Terms and Conditions of

Employment
 Minimum Wage
• Under the Philippines’ minimum wage law, the minimum wage
rate varies from one region of the country to another and is set by
the relevant Regional Tripartite Wages and Productivity Board.
Under the most recent wage order for the National Capital Region
(i.e., Metro Manila), the minimum gross basic wage is PHP481
per day plus cost of living allowance of PHP10 per day.
 Work Hours and Overtime
• The normal hours of work should not exceed eight hours a day.
Unless there is a valid compressed work week arrangement, an
employee who renders work in excess of eight hours a day is
entitled to overtime pay equivalent to the applicable wage rate
plus at least 25 percent thereof.
• The overtime rate will vary if the overtime work is rendered on a
rest day, regular holiday or special day or during the period
between 10 p.m. and 6 a.m. of the following day.
Work Hours... contd.

• However, certain classes of employees (called “exempt employees” in this

publication) are not entitled to such overtime pay, namely:
 government employees;
 managerial employees and officers or members of the managerial staff;
 field personnel;
 members of the family of the employer who are dependent on him for
support;
 domestic helpers and persons in the personal service of another; and
 employees who are paid by results, as determined by the Secretary of the
Philippine Department of Labor and Employment (DOLE) in appropriate
regulations.
Work Hours... contd.

• Entitlement of employees to overtime pay depends on the nature

of their duties and responsibilities. If the employees’ duties and
responsibilities do not qualify them as exempt employees, they
are entitled to overtime pay. Conversely, should these employees’
duties and responsibilities qualify them as exempt employees,
they are not entitled to overtime pay.
• Furthermore, employers may not require employees to perform
overtime work except in certain cases and provided appropriate
compensation is paid. In practice, they ask employees to sign
employment contracts where the employees agree to perform
overtime work.
work hours... contd.

• 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.
work hours... contd.

• Undertime Not Offset by Overtime.

Undertime work on any particular day shall not be offset
by overtime work on any other day. Permission given to the
employee to go on leave on some other day of the week shall
not exempt the employer from paying the additional
compensation required
 Night Shift Differential
• This refers to additional compensation of at least 10 percent of an
employee’s applicable wage rate, payable to employees (except
exempt employees) who perform work between 10 p.m. and 6
a.m. of the following day.
 Rest days
• An employer may require its employees to work six days per
week. Employees, except exempt employees, are entitled to a
rest period without pay of not less than 24 consecutive hours for
every six consecutive normal working days. For work done on rest
days, the employer should pay compensation equivalent to the
applicable wage rate plus at least 30 percent thereof. The rate for
work on a rest day will vary if the rest day is also a regular holiday
or a special day or the work is during the period between 10 p.m.
and 6 a.m. of the following day.
rest days... contd.

• Moreover, employers may not require employees to work during

their scheduled rest day except in certain cases and provided
appropriate compensation is paid. In practice, they ask employees
to sign employment contracts where the employees agree to
perform work outside their normal work schedule.
 Meal Period
• An employer must give its employees at least one hour non-
compensable time-off for regular meals. However, an employer is
allowed to give employees a meal break of less than one hour in
certain cases. In any of these cases, the shorter meal period must
be considered as compensable hours worked and must not, in
any case, be less than 20 minutes.
 Regular Holidays
• There are 12 regular holidays, namely:
New Year’s Day (1 January)
Maundy Thursday (movable date)
Good Friday (movable date)
Eidul Fitr (movable date)
Eidul Adha (movable date)
Araw ng Kagitingan (Monday nearest 9 April)
Labor Day (Monday nearest 1 May)
Independence Day (Monday nearest 12 June),
National Heroes Day (Last Monday of August)
Bonifacio Day (Monday nearest 30 November)
Christmas Day (25 December)
Rizal Day (Monday nearest 30 December)
regular... contd.

• Every employer should pay its employees, except exempt

employees, their regular daily wage for any unworked regular
holiday. When an employer asks a non-exempt employee to work
during a regular holiday, the employee should receive at least 200
percent of the applicable wage rate on the said regular holiday.
The rate for work on a regular holiday will vary if the regular
holiday work is rendered during the period between 12 midnight
and 6 a.m. and 10 p.m. and 12 midnight of the regular holiday.
 Special Holidays
• There are three special day holidays, namely:
Benigno S. Aquino Jr. Day (Monday nearest 21 August)
All Saints Day (1 November)
Last day of the year (31 December)
special...contd.

