Employee Benefits Administration

Employee Benefits Administration

• Employee benefits are perks or additional compensation above salary/wages
• Two types of employee benefits:
  • Mandated by law
  • Voluntary benefits

Mandated by Law Benefits

• Aim to improve employee work lives
• Required by organizations to comply
• Various policies tied to minimum wage
  • Holiday pay, premium pay, overtime pay, night differential, service charges, 13th-month pay, separation pay, retirement pay
• Government-mandated leave provisions
  • Service incentive leave, maternity leave, paternity leave, parental leave for solo parents, leave for victims of violence, special leave for women
• Employee compensation programs for work-related injuries/sickness
  • Social Security system, PhilHealth, Pag-IBIG Fund

Voluntary Benefits

• Depend on an organization's financial capacity and providing willingness
• Organizations may offer more benefits compared to legal requirements to be competitive
• Attract potential job seekers

Objectives & Justification of Employee Benefits

• Employee benefits are perks above salaries/wages
• Organizations provide benefits to retain high performers, motivate productivity, and attract qualified employees
• Employees are more likely to be loyal when an organization cares for their needs
• Competitive benefit packages increase employee productivity and motivation

Government-Mandated Compensation & Benefits

• Department of Labor and Employment (DOLE) provides monetary benefits for Filipino employees
• Wage Rationalization Act (Republic Act No. 6727) sets minimum wage standards for different industrial sectors (e.g., agriculture, non-agriculture, retail/service, etc.) based on factors like gross sales, number of workers, and capitalization.
• Wage Orders apply to all private sector employees earning minimum wage or above
• Handbook on Workers' Statutory Monetary Benefits offers sample computations for monthly/daily paid employees' salaries/wages.

For Monthly Paid Scheme

• Salary includes unworked rest days, special days, and regular holidays.
• Calculations provided for this payment scheme.

For Daily Paid Scheme

• Calculations provided for those working every day, including Sundays and rest days with special days as well as those who work 6 days a week, while another scheme covers employees working 5 days a week.

Holiday Pay

• Payment for unworked regular holidays.
• Employees earn full daily wage even if no work was completed.
• Employees who work on holidays earn double their daily rate.
• Rule doesn't apply to field personnel, government employees, officers/managers and retail/service establishments with fewer than 15 employees in certain scenarios.
• Additional calculations based on 8-hour work on regular holidays and scenarios involving Araw ng Kagitingan that falls on Maundy Thursday or Good Friday

Special Days

• Specified days declared by the President (e.g., EDSA People Power Day, Chinese New Year, All Souls' Day, Christmas Eve, election days)
• Premium pay applies to those days following the same rules as for regular holidays with adjustments for rest days,
• 30% added to the daily rate if it falls on a rest day
• Additional 50% added if special day also falls on rest day

Overtime

• Additional payment for work exceeding 8 hours
• Hourly overtime rate is 25%
• Hourly overtime rate is increased to 130% on rest days

Night Shift Differential

• Additional compensation for work between 10 PM and 6 AM
• 10% hourly wage increase
• Different calculations based on day of the week, regular/special holiday, rest day, and scenarios that overlap with overtime

Service Charge

• Rank and file employees in service-oriented establishments (e.g., restaurants, hotels) share 85% of the service charges equally
• Remaining 15% is allocated by the establishment to cover losses/breakages and managerial decisions.
• Distributed every two weeks with a 16-day limit for payment.
• Tips, if collected, are treated like service charges

Service Incentive Leave

• All employees with at least one year of service are entitled to 5 paid days
• One year of service encompasses 12 months, broken or continuous
• Days can be used for sick or vacation leave
• Unused days can be converted to cash according to the employee's current pay rate
• Excluded scenarios, such as government employees, house helpers, managerial personnel, certain field personnel, and those who get a similar benefit already or those working in establishments with less than 10 employees.

Maternity Leave

• Available to all female employees in the private sector, regardless of marital status
• Requires membership in the Social Security System (SSS) during pregnancy and/or delivery or miscarriage
• Employers must have made three monthly SSS contributions within 12 months before delivery or miscarriage date.
• Duration increased to 105 days during normal delivery and, 105 days for cesarean delivery
• Pregnancy cap removed for first four pregnancies.

Parental Leave for Solo Parents

• 7 days of parental leave for solo parents for carrying out their duties
• Circumstances such as victim of crime, death of spouse, spouse in jail for a year, mental/physical incapacity of spouse, legal separation, marriage annulment, abandonment, unmarried father/mother with custody
• "Child" is a dependent on the solo parent

Leave for Victims of Violence

• 10 days of paid leave for victims of abuse (physical, sexual, psychological) in the private sector
• Requires certification from the barangay chairman, councilor, prosecutor, or court clerk to be eligible

Special Leave for Women with Gynecological Disorders

• 2 months of paid leave for female employees undergoing gynecological surgery in the private sector
• Needs at least 6 months of previous employment within the past 12 months.

13th Month Pay

• All rank and file employees must receive 13th month pay by December 24 of each year if employed for one month during the calendar year
• Includes all earnings excluding monetary benefits not part of basic pay
• Applies to piecework employees, employees with fixed wages/commissions, and part-timers
• Proportionate to the time worked for those who resigned/terminated during the year.

Separation Pay

• Termination for authorized causes (e.g., retrenchment, redundancy, use of labor-saving devices, incurable illness).
• Other termination reasons (e.g., habitual neglect of duty, fraud, crime, other grave offenses) are not covered.
• Payout is half a month's pay for every year of service for authorized causes
• Employees can receive one month's pay for certain causes (installation of labor-saving devices, redundancy, etc.)

Retirement Pay

• Retirement age is 60-65
• 5 years minimum service requirement
• Benefits don't extend to certain types of employers/employees such as those in government service, retail, service, and establishments with fewer than 10 workers in those sectors

Employees' Compensation

• Government program compensating employees in case of sickness, injury, disability, or death
• Mandatory compensation contribution for all SSS member-employees

PhilHealth Benefits

• Health insurance for SSS members and dependents
• Covers employed, individually paying, and non-paying members (retirees, pensioners of GSIS and SSS), and indigent members

Pag-IBIG Benefits

• Savings, short-term loans, and housing programs for covered employees (SSS members)
• Voluntary membership for individuals between 18-65, but is dependent on the rules and regulations
• Mandatory for employees covered under SSS

This quiz covers the essential aspects of employee benefits administration. Learn about mandated benefits required by law alongside voluntary benefits that enhance employee satisfaction. Gain insights into various compensation policies and leave provisions vital for workplace compliance.