Philippines Labor: Statutory Monetary Benefits 2023

• This handbook from the Department of Labor and Employment's Bureau of Working Conditions details workers' statutory monetary benefits for 2023.

Minimum Wage

• The Wage Rationalization Act (RA 6727) orders minimum wages to be established for sectors like non-agriculture, agriculture, retail/service, cottage/handicraft depending on the workforce size, capitalization, or gross sales.
• "Agriculture" includes farming and cultivation but excludes processing sugar, coconut, abaca, tobacco, pineapple, or aquatic products.
• A “Retail establishment” is primarily selling goods to end-users for personal or household use.
• A “Service establishment” is involved in selling services to individuals for their household or personal use.
• Regional Tripartite Wages and Productivity Boards (RTWPBs) set daily minimum rates by region based on criteria.

Minimum Wage Coverage

• Wage increases apply to private sector workers receiving minimum rates or up to a certain wage ceiling, regardless of position/designation, except BMBEs with a Certificate of Authority under RA 10644.
• Establishments can apply for an exemption from Wage Orders for up to a year with the RTWPB and NWPC.
• Daily Minimum Wage in the National Capital Region as of July 2023 (Wage Order No. NCR-24) are as follows:
  • Non-agriculture: P610.00
  • Service/Retail (employing 15 or less): P573.00

Rules in Determining Compensable Working Hours

• The normal working hours are eight (8) hours a day which forms the basis of minimum wage rates.
• Compensable hours include time when an employee is required to be on duty/at their workplace and when they are suffered or permitted to work.

Principles in Determining Hours Worked

• All hours during which an employee is required to give service to an employer are hours worked.
• Employees do not need to leave the workplace for rest periods not to be counted.
• Time spent working is counted as hours worked if the work is necessary, it benefits the employer, or if the employee has no replacement.
• Inactive time due to interruptions beyond the employee's control counts as working time if resumption is imminent or the interval is too brief to use effectively.
• Waiting time is working time if it is an integral part of the job or if the employee is required/engaged to wait.
• Time when an employee is required to remain on call is hours worked, unless the employee is not required to leave word at home or with company officials where they may be reached.

Attendance at Lectures, Meetings and Training

• Activities outside work hours, voluntary, and without productive work are not counted as working time.

Meal and Rest Periods

• Employees get at least 1 hour for regular meals, or 20 minutes of compensable time for non-manual work, establishments operating 16+ hours/day, emergencies, or to prevent loss of perishables.
• Five to twenty (5-20) minute rest periods or coffee breaks are regarded as compensable working time.

Monthly-Paid vs Daily-Paid Employees

• "Monthly-paid employees" are paid every day of the month, including unworked rest days, holidays, etc.
• Annual salary is calculated with a factor of 365 days in a year.
• "Daily-paid employees" paid on days actually worked plus unworked regular holidays.

Computation of Estimated Equivalent Monthly Rate (EEMR)

• Factor 365 is used in calculating annual/monthly salary of monthly-paid employees.
• Applicable Daily Rate (ADR) x 365 / 12 months = EEMR.
• Where 365 days/year is the total of 293 ordinary working days, 52 rest days, 12 regular holidays and 8 special non-working days.

Daily-Paid Employees’ EEMR Computations

• For those required to work everyday: Applicable Daily Rate (ADR) x 395.7 / 12 months = EEMR.
• Where 394.4 days/year is the total of 293 ordinary working days + 67.6 rest days(52 x 1.3) + 24 Regular holidays (12 x 2) + 10.4 Special non-working days (8 x 1.3).
• For those not paid on Sundays or rest days, Applicable Daily Rate (ADR) x 313 / 12 months = EEMR
• 313 is derived from 293 ordinary working days, 12 Regular holidays, and 8 Special non-working days
• For those not paid on Saturdays/Sundays/rest days, Applicable Daily Rate (ADR) x 261 / 12 months = EEMR
• 261 is derived from 241 ordinary working days, + 12 Regular holidays, and 8 Special non-working days

Subsidized Meals and Snacks

• Employers may provide these if the subsidy isn't less than 30% of the value and employees pay no more than 70%, per the RTWPB Facility Evaluation Order.

Wage of Kasambahay (Domestic Worker)

• Regional Tripartite Wages and Productivity Boards are mandated to review and adjust minimum wages of Kasambahay.

Wage of Kasambahay who Works as Salesclerk

• Wage should be in accordance with the applicable minimum wage in retail and service establishments, as per existing Wage Orders.

