[COMPILATION] Statutory Monetary Benefits

From St. Ven's notes

Minimum Wage

• R.A. 6727 “Wage Rationalization Act“

• Basis for wage classification:

  • Agriculture

  • Retail Establishment

  • Service Establishment

Agriculture

BASIS FOR WAGE CLASSIFICATION

Farming in all its branches

Retail Establishment

BASIS FOR WAGE CLASSIFICATION

• Principally engaged in the sale of goods to end-users

• Regularly engages in wholesale activities loses its retail character

Service Establishment

BASIS FOR WAGE CLASSIFICATION

Principally engaged in the sale of service to individuals

Regional Tripartite Wages and Productivity Boards (RTWPBs)

Authorized to determine the daily minimum wages in different regions based on established criteria

Regional Wage Orders

• Prescribe daily minimum wage rates per industry per locality within the region

• Depends on the number of workers and the capitalization of enterprises

• Provide bases and procedures for application for exemption from compliance

Minimum Wage’s Coverage

• Wage increases apply to:

  • Private sector workers receiving daily minimum wage rates or those receiving up to a certain daily wage ceiling

  • EXCEPT: workers of Barangay Micro Business Enterprises (BMBEs) with Certificate of Authority

• An establishment may be exempted from compliance with a Wage Order for at most 1 year

Rules in Determining Compensable Working Hours

Basis of minimum wage is normal working hours of 8 hours a day

• Hours worked

• Principles in determining hours worked

• Treatment on waiting time

• Attendance at lectures, meetings, training programs, etc.

• Meal and Rest Periods

Hours Worked

RULES IN DETERMINING COMPENSABLE WORKING HOURS

All time during which an employee is required to be on duty or is permitted to work

Principles in Determining Hours Worked

RULES IN DETERMINING COMPENSABLE WORKING HOURS

• All hours are hours worked regardless of whether or not the hours are spent in productive labor or involve physical or mental exertion

• Rest period is considered when the employee stops working. The employee does not need to leave the premises during rest period

• The work performed was necessary, benefited the employer, or employee could not abandon his work at the end of his normal working hours due to no replacement; the hours spent is considered work hours, provided that is is upon the knowledge of the employer

• Time during which an employee is inactive due to interruptions in their work beyond their control shall be considered working time

Treatment on Waiting Time

RULES IN DETERMINING COMPENSABLE WORKING HOURS

• Waiting time = working time if employee is obligated to wait as part of their work or as tasked by the employer

• Being on call is considered working

Attendance at Lectures, Meetings, Training Programs, etc.

RULES IN DETERMINING COMPENSABLE WORKING HOURS

• Attendance in such activities is not counted as working time if all conditions are met:

  • Attendance is outside employee’s regular working hours

  • Attendance is voluntary

  • Employee does not perform productive work during attendance

Meal and Rest Periods (Rules in Determining Compensable Working Hours)

RULES IN DETERMINING COMPENSABLE WORKING HOURS

• Employees are entitled to not less than 1 hour time-off for regular meals except:

  • Work is non-manual work or does not involve strenuous physical exertion

  • The establishment regularly operates more than 16 hours a day

  • In case of emergencies or urgent work to be performed on machineries to avoid serious loss

  • The work is necessary to prevent serious loss of perishable goods

• Employees falling onto the aforementioned conditions can be given at least 20-minute meal period, provided that the shorter meal period is credited as compensable hours worked

• Rest periods of 5 to 20 minutes are considered as compensable working time

Monthly-Paid

• Paid every day of the month

• Including unworked rest days, special days, and regular holidays

• 365 days in a year is used in determining the equivalent monthly salary

Daily-Paid

Paid on the days they actually worked and on unworked regular holidays

• Monthly-paid

  • Factor 365 days in a year is used in determining annual and monthly salary

• Daily-paid

  • For those who are required to work everyday, including Sundays or rest days, special days, and regular holidays

• Daily-paid

  • For those who do not work and are not considered paid on Sundays or rest days

• Daily-paid

  • For those who do not work and are not considered paid on Saturdays and Sundays or rest days

Subsidized Meals and Snacks

• Employer may provide subsidized meals and snacks to employees

• Subsidy must be at least 30% of the fair and reasonable value of the facilities

• Employer may deduct at most 70% of the value of the meals and snacks enjoyed by employees

Wage of Kasambahay Working as Sales Clerk

Receive wage in accordance with the prescribed minimum wage applicable in retail and service establishments under existing Wage Orders

Effect of Reduction of Workdays on Wages

• In reducing regular working days to prevent losses, employers may deduct wages corresponding to days taken off from the workweek

