the Philippines Posted March 8, 2010 in Employer Tips, Philippines by EasyOutsource

On my previous post, I discussed the average salaries of traditional jobs in the Philippines. I also mentioned on that post that those figures don’t include other benefits that companies offer on top of the regular salaries employees receive. So what are the benefits that are required by the Philippine government to be given to working Filipinos? To give a short run down, the following are government-mandated benefits: Social Security System (SSS) contributions, Philippine Health Insurance (PhilHealth) contributions, Home Development Mutual Fund (Pag-ibig Fund) contributions, 13th month pay, service incentive leave, meal and rest periods, overtime pay, special holiday/rest day rates, and night shift differentials. Other more common benefits that are not mandated but are given by a lot of companies are: holiday bonus, mid-year bonus, and paid holiday and vacation leaves.



Social Security Sytem (SSS) – The Social Security System was created by the Philippine government. All employees hired by private companies are required to become an SSS member (Republic Act No. 8282). This system aims to protect its for when they are unable to work such as sickness, disability, maternity, old age and death, or other such contingencies not stated but will result in loss of income or results to a financial burden. When an employee gets sick, SSS will reimburse them with their equivalent daily salary multiplied by the number of days absent. When a female member gives birth, SSS gives the employee 2 months worth of salary to compensate for the time she will be off from work due to childbirth. The SSS also serves as a pension plan for its as SSS returns ’ monthly contributions after they retire from work.The amount of SSS monthly contribution is determined from the actual monthly salary an employee receives. 30% of total monthly contribution is deducted from an employee’s salary, while 70%



is subsidized by the employer. Philippine Health Insurance (PhilHealth) – The Philippine Health Insurance Corporation is the medical insurance company of the Philippines. All employees are required to be contributors of this service (Republic Act 7875). are given health and hospitalization subsidies should they or a dependent be hospitalized. Monthly contributions are based on actual employee monthly salaries and the



amount of employee contribution is matched equally by the employer. Home Development Mutual Fund (Pag-ibig Fund) – Employers are also required to contribute, on behalf of their employees, to the Home Development Mutual Fund (Republic Act 7835). This company provides the lowest interest housing and land acquisition loans to its that are payable for up to 30 years. This gives every Filipino worker an opportunity to own a house in easy-payment plans that can



directly be deducted from their monthly wages. 13th Month Pay – Based on Presidential Decree No. 851, all Filipino employees are entitled to a year-end bonus equivalent to one (1) month salary regardless of the nature of their employment. The 13th month pay is to be given no later than



December 24 of every year a worker is employed. Service Incentive Leave – According to Article 95 of the Labor Code of the Philippines, an employee who has worked for at least one (1) year in a company is entitled to five (5) days leave of absence, with pay, every year. If the employee does not avail of these paid leaves, the company may opt to have them do a mandatory leave of absence, with pay, or convert these unavailed paid leaves to their cash equivalents, to be given at the end of each year.



Meal and Rest Periods - According to Article 83 of the Labor Code of the Philippines, employees are entitled to one (1) hour break for meals on an eight-hour work day. Employees are also entitled to adequate rest periods in the morning and afternoon, of short durations, that will be counted as hours worked. These rest periods normally last for 15 minutes and can be used by employees as coffee or



snack breaks. Overtime Pay and Holiday/Rest Day Pay - Under Article 87, an employee who renders over eight (8) hours of service per day shall be given an overtime pay which is equivalent to his regular hourly wage plus at least twenty-five percent (25%) thereof. Under Article 93, if an employee is asked to work on their scheduled rest day or on a non-working holiday, the employee shall be paid an additional



compensation of at least thirty percent (30%) of his regular wage. Night Shift Differential – According to Article 86, every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each



hour of work performed between ten o’clock in the evening and six o’clock in the morning.