• Employees who are not required to work on these special days

are not, by law, entitled to compensation. Work performed on
these days by non-exempt employees, however, merits
compensation equivalent to the applicable wage rate plus at least
30 percent thereof. If the special day also happens to be the non-
exempt employee’s scheduled rest day, the premium rate is
increased to at least 50 percent of the applicable wage rate. The
rate for work on a special holiday will vary if the special holiday
work is rendered during the period between 12 midnight and 6
a.m. and 10 p.m. and 12 midnight of the special holiday.
 Service Incentive Leave
• Except for exempt employees, every employee who has rendered
at least one year of service is entitled to a yearly service incentive
leave (which is commonly replaced by vacation leave) of five days
with pay. The service incentive leave should be converted to its
money equivalent and paid to the non-exempt employee by the
employer if not used or exhausted by the said employee at the
end of the year. As a general rule, an employer can regulate the
schedule of the service incentive leave of its employees.
 Lactation Period
• Nursing employees are entitled to paid break intervals (i.e.,
lactation periods) in addition to the unpaid regular one-hour meal
period, to breastfeed or express milk. There may be several
lactation periods of short duration during the work day; and, each
lactation period should include the time it takes a nursing
employee to go to and from the workplace lactation station. The
employer and nursing employee may agree on the duration and
frequency of the lactation periods, provided the total length of all
the lactation periods is not less than 40 minutes for every eight-
hour working period.
 Private Retirement Benefit
• An employee is entitled to receive such retirement benefits as he may have
earned under existing laws and any collective bargaining agreement and
other agreements. However, an employee’s retirement benefits under any
collective bargaining and other agreements shall not be less than those
provided by the Labor Code.
• In the absence of any provision on optional retirement in a collective
bargaining agreement, employer’s retirement plan or any other agreement,
an employee (except an underground mining employee) has the option to
retire and receive retirement pay upon reaching the age of 60 years or more,
provided he has served at least five years with his employer.
private... contd.

• When the employee (who is not an underground mining

employee) reaches the compulsory retirement age of 65 years,
his employer may retire him and pay him retirement pay. In the
case of underground mining employees, they may retire and
receive retirement pay upon reaching 50 years of age and
completing five years of service to their employer, and their
employer may retire them and pay them retirement pay when they
reach 60 years (which is the compulsory retirement age for
underground mining worker). An eligible retiring employee is
entitled to retirement pay equivalent to at least his half-month
salary for every year of service, a fraction of at least six months of
service being considered as one whole year.
private... contd.

• The term “half-month salary” for retirement pay purposes

generally includes the 15-day salary of the employee based on his
latest salary date, cash equivalent of five days of service incentive
leave, 1/12 of the 13th month pay due the employee, and all other
benefits that the employer and employee may agree upon to be
included in computing the retirement pay.
 Maternity Leave
• Every qualified pregnant woman in the private sector is entitled to
maternity leave of 60 days in case of normal delivery, abortion or
miscarriage, or 78 days in case of caesarean delivery. During
such leave, the pregnant woman shall receive daily maternity
benefit equivalent to 100 percent of her average salary credit,
computed based on the formula of the Social Security System
(SSS), for 60 or 78 days, as the case may be.
maternity... contd.

• The maternity benefits shall be paid only for the first four
deliveries or miscarriages. The employer is required to advance to
the pregnant female employee the full maternity benefit within 30
days from the filing of the maternity leave application. The SSS
shall immediately reimburse the employer 100 percent of the
amount of maternity benefits advanced to the employee upon
receipt of satisfactory proof of such payment and legality thereof.
 Paternity Leave
• Paternity leave benefit is granted to all married male employees,
regardless of employment status. It applies to the first four
deliveries of the employee’s lawful wife with whom he is
cohabiting. The leave shall be for seven days, with full pay,
consisting of his basic salary, provided that his pay shall not be
less than the mandated minimum wage. In the event the paternity
leave benefit is not availed of, said leave is not convertible to
cash.
 Parental Leave
• In addition to leave privileges under existing laws, parental leave
of not more than seven working days every year shall be granted
to any solo parent employee as defined in the law who has
rendered service of at least one year. A change in the status or
circumstance of the parent claiming parental leave benefit, such
that he or she is no longer left alone with the responsibility of
parenthood, shall terminate his or her eligibility for this benefit.
 Leave Due to Domestic Violence
• A victim of violence against women and their children who is
employed is entitled to paid leaves of up to 10 days in addition to
paid leaves under other laws, extendible when the necessity
arises as specified in a protection order issued by an appropriate
authority. The availment of the 10-day leave is at the option of the
female employee, and such leave shall cover the days that the
employee has to attend to medical and legal concerns. Unused
leaves are not cumulative and not convertible to cash.
 13th Month Pay
• All “rank-and-file” employees of employers covered by the
Revised Guidelines on the Implementation of the 13th Month Pay
Law are entitled to a bonus called “13th month pay,” regardless of
the amount of their monthly basic salary, their designation or
employment status, and the method by which their salary is paid,
provided they have worked for at least one month during a
calendar year. The 13th month pay of a rank-and-file employee
should be equivalent to at least 1/12 of the total basic salary that
the employee earned within a calendar year.
13th... contd.

• The required 13th month pay should be paid not later than 24
December of each year. Nonetheless, an employer may give its
rank-and-file employees half of the required 13th month pay
before the opening of the regular school year in June and the
other half on or before 24 December. The frequency of payment
of the 13th month pay may also be the subject of an agreement
between the employer and the collective bargaining agent of its
rank-and-file employees.
 Service Charge
• All service charges collected by hotels, restaurants and similar
establishments shall be distributed at the rate of eighty-five
percent (85%) for all covered employees and fifteen percent
(15%) for management. The share of the employees shall be
equally distributed among them. In case the service charge is
abolished, the share of the covered employees shall be
considered integrated in their wages.