• Consistent with “No Work, No Pay“

Penalty for Violation of Prescribed Adjustments in Wage Rates

• Fine of ₱25,000 to ₱100,000

• Imprisonment of 2 to 4 years

• Employer is ordered to pay double the unpaid benefits owed to employees

Barangay Micro Business Enterprises (BMBEs)

• Business enterprises engaged in the production, processing, or manufacturing of products or commodities

• Total assets, excluding land, are less than ₱3 million are not covered by the Minimum Wage Law

• All employees are still entitled to benefits such as SSS and PhilHealth

• BMBE workers and owners shall agree on the acceptable wage rates

Wage of Workers Paid by Results

• They receive at least prescribed minimum wage for the normal working hours not exceeding 8 hours a day

• It could be a proportion for work less than normal working hours

Wage of Apprentices, Learners and Persons with Disability

• Wage of apprentices and learners = at least 75% of minimum wage rates

• Apprentices and learners should be those covered by Technical Education and Skills Development Authority (TESDA)

• PWDs are entitled to be the same terms and compensation as a qualified able-bodied person

Annual Establishment Report on Wages

All private establishments are required to submit an annual report on a verified itemized listing of their labor component and corresponding salaries and wages

Coverage from Income Tax

• Income payments are exempted from the requirement of withholding tax on compensation:

  • For minimum wage earners (MWEs) who work in the private sector and being paid the statutory minimum wage

    • Holiday pay, overtime pay, night shift differential pay, and hazard pay earned by MWE is covered by tax exemption

    • Hazard pay

      • Amount paid to MWE’s who are exposed to great danger

• Annual salary does not exceed ₱250,000

Hazard Pay

Amount paid to MWE’s who are exposed to great danger

Holiday Pay

Payment of the regular daily wage for any unworked regular holiday

Holiday Pay’s Coverage

Applies to all employees, except:

• Government employees

• Retail and service establishments employing less than 10 workers

• Kasambahay

• Managerial employees who follow all criteria:

  • Primary duty is to manage the establishment

  • Direct the work of two or more employees

  • Have the authority to hire or fire; suggestion towards the career status of employees have particular weight

• Officers or members of a managerial staff if they perform the following:

  • Perform work directly related to management policies of employer

  • Exercise discretion and independent judgement

  • Assist a proprietor or managerial employee in the management of establishment, work along technical lines that require training, experience, or knowledge, and execute special assignments/tasks

  • Do not devote more than 20% of hours worked in a workweek towards aforementioned activities

• Field personnel whose time and performance is unsupervised by the employer

Regular Holidays

Holidays mandated by law

Holiday Pay Rates

• Entitled to 100% of minimum wage even if unworked

• Worked performed = 200%

• Holiday falling on rest day = 260% (30% from holiday, 30% from the rest day)

• Two regular holidays (unworked) = 200%

• Two regular holidays (worked) = 300%

• Two regular holidays falling on the rest day (worked) = 390% (30% from each holiday, 30% from rest day)

• When regular holiday falls on a Sunday, the following Monday is not considered a holiday, unless it is declared a special day

Absences

• Employees on leave of absence with pay on workday before the regular holiday is entitled to holiday

• Employees on leave of absence without pay on workday before regular holiday may not be paid holiday pay unless they work on that day

• If non-work day or rest day precedes holiday

  • Employee is entitled to holiday pay provided that they worked on the day before the non-working day or rest day

Successive Regular Holidays

• If absent the day before the first holiday → not entitled for two holiday pays

• If absent employee works during the first holiday → entitled to holiday pay for second holiday

Temporary or Periodic Shutdown of Work

Regular holidays falling within temporary cessation of work (e.g., yearly inventory or maintenance) will be compensated

Holiday Pay of Certain Employees

• Employee paid via piece-rate basis

• Seasonal workers

• Workers who do not have regular working days

Employee Paid via Piece-Rate Basis

HOLIDAY PAY OF CERTAIN EMPLOYEES

• Holiday pay is at least equal to average daily earning for the past 7 workdays before the holiday

• Provided that the holiday pay is not less than the applicable statutory minimum wage rate

Seasonal Workers

HOLIDAY PAY OF CERTAIN EMPLOYEES

Not paid holiday pay during off-season

Workers who do not have regular working days

HOLIDAY PAY OF CERTAIN EMPLOYEES

Entitled to holiday pay

Premium Pay

Additional compensation for work performed within 8 hours on rest days and special days

Premium Pay’s Coverage

• All employees, except:

  • Government employees

  • Managerial employees (as mentioned in holiday pay)

