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required to remit or send a portion of their income to their families, dependents, and/or
beneficiaries in the Philippines.[8]
Regulation on conditions of employment[edit]
Minimum wage rate[edit]
Minimum wage rates in the Philippines vary from region to region, with boards established
for each region to monitor economic activity and adjust minimum wages based on growth
rates, unemployment rates, and other factors.[9] The minimum wage rate for Non-Agriculture
employees, in Manila region, established under Wage Order No. NCR 15 is P404 per day, but
in May 9, 2011, a (cost of living allowance) of P22 per day was added to P404 wage, making
the minimum wage P426 as of the current date. COLA was also added to the previous P367
minimum wage for the following sectors: Agriculture, Private Hospitals (with bed capacity of
100 or less), and manufacturing establishments (with less than 10 workers), leaving the
sectors with P389 as minimum wage.[10] The 426 combined rate is locally referred to in the
Philippines as "Manila Rate" due to this regional disparity.[2]
Regular work hours and rest periods[edit]
Normal hours of work. - The normal hours of work of any employee shall not exceed eight (8)
hours a day.
Health personnel in cities and municipalities with a population of at least one million
(1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall
hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time
for meals, except where the exigencies of the service require that such personnel work for
six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional
compensation of at least thirty percent (30%) of their regular wage for work on the sixth day.
For purposes of this Article, "health personnel" shall include resident physicians, nurses,
nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical
technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.
Meal periods. - Subject to such regulations as the Secretary of Labor may prescribe, it shall
be the duty of every employer to give his employees not less than sixty (60) minutes timeoff for their regular meals.
Rest days[edit]
All employees have the right to have a 24 consecutive hours of rest day after every 6 days
of work. Employers are responsible for determining and scheduling the rest day of
employees except only if the employee prefers a different day based on religious grounds.
However, the employer may require an employee to work during his/her rest day in cases of
emergencies, special circumstances at work in which employees are seriously needed, to
prevent losses or damage to any goods or to the employer, and other cases that have
reasonable grounds.[8]
Employers' confederation[edit]
In the Philippines, there is also an employers' confederation in order to lobby the protection
of firm owners; this confederation represents the business sector and employers in the
country. The most known of which is the Employers' Confederation of the Philippines. ECOP
is leading in being the voice of the employers' in labor management and socioeconomic
development.[16] Last September 27, 2011, ECOP had a dialogue with Labor
secretary, Rosalinda Baldoz regarding different issues on labor like the Pregnant Women
Workers Act, impact of too many holidays on business, wages, ongoing review of DOLE
Department Order No. 18-02, and employment and competitiveness. ECOP stressed that
DOLE should consider the business community when issuing policies. [17]
Computation of Wages
The salaries and wages of your employees depend on whether you pay them on a monthly
or daily basis.
Monthly-paid employees are those whom you pay every day of the month, including
unworked rest days, special days and regular holidays.
Daily-paid employees are those whom you pay for days actually worked and on unworked
regular holidays.
The EMR (equivalent monthly rate) of your employees is computed as follows:
Monthly Paid Employees
The formula for the EMR of monthly paid employees is:
EMR = (Applicable Daily Rate x 365)/12
The factor of 365 days consists of: 302 ordinary working days, 51 rest days, 10 regular
holidays, and 2 special days.
Daily-paid employees:
The EMR of daily-paid employees depends on whether they are required to work on rest days
and holidays.
The EMR of employees who are required to work every day including Sundays or rest
days, special days and regular holidays is:
EMR = (Applicable Daily Rate x 391.50)/12
The factor of 391.5 days consists of: 302 ordinary working days, 20.60 (9 regular holidays x
200% plus one regular holiday/Sunday*260%), 66.3 (51 rest days x 130%), 2.6 (2 special
days x 130%).
The EMR of employees who do not work and are not considered paid on Sundays or
rest daysis:
Holiday
January 1
Movable Date
Movable Date
April 9
May 1
June 12
Your employees who work on a regular holiday (for work within 8 hours) are entitled to twice
(200%) their basic wage.
Where the holiday falls on their scheduled rest day, they are entitled to an additional 30% of
the employees regular holiday rate of 200% or a total of at least 260%.
All covered employees are entitled to holiday pay when they are on leave of absence with
pay. Those who are on leave of absence without pay on the day immediately preceding a
regular holiday may not be paid the required holiday pay if they do not work during the
regular holiday.
National Special Days
There are two national special days: All Saints Day on November 1 and Last Day of the Year,
December 31. During these days, the principle of no work, no pay applies. Workers who
were not required or permitted to work on those days are not entitled to any compensation.