Other company benefits – Other company benefits that are not government mandated, but are usually given to employees anyway are: Holiday/Christmas Bonus – This is given in December, on top of the 13th month pay. This is considered as the company’s Christmas gift to their employees. Mid-Year Bonus – This is given in June, when the country’s school year starts. This is to assist employees in school enrollment fees for their children. This is also known as an educational assistance plan. Cost of Living Allowances – Some companies provide their employees with yearly rice, medicine, and clothing allowances. Paid Holiday and Vacation Leaves – On top of the mandated 5 days/year leave with pay, some companies give their employees additional paid holiday and vacation leaves. The number of days allocated for these leaves usually vary from company to company and depends on the number of years an employee has been of service to the company.

All the benefits mentioned above, that are enjoyed by Filipino employees, are what “sweetens the deal” more than the regular salaries that they receive. When faced with a choice between two jobs that pay more or less the same in of salary, an employee will always consider company benefits in order to make a sound decision. These benefits are equivalent to 30-50% of an employee’s yearly wage, sometimes more. In the end,

companies who know how to take good care of their employees will have a lower employee turn-over rate than those that give no more than government-required benefits. Freelancers can opt to enroll themselves to SSS, PhilHealth, and HDMF as self-employed individuals to avail of the benefits these institutions offer. However, if they’d wish to become , they would have to shoulder the entire contribution themselves to cover for both employee contribution and employer subsidy. The amount of the contribution will depend upon the income that freelancers will declare, and of course, benefits will also vary based on the amount of monthly contributions. On my next post, I will discuss the difference between full time jobs and part-time jobs.