  • Officers or members of a managerial staff (as mentioned in holiday pay)

  • Kasambahay

  • Workers paid by results

    • Paid on piece rate, takay, pakyaw, or task basis

    • Other non-time work

  • Field personnel (as mentioned in holiday pay)

• Note: retail and service establishments with less than 10 workers are not exempted

Special (Working) Days

• Employee is entitled to only their minimum wage

• No premium pay since work is considered ordinary workday

Premium Pay Rates

• “No work, no pay“ applies during special days

• Workers not required to work on special days are not entitled to any compensation

  • Work performed on special days merits additional compensation of at least 30% of basic wage (130%)

  • Work performed on rest day, which is also special day = 150%

  • Work on a regular holiday falling on rest day = 260%

Overtime Pay

Additional compensation for work performed beyond 8 hours a day

Overtime Pay’s Coverage

Same as those covered in Premium Pay

Overtime on Ordinary Working Days

OVERTIME PAY RATES

Hourly rate * 125% * Number of hours OT work

Overtime on Scheduled Rest Day or Special Day

OVERTIME PAY RATES

Hourly rate * 130% * Number of hours OT work

Overtime on Special Day Falling on Rest Day

OVERTIME PAY RATES

Hourly rate * 150% * 130% * Number of hours OT work

Overtime on Regular Holiday (Overtime Pay Rates)

OVERTIME PAY RATES

Hourly rate * 200% * 130% * Number of hours OT work

Overtime on Regular Holiday Falling on Rest Day (Overtime Pay Rates)

OVERTIME PAY RATES

Hourly rate * 260% * 130% * Number of hours OT work

Stipulated Overtime Rates

Premium pay for work on rest days, special days, or regular holidays is included as part of regular rate in the computation of OT

Night Shift Differential

The additional compensation of 10% of an employee’s regular wage for each hour of work performed between 10 PM and 6 AM

Night Shift Differential’s Coverage

All employees, except:

• Government employees

• Retail and service establishments with at most 5 workers

• Kasambahay

• Managerial employees

• Officers or members of a managerial staff

• Field personnel

Night Shift Differential Rate

Varies according to the day the night shift work is performed

Service Charges

Amount collected by hotels and restaurants that is added to the bills for work or services rendered

Service Charges’ Coverage

All employees, except managerial employees under direct employ of the establishments

Distribution of Service Charges

• All service charges shall be distributed completely and equally, based on actual hours or days of service rendered, among the covered employees

• Includes those already receiving the benefit of sharing in the service charges

Frequency of Distribution

• Once every two weeks or twice a month

  • Intervals not exceeding 16 days

Increase in Minimum Wage

In case of wage increase, service charges paid to employees shall not be considered in determining compliance with increased minimum wage

Service Incentive Leave

• Paid leave of 5 days

• Granted to employees who rendered at least 1 year of service

• May be used for sick, vacation, and other leave purposes

Service Incentive Leave’s Coverage

Applies to every employee who has rendered at least 1 year of service, except:

• Government employees

• Persons in personal service of another

• Managerial employees

• Officers or members of a managerial staff

• Field personnel

• Those already enjoying this benefit

• Those enjoying vacation leave with pay of at least 5 days

• Those employed in establishments with less than 10 employees

One Year of Service

• Service within 12 months, whether continuous or broken

• Reckoned from the day the employee started working

• Period includes absences, unworked weekly rest days, and paid regular holidays

Service Incentive Leave’s Conversion

• Employee may choose to use leave credits or convert them to their monetary equivalent if not used at the end of the year

• If employee chooses not to use or convert SIL, they are entitled upon resignation or separation to the monetary equivalent of the same

• Basis shall be the salary rate at the date of conversion

Maternity Leave

Paid leave granted to a female employee for every instance of pregnancy, miscarriage, and emergency termination of pregnancy, regardless of frequency

Maternity Leave‘s Coverage

Applies to female employees, regardless of civil status, employment status, and legitimacy of her child

Duration for Maternity Leave

• 105 days with full pay

• 120 days with full pay if solo parent

• In cases of live childbirth

  • Mothers can avail 30 days additional leave, but unpaid

• Leave may be credited as combinations of prenatal and postnatal leave as long as it does not exceed 105

• Compulsory postnatal leave → at least 60 days

• In case of miscarriage or emergency termination of pregnancy

  • Maternity leave for 60 days with full pay

Maternity Leave’s Conditions for Entitlement

Female employee must have at least 3 monthly contributions to the SSS in the 12-month period preceding the semester of childbirth, miscarriage, or emergency termination