This is without prejudice to any voluntary practice or provision in the Collective Bargaining
Agreement (CBA) providing for payment of wages and other benefits for days declared as
special days.
Employees who work on special days are entitled to additional compensation of not less than
30% on top of the basic pay or a total of 130%. If the special day is also the persons rest
day, he is entitled to at least 50% over and above the basic pay or a total of 150%.
Muslim Holidays
There are five (5) recognized Muslim holidays, namely:
a. Amun Jadid (New Year), which falls on the first day of the lunar month of Muharram
b. Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls on the twelfth day
of the third lunar month of Rabiul- Awwal
c. Lailatul Isra Wal Mi Raj (Nocturnal Journey and Ascension of the Prophet Muhammad),
which falls on the twenty-seventh day of the seventh lunar month of Rajab
d. Id-ul-Fitr (Hari Raya Pausa), which falls on the first day of the tenth lunar month of
Shawwal commemorating the end of the fasting season
e. Id-ul-Adha ( Hari Raha Haji), which falls on the tenth day of the twelfth lunar month of
Dhul-Hijja.
If your business is located in the provinces of Basilan, Lanao del Norte, Lanao del Sur,
Maguindanao, North Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zambaonga del Norte and
Zamboanga del Sur and in the cities of Cotabato, Iligan, Marawi, Pagadian and Zamboanga,
you need to pay your employees holiday pay.
Premium Pay
You need to pay your employees premium pay or additional compensation if you require
them to perform work on nonworking days, such as rest days and special days.
The current premium pay rates are as follows:
Work
Premium
Rate
(of daily
rate)
Total
Rate
30%
130%
50%
130%
30% of
200%
260%
You may opt not to pay your managerial employees, workers paid by results or field
personnel the above premium pay.
Overtime Pay
If you require your employees to perform work beyond eight (8) hours a day, you need to
pay them additional compensation as follows:
Work
Overtime
Rate
30%
Pay
Ordinary day
10%
110%
Ordinary day
10% of 125%
If you employ not more than five workers and you are a retail or a service establishment,
you need not pay night shift differential. You also do not need to pay your managerial
employees and field personnel the NSD.
Service Incentive Leave (SIL)
If your employees have been with you already for at least one (1) year, whether service is
continuous or broken, you need to pay them Service Incentive Leave (SIL) equivalent to five
days. The SIL may be used for sick and vacation leave purposes. If the SIL is not used up
within the year, you may commute or pay its money equivalent at the end of the year. In
computing the 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.
You need not grant SIL if your employees are already enjoying this benefit such as when
they are already given a vacation leave of at least five days.
You also need not accord SIL to your managerial employees and field personnel. If you are
employing less than ten employees, you need not also pay them SIL.
Service Charges
If you are a service establishment, such as hotels, restaurants and night clubs, you may
charge an additional 10% to your customers bill for distribution to employees.
If you collect service charges, your employees are entitled to an equal share in the 85% of
the total of such charges, except managerial employees. You may retain the remaining 15%
to answer for losses and breakages and for distribution to managerial employees, at your
discretion.
You must distribute the shares of the employee in the service charges no less than once
every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.
If you stop collecting service charges, you are required to provide and integrate into the
basic wage of your employees, the average share previously enjoyed by them for the past
twelve (12) months immediately preceding such stoppage.
Tips
If you do not collect service charges but practice the pooling of tips given voluntarily by your
customers to your employees, you should ensure that the pooled tips are monitored,
accounted and distributed in the same manner as the service charges.
13th Month Pay
You also need to pay your rank and file employees 13th month pay no later than December
24 of every year. One half (1/2) of the required 13th month pay may be made before the
opening of the regular school year and the other half on or before the 24th of December of
every year. The minimum 13th month pay is not less than 1/12 of the total basic salary
Maternity benefits, like other benefits granted by the SSS, are granted to employees in lieu
of wages and is not included in computing the employees 13th month pay.
Paternity Leave under Republic Act No. 8187
You are also required to grant paternity leave or time off from work to all your married male
employees, regardless of employment status, (e.g. probationary, regular, contractual,
project basis) to allow them to lend support to their wives during the period of recovery
and/or in the nursing of their newborn child.
The paternity leave consists of seven (7) days with full pay for the first four deliveries of the
employees lawful wife. Availment of the paternity leave may be after the delivery, without
prejudice to an employers policy of allowing the employee to avail of the benefit before or
during the delivery, provided that the total number of days shall not be more than seven (7)
days for each covered delivery.
For more information on SSS registration and benefits, you may visit www.sss.gov.ph.
Tax Compliance
You must also ensure that you are withholding the proper taxes due on the compensation,
benefits and other taxable emoluments paid to all your employees.
For more information on tax requirements and compliance standards