What You Need To Know
For more information on the minimum wage rate per Region, please visit National Wages and Productivity Commission website to view wage orders per region.
The current daily minimum wage for employees in the National Capital Region (NCR) is PhP404.00, per Wage Order No. NCR-15 granting a wage increase of PhP20.00 per day effective 01 July 2010.
Premium Pay refers to the additional compensation required by law for work performed within eight (8) hours on non-working days, such as rest days and special days.
Special Days (e.g. Special (Non-Working) Holiday)
During special days, the principle of "no work, no pay" applies and on such other special days as may be proclaimed by the President or by the Congress.
Workers who were not required or permitted to work on those days are not by law entitled to any compensation. This, however, 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 even if unworked.
Under Executive Order No. 292 as amended by Republic Act No. 9849 unless otherwise modified by law,order or proclamation, the following are the special days in a year under that shall be observed in the country:
- Ninoy Aquino Day Monday Nearest Aug. 21
- All Saints Day November 1
- Last Day of the year December 31
Holiday Pay refers to the payment of the regular daily wage for any unworked regular holiday.
Every employee covered by the holiday pay rule is entitled to his daily wage for any unworked regular holiday. This means that the employee is entitled to at least 100% of his wage even if he did not report for work, provided he is present or is on leave of absence with pay on the work day immediately preceding the holiday.
Under Executive Order No. 292, as amended by RA 9849: unless otherwise modified by law, order or proclamation, the following are the regular holidays in a year:
- New Year's Day January 1
- Maundy Thursday Movable date
- Good Friday Movable date
- Araw ng Kagitingan Monday nearest April 9
- Labor Day Monday nearest May 1
- Independence Day Monday nearest June 12
- National Heroes Day last Monday of August
- Eid ul Fi'tr Movable date
- Eid ul Adha Movable date
- Bonifacio Day Monday nearest November 30
- Christmas Day December 25
- Rizal Day Monday nearest December 30
Overtime Pay refers to the additional compensation for work performed beyond eight (8) hours a day.
Night Shift Differential
Night Shift Differential refers to the additional compensation of ten percent (10%) of an employee's regular wage for each hour of work performed between 10:00PM and 6:00AM.
13th Month Pay
All employers are required to pay their rank and file employees regardless of the nature of their employment and irrespective of the method by which their wages are paid provided they worked for at least one (1) month during a calendar year. 13th Month Pay should be given to the employees not later than December 24 of every year.
Computation of Wages
Computation of wages is governed by the following rules:
On Ordinary Days
Plus 25% of the hourly rate multiplied by the number of hours.
On a rest day, special day or regular holiday
Plus 30% of the hourly rate on said days multiplied by the number of hours.
Computing pay for work done on:
A special day (a total of 130% x basic pay)
A special day, which is also a scheduled rest day (a total of 150% x basic pay)
A regular holiday (a total of 200% x basic pay)
A regular holiday, which is also a scheduled rest day (a total of 260% x basic pay)
Computing Night Shift Premium Where Night Shift is a Regular Work:
On Ordinary day (110% x basic hourly rate)
On a rest day, special day, regular holiday (110% of regular hourly rate for a rest day, special day, regular holiday)
Computing Overtime on Night Shift:
On ordinary day (110% x overtime hourly rate)
On rest day, special day or regular holiday (110% x overtime hourly rate for rest days, special days, regular holidays)
Computing 13th Month Pay:
Total basic salary earned for the year exclusive of allowances, overtime, holiday, premium and night shift differential pay divided by 12 months = 13th month pay.
Employees of employers collecting service charges are entitled to an equal share in the 85% of the total of such charges, except managerial employees. The remaining 15% of the charges may be retained by the management to answer for losses and breakages and for distribution to managerial employees, at the discretion of the management in the latter case. Service charges are collected by most hotels and some restaurants, night clubs, cocktail lounges, among others.
Service Incentive Leave
Every employee who has rendered at least one (1) year of service is entitled to a yearly service incentive leave of five (5) days with pay.
This benefit does not apply to the following:
* government employees
* house helpers and persons in the personal service of another
* managerial employees
* field personnel and those whose time and performance is unsupervised by the employer
* those already enjoying this benefit
* those enjoying vacation leave with pay of at least five (5) days
* those employed in establishments regularly employing less than ten (10) employees
Meaning of "one year of service"
The phrase "one year of service" of the employee means service within 12 months, whether continuous or broken, reckoned from the date the employee started working. The period includes authorized absences unworked weekly rest days, and paid regular holidays. Where by individual or collective agreement, practice or policy, the period of working days is less than 12 months, said period shall be considered as one year for the purpose of determining entitlement to the service incentive leave.
Availment/Commutation to Cash
The service incentive leave may be used for sick and vacation leave purposes. The unused service incentive leave is commutable to its monetary equivalent at the end of the year. In computing, 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.
Paternity Leave (RA 8187)
Paternity Leave is granted to all married male employees in the private sector, regardless of employment status, (e. g. probationary, regular, contractual, project-based) the purpose of which is to allow the husband to lend support to his wife during her period of recovery and/or in the nursing of her newborn child.
The paternity leave shall be for seven (7) calendar days, with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if any, provided that his pay shall not be less than the mandated minimum wage.
Availment of the paternity leave shall be after the delivery, without prejudice to an employer's 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.
Maternity Leave (RA 8282)
Every pregnant woman in the private sector, whether married or unmarried, is entitled to maternity leave of sixty (60) days in case of normal delivery, or miscarriage, or seventy-eight (78) days in case of caesarian section delivery, with benefits equivalent to 100% of the average daily salary credit of the employee as defined under the Social Security Law.
Parental Leave for Solo Parents (RA 8972)
Parental leave for solo parents is granted to any solo parent or individual who is left alone with the responsibility of parenthood to enable him/her to perform parental duties and responsibilities where physical presence is required.
The parental leave in addition to leave privileges under existing laws, shall be for seven (7) work days every year, with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if any, provided that his/her pay shall not be less than the mandated minimum wage.
Emergency and contingency leave provided under a company policy or a collective bargaining agreement shall not be credited as compliance with the parental leave.
Leave for Victims of Violence Against Women and Their Children (VAWC) (RA 9762)
VAWC leave is granted to private sector women employees who are victims as defined in the law. The leave benefit shall cover the days that the women employee has to attend to medical and legal concerns.
In addition to other paid leaves under existing labor laws, company policy, and/or collective bargaining agreement, the qualified victim employee shall be entitled to a leave of up to ten (10) days with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if any.
Special Leave for Women (RA 9710)
A women employee, who has rendered continuous aggregate eployment service of at least 6 months for the last 12 months, is entitled to a special leave benefit of 2 months with full pay based on her gross monthly compensation following surgery caused by gynecological disorders.
Separation pay is given to employees in instances covered by Articles 283 and 284 of the Labor Code. An employee's entitlement to separation pay depends on the reason or ground for the termination of his services. An employee may be terminated for just cause (i.e. gross and habitual neglect of duty, fraud or commission of a crime) and other similar causes as enumerated under Article 282 of the Labor Code and generally, may not be entitled to separation pay.
On the other hand, where the termination is for authorized causes, separation pay is due.
Retirment pay is given to employees if they have reached the age of sixty (60) years or more but not beyond sixty-five (65) years old and have served the establishment for at least five (5) years. This retirement benefit is separate and distinct from that granted by the Social Security System.
Date Last Reviewed: 2009-12-21 12:00:18