Maternity Leave’s Frequency of Availment

Shall be granted to female employees regardless of frequency

Paternity Leave

Refers to paid leave granted to a married male employee to lend support his lawful wife during her period of recovery and/or in nursing of their newborn child, including miscarriage

Paternity Leave’s Coverage

Applies to all married male employees regardless of employment status

Duration of Paternity Leave

• Seven days leave with full pay

• Granted after delivery by wife

  • Can be granted before or during delivery, granted that he will not exceed 7 days for each delivery

• This is not convertible to cash if not availed

• If male employee is already enjoying the paternity leave benefits by reason of contract, policy, or CBA:

  • The greater paternity benefit shall prevail

  • If existing paternity leave is less than provided, it shall be adjusted to the extent of the difference

• Without contract, policy, or CBA, the paternity leave benefits in the Labor Code shall apply in full

Paternity Leave’s Conditions for Entitlement

All married male employees who meet the following:

• He is an employee at the time of delivery of the child

• Cohabiting with his spouse

  • Obligation of the husband and wife to live together

  • If not living together because of workstation or occupation, the male employee is still entitled to the paternity leave benefit

  • Applied for paternity leave with employer within a reasonable period of time from the expected date of delivery

  • His wife has given birth or suffered miscarriage

Paternity Leave’s Frequency of Availment

Apply to the first four deliveries of the employee’s lawful wife

Parental Leave for Solo Parents

Paid leave granted to a qualified solo parent

Parental Leave for Solo Parents’ Coverage

• Categories of Solo Parents:

  • Parent who provides sole parental care of the child due to:

  • Spouse or any family member of an OFW

  • Unmarried parent who keeps and rears the child

  • Any legal guardian, adoptive or foster parent

  • Any relative within the 4th civil degree of consanguinity who assumes care as a result of death, abandonment, disappearance, or absence of the parents for at least 6 months

  • Pregnant woman who provides sole parental care to unborn children

• Child or dependents

• Parental care and support

Categories of Solo Parents

• Parent who provides sole parental care of the child due to:

  • Birth as consequence of r4pe without final conviction

  • Death of spouse

  • Detention of spouse for at least 3 months or serving a sentence for a criminal conviction

  • Physical or mental incapacity of spouse as certified by a medical practitioner

  • Legal separation of de facto separation for at least 6 months

    • The solo parent is entrusted with sole parental care

  • Annulment of marriage or due to divorce

  • Abandonment by the spouse for at least 6 months

• Spouse or any family member of an OFW

  • OFW belongs to the low/semi-skilled worker category and away from the Philippines for an uninterrupted period of 12 months

• Unmarried parent who keeps and rears the child

• Any legal guardian, adoptive or foster parent

• Any relative within the 4th civil degree of consanguinity who assumes care as a result of death, abandonment, disappearance, or absence of the parents for at least 6 months

  • In cases of solo grandparents who have sole parental care over their grandchildren

    • Grandchildren who are unmarried and 22 years old or below

    • Those 22 years old or over but who are unable to fully take care or protect themselves from abuse, neglect, cruelty, exploitation

• Pregnant woman who provides sole parental care to unborn children

Parent who provides sole parental care of the child due to…

CATEGORIES OF SOLO PARENTS

• Birth as consequence of r4pe without final conviction

• Death of spouse

• Detention of spouse for at least 3 months or serving a sentence for a criminal conviction

• Physical or mental incapacity of spouse as certified by a medical practitioner

• Legal separation of de facto separation for at least 6 months

  • The solo parent is entrusted with sole parental care

• Annulment of marriage or due to divorce

• Abandonment by the spouse for at least 6 months

Spouse or any family member of an OFW

CATEGORIES OF SOLO PARENTS

OFW belongs to the low/semi-skilled worker category and away from the Philippines for an uninterrupted period of 12 months

Child or dependents

PARENTAL LEAVE FOR SOLO PARENTS’ COVERAGE

• Living with and dependent upon the solo parent

• Unmarried and 22 years old or below

• 22 years old and over who cannot fully take care of themselves due to disability

Parental care and support

Acts of providing for basic needs, health care, mental and physical safety, emotional support and formation of the personality of the child

Parental Leave for Solo Parents’ Duration

• Forfeitable and noncumulative parental leave of not more than 7 working days with pay every year

• Granted to solo parents who have rendered service at least 6 months

• Solo parent shall not lose their status if the other parent provides occasional assistance and/or seasonal gifts

• Is not considered a solo parent when parental care and support are equally shared between a separated mother and father

• If parental leave is not availed, it is not convertible to cash unless previously agreed upon by employer and employee

• Greater benefit shall prevail if there is an existing or similar benefit under a policy or CBA

