Labor Law

III.
LABOR LAW
1. Define and Show how to compute for the following:
a. Basic pay
-It is all the remunerations and earnings paid by an employer to an
employee.
What are the exclusions to the basic salary?

- Allowances and monetary benefits which are NOT considered
integrated as part of the regular or basic salary SUCH AS vacation and
sick leave credits, overtime, premium, night differential, holiday pay and
COLA .
Qualification: They are treated as part of the basic salary if provided by

reasons of individual or collective bargaining or company practice or
policy.
b. Overtime premium
c. Night Shift Differential

- It is additional compensation
- NOT LESS THAN 10% of an employee’s regular wage
- for every hour work
- done between 10:00 pm to 6:00 am,
- whether or not such period is part of the worker’s regular shift.
NSD applies to all employees, EXCEPT:

1. Employees of the Government and any of its political subdivisions,
including GOCC’s.
2. Retail and service establishments regularly employing not more than 5
workers.
3. Includes task and contract basis
4. Domestic helpers and persons in the personal service of another.
5. Field personnel and other employees whose time and performance is
unsupervised by the employer
6. Managerial employees
What if work done between 10 PM and 6 AM is overtime work?

- Then the 10% NSD should be based on the overtime rate.
Note: When the employee’s shift falls at nighttime, the receipt for
overtime pay SHALL NOT preclude the right to receive NSD.
FORMULA for computing NSD

(10% x regular wage per hour) x no. of hours of work performed
between 10pm-6am
d. Holiday Premium
- It is a premium given to employees pursuant to law even if he has not
been suffered to work on a regular holiday.
How is holiday pay/premium rates computed?

A: The following are the means to compute holiday pay
rates:
- Unworked - 100%
- Worked - 200%
- If also Rest day - 260%
Who are entitled to holiday pay?

-Generally, all employees are covered by holiday pay except the
following:
1. Government and any of its political subdivisions, including GOCCs
(with original charter)
2. Retail and service establishments regularly employing less than 10
workers
3. Managerial employees and other member of the managerial staff
4. Domestic helpers and persons in the Personal service of another
5. Employees Engaged on task or contract basis or purely commission
basis
6. Field personnel and other employees whose time and performance
are unsupervised by the
employer
7. Employees paid Fixed amount for performing work irrespective of the
time consumed in the
performance thereof
8. Members of the Family of the employer who are dependent on him
for support
e. 13th month pay

- An additional income equivalent to 1/12 of the total basic salary
earned by an employee within a calendar year. (Minimum Amount).
- May be given anytime but not later than December 24
In what forms is the 13th month pay paid or given?

It is given in the forms of:
- Christmas Bonus
- Midyear Bonus
- Profit Sharing Scheme
- Other Cash bonuses amounting to not less than 1/12 of its basic
salary
 Difference of opinion on how to compute the 13th month pay does

NOT justify a strike.
 It must always be in the form of legal tender.
 Free rice, electricity, cash and stock dividends and COLA are NOT
proper substitutes for the 13th month pay.
What is the coverage of the 13th month pay?

 Rank-and-File employees
- regardless of their designation or employment status and
- irrespective of the method which their wages are paid,
- who worked for at least 1 month during the calendar year.
f. Leaves
- the nature of vacation and sick leave is voluntary
What is the basis of vacation and sick leave?

A: It is a result of
1) collective bargaining negotiations or
2) established employer practice or policy, not granted by law
How does an employee enjoy vacation and sick leave benefits?

It is enjoyed by the employee thru established practice or policy of the
employer and cannot be unilaterally withdrawn by the latter.
- It must be claimed, otherwise, waived
- cannot be converted into cash unless allowed by employer
g. Service Incentive Leave

- It is 5 days leave with pay for every employee who has rendered at
least 1 year of service.
Who are entitled to Service Incentive Leave?

GR: Applies to every employee who has rendered at least 1 year of
service.
XPNS: Employee in:
1. Government and any of its political subdivisions including GOCC’s
2. Those already enjoying the benefit
3. Domestic helpers and persons in the personal services of another
4. Those already enjoying vacation leave with pay of at least 5 days
5. Managerial employees
6. Field personnel and other employees whose performance is
unsupervised by the employer
7. Employed in establishments regularly employing less than 10 workers
8. Exempt establishments
9. Engaged on task or contract basis, purely commission basis, or those
who are paid in a fixed amount of performing work irrespective of the
time consumed in the performance thereof
What does One year of service mean?

One year of service is:
1. service within 12 months
2. whether continuous or broken
3. reckoned from the date the employees started working
4. including authorized absences and paid regular holidays
5. unless the number of working days in establishment, as a matter of
practice or policy or as
provided in the employment contract, is less than 12 months.
h. Maternity Leave
1.period of time
2.which may be availed of by a woman employee,
3.married or unmarried,
4.to undergo and recuperate from child birth, miscarriage or
complete abortion
5.during which she is permitted to retain her rights and benefits
flowing from her employment.
i. Paternity Leave
Paternity leave is:
1. granted to a married male employee (in private and public
sectors)
2. allowing him NOT to report for work for seven days
3. but continues to earn the compensation,
4. provided his spouse has delivered OR suffered a miscarriage
5. for purposes of enabling him to actively lend support to his wife
in her period of recovery
and/or in the nursing of the newly-born child.
NOTE: Avail only for the first 4 deliveries of his legitimate spouse with
whom he is cohabiting.
j. Parental Leave for Solo Parent

- It is a leave of not more than 7 working days granted every year to any
solo parent employee who has rendered service of at least 1 year
Is the Solo Parent Leave convertible to cash?

- No, It is not convertible to cash UNLESS specifically agreed upon
otherwise, and is non-cumulative.

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III.

What are the exclusions to the basic salary?

Qualification: They are treated as part of the basic salary if provided by

c. Night Shift Differential

NSD applies to all employees, EXCEPT:

What if work done between 10 PM and 6 AM is overtime work?

FORMULA for computing NSD

How is holiday pay/premium rates computed?

Who are entitled to holiday pay?

e. 13th month pay

In what forms is the 13th month pay paid or given?

 Difference of opinion on how to compute the 13th month pay does

What is the coverage of the 13th month pay?

What is the basis of vacation and sick leave?

How does an employee enjoy vacation and sick leave benefits?

g. Service Incentive Leave

Who are entitled to Service Incentive Leave?

What does One year of service mean?

j. Parental Leave for Solo Parent

Is the Solo Parent Leave convertible to cash?

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