REGION

WO No. DATE OF EFFECTIVITY

NONAGRICULTURE

AGRICULTURE Plantation Non-Plantation

NCR a/

WO 18/October P 429.00 - 466.00 3, 2013

P 429.00

P 429.00

CAR b/

WO 16/February 3, 2014

263.00 - 280.00

247.00 268.00

247.00 - 268.00

I c/


213.00 - 253.00

233.00

213.00

II d/

WO 16/January 247.00 - 255.00 5, 2014

235.00 243.00

235.00 - 243.00

III e/

WO 17/October 285.00 - 336.00 11, 2012

270.00 306.00

258.00 - 290.00

IV-A f/

WO 16/May 1, 2014

261.00 - 362.50

261.00 337.50

255.00 - 317.50

IV-B g/


205.00 - 275.00

215.00 225.00

215.00 - 225.00

236.00

236.00

V h/

WO 16/ January 236.00 - 260.00 10, 2014

VI i/

WO 21/ November 29, 2013

245.00 - 287.00

255.00

245.00

VII j/

WO18/ March 21, 2014

295.00 - 340.00

275.00 322.00

275.00 - 322.00

VIII k/

WO 17/October 16, 2012

260.00

235.00241.00

220.50

IX l/

WO 18/ June 10, 2013

280.00

255.00

235.00

279.00 294.00

279.00 - 294.00

X m/

WO 17/June 20, 291.00 - 306.00 2013

XI n/

WO 18/June 1, 2014

312.00

302.00

302.00

XII o/

WO 18/Aug. 1, 2014

270.00

252.00

252.00

XIII p/

WO 12/May 21, 2013

268.00

258.00

238.00

ARMM q/ WO 15/ Feb. 1, 2014

250.00

250.00

250.00

a/ Provides P10 increase in basic pay upon effectivity and integration of the P15 COLA under W.O. No. NCR-17 into the basic pay on January 1, 2014. b/ Granted P1, P8.00 & 6.00 increase in basic pay and P2, P6, P12 & P17 COLA integration. c/ Granted P8.00-P20.00 wage increase depending on asset size. d/ Granted P9.00-17.00 increase in basic pay for retail/service establishments employing less than 10 workers. e/ Provided integration of the P24 COLA and granted P6-P8 wage increase f/ Granted P2-90 wage increase (for workers receiving belowP255) for 5 years; P12.50 Conditional Temporary Productivity Allowance (for workers receiving above) g/ Granted P5 COLA & P1-66 increase in basic pay h/ Granted P8.00 increase in basic pay. i/ Granted P10.00 wage increase j/ Granted P13.00 COLA k/ Provided P10 COLA integration and additional new COLA of P7 l/ Granted P13 wage increase. m/ Granted P20 increase (P10 in basic pay & P10 COLA), the COLA will be integrated into the basic pay on January 1, 2014. n/ Granted P11 increase in basic pay upon effectivity & P5 COLA effective Dec. 1, 2014; integrated the P15 COLA under WO No. 17 into the basic pay. o/ Integration of P10 to P14 COLA under WO No. 17, into the basic pay and granted P5 COLA effective Jan. 1 2015 and P3-P4 basic wage increase due to simplification of industry classification. p/ Granted P10 wage increase in basic pay & integrated into the basic pay P2 COLA under W.O. No. 11.. q/ Granted P18 wage increase. Source: National Wages and Productivity Commission Updated: 08 August 2014

2014 PHILIPPINES BENEFITS SUMMARY Employees are eligible for most benefits program on the first day of employment. Holidays: Seventeen (17) paid holidays (regular and special) per year as provided under Proclamation No. 655 (2014 Declared Holidays)

Vacation: Thirteen (13) vacation days, with additional 1 vacation day every year starting on 2nd year of service and convertible to cash at the end of each year. Maximum total vacation leave is 18 days. Retirement: The plan, which is 100% funded by the company calculated at one month’s base salary per year of service based on the employee’s latest basic rate upon normal retirement at age 60, death or total and permanent disability. Early retirement benefit can be available to 10 years of service equal to 50% of normal retirement benefit. Healthcare: The plan provides a comprehensive health care coverage for employees and eligible dependents through Medicard accredited hospitals and doctors nationwide. The company pays 100% of the cost of employees’ coverage while contributing 53% of the cost of dependents’ coverage. The company also maintains an onsite medical clinic manned by a company nurse per shift and a group of company doctors who reports to the clinic six days a week on specified time schedules providing free medical consultations, emergency medicines, minor and first-aid treatments and health counseling. As part of preventive health care, free vitamins are also provided to employees while on duty and all employees are required to undergo an annual medical, dental and eye check-up conducted onsite.  Dental: Free dental benefits are likewise provided with two (2) dentists alternately visiting the factory rendering unlimited dental consultations, unlimited simple tooth extractions and permanent/temporary fillings, annual oral prophylaxis, re-cementation of jacket crown inlays and

onlays, simple adjustment of dentures and emergency treatments.  Outpatient Medicine Reimbursement: The Company reimburses expenses for outpatient medicines for employees and dependents. Medicines for out-patient employee is 100% reimbursable while for dependents up to a total amount of Php2,000 per employee/year. Approval of reimbursement requires submission of prescription and official receipts.  Maternity Grant: assistance is provided to regular female employees & legal spouse of male employees: Php 3,000 for miscarriage; Php 1,500 for home delivery; Php 5,000 for normal delivery; 80%-20% for caesarian delivery (requires Philhealth hip). Leaves:  Sick Leave: Twelve (12) days per year for the first two years of service. With additional 1 sick leave every year starting on 2nd year of service. Maximum total sick leave is 15 days. All unused leave days are convertible to cash in December of each year.  Paternity Leave: All legally married male employees are eligible for 7 working days up to four (4) child birth or miscarriage of legitimate spouse to be availed within sixty (60) days from deliver / miscarriage.  Bereavement: Three (3) days in the event of death of an immediate family member which includes the employee’s children, parents, grandparents, brother, sister, spouse, and parents-in-law.  Solo Parent Leave: Seven (7) working days parental leave for solo parents certified by the DSWD