• Emergency or contingency leave provided under a company policy or CBA shall not be credited as compliance with the parental leave for under the Labor Code

Parental Leave for Solo Parents’ Conditions for Entitlement

A solo parent must

• Have rendered at least 6 months of service, whether continuous or broken

• Have notified their employer of the availment within a reasonable time

• Have presented a valid Solo Parent Identification Card (SPIC)

Parental Leave for Solo Parents’ Frequency of Availment

• Leave of 7 days with full pay shall be granted every year

• When a solo parent ceases to be such by reason of change of status and circumstances, they will become ineligible for the benefits

Leave for VAWC

Paid leave granted to a female employee who is a victim of VAWC

Leave for VAWC’s Coverage

• Applies to all female employees who are victims of VAWC

• VAWC

  • Any act or series of acts committed by any person against:

    • A woman who is his wife, former wife

    • Against a woman with whom they have a s3xual or dating relationship

    • With whom they have a common child

    • Against their child regardless of legitimacy, with or without family abode

  • Results in physical, sexual, psychological harm, economic abuse

Leave for VAWC’s Duration

• In addition to other paid leaves, the qualified employee shall be entitled to 10 days leave with full pay

• Leave shall be extended when the need arises, as specified in the protection order issued by the barangay or the court

Leave for VAWC’S Conditions for Entitlement

Victim-employee must present her certification from the barangay chairman, barangay councilor, prosecutor, or Clerk of Court, than an action relative to VAWC is pending

Leave for VAWC’S Frequency of Availment

• Usage is at the option of the woman employee

• If not availed, it is not convertible to cash and is not cumulative

Special Leave for Women

Paid leave granted to a female employee allowing her to recuperate following a surgery caused by gynecological disorders for up to 2 months

Special Leave for Women’s Coverage

• All qualified female employees regardless of age and civil status

• Have undergone surgery due to gynecological disorders

Special Leave for Women’s Duration

• Magna Carta for Women

  • Female employee having rendered continuous aggregate service of at least 6 months for the last 12 months

• Gynecological Disorder

  • Disorders that would require surgical procedures such as, but not limited to dilation and curettage

  • Those involving the female reproductive organs as certified by a competent physician

  • Include hysterectomy, ovariectomy, mastectomy

  • Non-cumulative and non-convertible to cash unless provided by a collective bargaining agreement (CBA)

Magna Carta for Women

SPECIAL LEAVE FOR WOMEN’S DURATION

Female employee having rendered continuous aggregate service of at least 6 months for the last 12 months

Gynecological Disorder (Duration: Special Leave for Women)

SPECIAL LEAVE FOR WOMEN’S DURATION

• Disorders that would require surgical procedures such as, but not limited to dilation and curettage

• Those involving the female reproductive organs as certified by a competent physician

• Include hysterectomy, ovariectomy, mastectomy

• Non-cumulative and non-convertible to cash unless provided by a collective bargaining agreement (CBA)

Special Leave for Women’s Conditions for Entitlement

• Employee has rendered at least 6 months continuous aggregate service for the past 12 months prior to surgery

• Filed an application for special leave within a reasonable period from the expected date of surgery

• Has undergone surgery due to gynecological disorders as certified by a competent physician

Special Leave for Women’s Frequency of Availment

• May be availed for every instance of surgery due to gynecological disorder

• Maximum leave period of two months or 60 calendars days per year

Thirteenth Month Pay

1/12 of the total basic salary earned by an employee within a calendar

Thirteenth Month Pay’s Coverage

• All employers are required to pay their rank-and-file employee 13th month pay regardless of the nature of employment

• Provided that employees worked for at least 1 month during a calendar year

• Managerial employee

  • Vested with powers to lay down and execute management policies

  • Power to hire, transfer, suspend, layoff, recall, discharge, assign, or discipline employees

• Rank-and-file employees

  • Those who do not fit the description of managerial employees

• Employers not covered by 13th month pay compliance

  • Government and any political subdivisions, except corporations operating as private subsidiaries of the government

  • Employers who are already paying employees with 13th month pay even before the Presidential Decree

  • Employers of household helpers and persons in personal service of another

  • Employers of commission-based employees

    • Where workers are paid on a piece-rate basis, the employer shall grant them 13th month pay

Managerial Employee

THIRTEENTH MONTH PAY’S COVERAGE

• Vested with powers to lay down and execute management policies

• Power to hire, transfer, suspend, layoff, recall, discharge, assign, or discipline employees

Rank-and-File Employees

THIRTEENTH MONTH PAY’S COVERAGE

Those who do not fit the description of managerial employees