MODULE 3 (Part 2): ESTABLISHING STRATEGIC COMPENSATION & REWARDS

→ Pay must be equitable

What other employees get for what they do

→ Based either on

• Qualifications required for the job

• Duties and responsibilities of the job

• Supply and demand of workers

• Company’s capacity to pay & to compete in the labor market

• Relative value of salaries and wages against other expenses

→ Significance of labor costs to the industry based on: LABOR INTENSIVE, CAPITAL INTENSIVE, Purchasing power of money essential for decent living, Regulation of wages (i.e, minimum wage law), Collective bargaining agreement of unionized companies

PRINCIPLES IN SETTING THE BASIC SALARY

LABOR INTENSIVE

requires a lot of workers to do the job and employee wages make up to the largest share of production costs

CAPITAL INTENSIVE

requires the investment of a very large amount of money and the primary costs is purchasing, maintaining, and upgrading expensive physical assess (machinery, vehicles, technology, infrastructure, or land).

COMPENSABLE WORKING HOURS

→ Hours worked refers to all compensable period of work

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

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

1. Government employees

2. Managerial employees/officers & members of a managerial staff

3. Domestic helpers

4. Workers paid by results

5. Field personnel

6. Members of the employer’s family

Exemptions from HOURS OF WORK

RA 6727

“WAGE RATIONALIZATION ACT”

RA 6727

Fixing the minimum wage applicable to different industrial sectors

R.A. 6727 "Wage Rationalization Act"

→ As prescribed by law, normal working hours a day is 8 hours.

→ Purpose of the law in limiting the number of working hours in each day of principally to protect the health and welfare of the employees.

MEAL BREAKS

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

→ Where the establishment regularly operates not less than 16 hours a day → Actual or impending emergencies or urgent work to be performed to avoid serious loss

→ Prevention of serious loss of perishable goods

WEEKLY REST PERIODS

Must be at least 24 consecutive hours after every 6 consecutive normal workdays

HOLIDAY PAY

refers to the payment of the regular daily wage for any unworked regular holiday.

Must be present or is on leave of absence with pay on the workday immediately preceding the holiday

condition of holiday pay

1. Retail & Service regularly employing less than 10

2. Managerial employees

3. Field personnel

4. Domestic helpers

5. Government employees

exemption of holiday pay

MONTHLY PAID EMPLOYEES

For those who do not work but are considered paid on rest days, special (non-working) days, and regular holidays:

DAILY PAID EMPLOYEES

For those who are required to work everyday, including Sundays or rest days, special (non-working) days, and regular holidays

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

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

• Not less than 60 mins. time-off for regular meals

• Not compensable

• Less than 60 mins. break is considered compensable

• Shortened meal period :

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

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

o Actual or impending emergencies or urgent work to be performed to avoid serious loss

o Prevention of serious loss of perishable goods

Non-compensable - means that it is not to be included in the computation of hours worked

Non-compensable

means that it is not to be included in the computation of hours worked