 Calamity Leave: Two (2) days leave for employees who were affected by flood, fire and typhoon (must be ed by a Government proclamation)  Magna Carta for Women: Sixty (60) calendar days leave. It is given to all female employees who underwent surgery caused by gynecological disorders and who have rendered at least six (6) months continuous aggregate employment service for the last twelve (12) months prior to surgery. DISABILITY/LIFE INSURANCE: Employee life insurance is 100% funded by the Company, provides insurance benefits to the employee’s designated beneficiaries in the event of disability, terminal/critical illness and death due to illness or accident. The amount of benefits is specified below:  Life Insurance Benefit Limit - 26 x monthly base salary base on the employee’s latest basic rate.  Accident, Death and Disability Benefit Limit - 13 x monthly base salary based on the employee’s latest basic rate.  Total Permanent Disability Benefit Limit - 26 x monthly base salary based on the employee’s latest basic rate.  Terminal Illness Benefit Limit – 50% of Life, maximum of Php 3.5M  Critical Illness Benefit – 60% of Life, maximum of Php 1M OTHER BENEFITS:  13th month: The Company grants a 13th month pay equivalent to one (1) month’s pay to all eligible associates every November of each year. Associates with at least one (1) year of service as

of November 20th shall receive a full bonus equivalent to one (1) month’s basic monthly salary while those less than one (1) year of service shall receive a pro-rated bonus provided they have worked for 1 month.  Mid-year Bonus: The company grants bonus equivalent to a half month pay. All probationary and regular employees are eligible to this bonus.  Rice Allowance: The Company shall provide rice subsidy to all eligible associates in cash which shall be incorporated in the payroll, tax-free, every month.  Meal Subsidy: The Company provides its associates with a meal subsidy to partially cover for meals every day that the associate reports for work and to alleviate his daily expenses. An employee must have rendered the minimum number of hours per day to get a full or half-meal credit.  Tuition Fee Subsidy: All employees are eligible upon hire. Amount of subsidy: P 2,500 given in April of each year.  Employee’s Educational Assistance Program: Provides reimbursement of duly approved educational expenses upon satisfactory completion of the course and provided that the degree or course taken is relevant to the employee’s present or prospective job assignment. Maximum reimbursement per term is P 10,000. All regular employees are eligible to this benefit.  Kapwa Tulong Program: Cash assistance provided to an employee in cases of death of

immediate dependents or calamity. The company matches the contribution of employees thru the Kapwa Tulong Program which is istered through salary deduction.  Attendance Bonus: A bonus equivalent to one day pay given to all Regular and Probationary Employees who are Job Grade 8 & below, and all Technicians. Associates must have perfect attendance in one (1) month with no tardiness, undertime or unexcused absence.  Prolong Sickness (PSL) Benefits: It is given to all employees with at least six months of service. Purpose of this benefit is to provide regular employees with salary protection during recuperation period from certain medical conditions. The condition may include but not limited to; o Chronic ailments requiring at least one month of treatment whether through hospitalization or outpatient basis. o Major Operative procedures such as, but not limited to, general and specialized surgeries, and major gynecological operation. Obstetrical surgical procedures such as caesarian section are not included under this benefit. o Post-injury conditions which warrant long recuperation period.  Loyalty Token – Employees are recognized for their loyal and dedicated service to the company for every five years of continuous service by the way of gift check or token, plus plaque of appreciation during the service award ceremony.

Mandatory Employee Benefits - Philippines Employee Benefits, Incentives, Coverage, and Contributions The Philippine Social Security System consists of the following bodies: 

Social Security System (SSS) - The SSS was created to provide private

employees and their families with protection against disability, sickness, old age, and death. The Government Service Insurance System (GSIS) is an equivalent system for Philippine government employees. 

Home Development Mutual Fund (HDMF) - The HMDF is a provident

savings system providing housing loans to private and Philippine government employees, and to self-employed persons who elect to the Fund. 

Philippine Health Insurance Corporation (PhilHealth) - PhilHealth is

istered by the Philippine National Health Corporation, which is designed to provide employees with a practical means of paying for adequate medical care in the Philippines.

Coverage in the Philippines All persons under the age of 60 who earn income from employment of more than P1,000 per month are required to contribute to the SSS. Government employees are required to contribute to the equivalent GSIS. Employees are also required to contribute to the HDMF and PhilHealth. hip is optional, however, for self-employed persons. Foreign personnel are also required to make contributions. Opting out is not possible, except in limited circumstances under some of the Philippines' international social security agreements. In practice, however, the potential savings involved are generally insufficient to justify the efforts required to effect the exemption.

Contributions in the Philippines Employee contributions for social security are deducted from employee's salary payments. These are withheld by the employer on a monthly basis. Employers in the Philippines are also required to make contributions. SSS contributions are roughly 180% of the employee contributions, with the maximum employer contribution of P1,090 per month. HDMF and Philhealth contribution by employers in the Philippines are

roughly the same with the maximum for 2008 set at P100 for HDMF and P437.50 for PhilHealth monthly (for Philhealth, effectivity is from January to December 2013 only).

C. Basis The basis of the minimum wage rates prescribed by law shall be the normal working hours of eight (8) hours a day. D. Monthly-Paid Employees and Daily-Paid Employees Monthly-paid employees are those who are paid everyday of the month, including unworked rest days, special days, and regular holidays. Factor 365 days in a year is used in determining the equivalent monthly salary of monthly-paid employees. Daily-paid employees are those who are paid on the days they actually worked and on unworked regular holidays. Computation of the Estimated Equivalent Monthly Rate (EEMR) of Monthly-Paid and Daily-Paid Employees For monthly-paid employees: Factor 365 days in a year is used in determining the equivalent annual and monthly salary of monthly-paid employees. To compute their Estimated Equivalent Monthly Rate (EEMR), the procedure is as follows: Applicable Daily Rate (ADR) x 365 = EEMR 12 months Where 365 days/year = 298 ordinary working days 52 rest days 12 regular holidays 3 special days 365 Total equivalent no. of days/year For daily-paid employees: The following factors and formula may be used in computing the EEMR

of different groups of daily-paid employees for purposes of entitlement to minimum wages and allied benefits under existing laws: 1. For those who are required to work everyday, including Sundays or rest days, special days and regular holidays 6 Applicable Daily Rate (ADR) x 393.5 = EEMR 12 months Where 393.50 days/year = 298 ordinary working days 24 regular holidays x 200% 67.60 52 rest days x 130% 3.9 3 special days x 130% 393.50 Total equivalent no. days/year 2. For those who do not work and are not considered paid on Sundays or rest days Applicable Daily Rate (ADR) x 313 = EEMR 12 months Where 313 days/year = 298 ordinary working days 12 regular holidays 3 special days (if considered paid; if actually worked, this is equivalent to 3.9 days) 313 Total equivalent no. of days/yeara 3. For those who do not work and are not considered paid on Saturdays and Sundays or rest days Applicable Daily Rate (ADR) x 261 = EEMR 12 months

Where 261 days/year = 246 ordinary working days 12 regular holidays 3 special days (if considered paid; if actually worked, this is equivalent to 3.9 days) 261 Total equivalent no. of days/yearb

Without prejudice to existing company policies, practices and/or agreements, the above formula are merely suggestions and may be used as guides in determining the equivalent monthly minimum wage rates.

a Factor 310 may be used instead of 313 if the 3 special days are not considered paid b Factor 258 may be used instead of 261 if the 3 special days are not considered paid 7 E. Minimum Wage and Rights of Kasambahay The minimum wage of Kasambahay shall not be less than the following: a) Two thousand five hundred pesos (P2,500.00) a month for those employed in the National Capital Region (NCR); b) Two thousand pesos (P2,000.00) a month for those employed in chartered cities and municipalities; and c) One thousand five hundred pesos (P1,500.00) a month for those employed in other municipalities. After one year from the effectivity of the Batas Kasambahay and periodically thereafter, the Regional Tripartite Wages and Productivity Boards (RTWPBs) shall review and if proper, determine and adjust the minimum wage rates of Kasambahay. The RTWPBs shall conduct

consultations/hearings with stakeholders prior to the issuance of a wage order. Rights and Benefits of Kasambahay: 1. Minimum wage; 2. Other mandatory benefits, such as the daily and weekly rest Periods; 3. Service Incentive Leave; 4. 13th month pay; 5. Freedom from employers’ interference in the disposal of wages; 6. Coverage under the SSS, PhilHealth and Pag-IBIG laws; 7. Standard of treatment; 8. Board, lodging and medical attendance; 9. Right to privacy; 10. Access to outside communication; 11. Access to education and training; 12. Right to form, , or assist labor organization; 13. Right to be provided a copy of the employment contract; 14. Right to certificate of employment; 15. Right to terminate the employment; and 16. Right to exercise their own religious beliefs and cultural practices. F. Effect of Reduction of Workdays on Wages In situations where the employer has to reduce the number of regular working days to prevent serious losses, such as when there is a 8 substantial slump in the demand for his/her 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 without prejudice to an agreement or company policy which provides otherwise. G. Penalty and Double Indemnity for Violation of the Prescribed Increases or Adjustments in the Wage Rates (RA 8188) Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates made in accordance with RA 6727, shall be punished by a fine of not less than Twenty-five Thousand Pesos (P25,000.00) nor more than One Hundred Thousand Pesos (P100,000.00) or imprisonment of not less than two (2) years nor more than four (4) years, or both such fine and imprisonment at the discretion of the court: Provided, That any person convicted hereof shall not be entitled to the benefits provided for under the Probation Law. The employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits owing to the employees: Provided, That payment of indemnity shall not absolve the employer from the criminal liability imposable hereof. If the violation is committed by a corporation, trust, firm, partnership, association or any other entity, the penalty of imprisonment shall be imposed upon the entity’s responsible officers, including, but not limited to, the president, vice-president, chief executive officer, general manager, managing director or partner. H. Barangay Micro Business Enterprises (BMBEs) BMBEs or business enterprises engaged in the production, processing or manufacturing of products or commodities including agro-processing,

trading and services whose total assets, excluding the land on which the particular business entity’s office, plant and equipment are situated, are not more than Three Million Pesos (P3,000,000) shall be exempt from the coverage of the Minimum Wage Law: Provided, that all employees shall still be entitled to the same benefits given to regular employees such as social security and healthcare benefits. 9 To avail of the benefits, the BMBE should with the city or municipality having jurisdiction over the same and must secure a Certificate of Authority authorizing them to operate as such. The BMBE workers and owners shall agree on the acceptable wage rates based on the wage advisories issued by the RTWPBs. I. Minimum Wage of Workers Paid by Results All workers paid by results, including homeworkers and those who are paid on piece rate, takay, pakyaw or task basis, shall receive not less than the prescribed minimum wage rates under the Regional Wage Orders for normal working hours which shall not exceed eight (8) hours a day, or a proportion thereof. The wage rates of workers who are paid by results may be determined through time and motion studies or consultation with representatives of employers’ and workers’ organizations in a tripartite called by the DOLE Secretary. J. Minimum Wage of Apprentices, Learners, and Persons with disability Wage of apprentices and learners shall in no case be less than seventyfive (75%) percent of the applicable minimum wage rates. Apprentices and learners are those who are covered by apprenticeship and learnership agreements duly approved by the Technical Education and

Skills Development Authority (TESDA). A qualified disabled employee shall be subject to the same and conditions of employment and the same compensation, privileges, benefits, fringe benefits or allowances as a qualified able bodied person (Sec. 1 of RA 10524 or the Magna Carta for Persons with disability.

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