Effect of Reduction of Workdays on Wages

• Employers may deduct wages for days off work due to losses or lack of materials, using the "no work, no pay'' policy.

Penalties for Wage Rate Violations (RA 8188)

• Violators face fines from P25,000-P100,000 and/or 2-4 years imprisonment, without probation benefits.
• Employers must pay double the unpaid benefits.
• For corporations, officers face imprisonment.

Barangay Micro Business Enterprises (BMBEs)

• BMBEs are exempt from Minimum Wage Law if assets are Three Million Pesos (P3,000,000) and still must grant same benefits as security and health care benefits.
• BMBE workers/owners agree to wage rates based on RTWPB wage advisories.

Workers Paid by Result

• Paid no less than the prescribed rates under Regional Wage Orders for normal hours (max 8 per day).

Annual Establishment Report on Wages (AERW)

• Private establishments submit annual reports listing labor components, salaries, apprentices, learners, and disabled/handicapped workers.
• Private establishments need to register and log-in for AERW online reports submission.
• Submission needs to be done before the end of January 31 of the following year.

Income Tax Coverage

• From January 1, 2018, several incomne payments are exempted from withholding tax:
• Compensation income of Minimum Wage Earners (MWEs) paid the Statutory Minimum Wage (SMW).
• Holiday/overtime/night shift differential/hazard pay earned by MWEs are exempt.
• Hazard pay applies specifically to assignments in dangerous areas.
• Compensation such as excess benefits above the limit, commissions, etc. are subject to withholding tax.

Holiday Pay

• Refers to receiving the regular daily wage for a holiday that went unworked.
• Benefit applies to employees except government employees, retail/service establishments with less than 10 workers, kasambahay, managerial employees performing managerial positions, and personal service providers. Regular holidays for 2023 according to Proclamation No. 42 s. 2022 as amended by Proclamation No. 90 s. 2022: -01 January (Sunday) - New Year’s Day -06 April (Thursday) - Maundy Thursday -07 April (Friday - Good Friday -10 April (Monday nearest April 9) - Araw ng Kagitingan -Movable Date - Eidul Fitr -01 May (Monday) - Labor Day -12 June (Monday) - Independence Day -Movable Date - Eidul Adha -28 August (Monday) - National Heroes Day -27 November (Monday nearest November 30) - Bonifacio Day -25 December (Monday) - Christmas Day -30 December (Saturday) - Rizal Day

Holiday Pay Rates

• 100% of Regular Wage: All employees get regular wage regardless of reporting for work if present or in paid leave days before the holiday.
• 200% Wage: If working that day.
• Absenteeism: Employees get the same percentage for social security as authority has determined so.
• 230% Wage: Work day falls on scheduled restday of employee.
• Coverage: Does not apply to employees in retail and service sector with less than 10 employees
• Does not account for other collective agreements.

Successive Regular Holidays

• When there are two holidays, if employee does not report for work but reports after the first day, then workers only get paid for first day.

Temporary or Periodic Shutdowns/Cessation of Work

• Holidays are still accounted for and must be compensated accordingly.

Holiday Pay of Certain Workers

Rates of pay are no less than the daily eanings average but may be less than statutory minimum pay. Seasonal workers who are ot currently working will not receive Holiday pay, and those who do not have a regular work day will have Holiday Pay.

Premium Pay

Additional compensation for working on rest and special days within 8 hours.

Coverage

Government Employees, Managerial and Staff positions which are described at length in the document, as well as Kasambahay, personal service agents, and some field personnel are not covered by premium pay.

Night Shift Differential

Additional pay for workers performing between 10pm and 6am.

Coverage

Government Employees, Staff Positions which are defined at length in the document, Kasambahay, and personal service agents.as well as some retail and service industry are not covered by night shift.

Parental Leave for Solo Parents

Solo Parents are defined by their providing and caring for their children under varied circumstances.

• Birth due to rape without conviction
• Death, detention and legal matters regarding parental figure
• Includes OFW and guardian of OFW children
• Other factors and legal guardians who are unmarried and 22 years or under. This must be described as the following terms within the laws
• --Child and dependents - those living in the residency
• --Parental care

Leave is up to 7 working days dependent on 6 months of continual services.

Entitlement and Availment

Requires 6 month continual service and reasonable time of employer notification of claim. Card must also be presented.

• Not converted to cash when not utilized. Can be credited into other company funds. May only be availed in those who maintain solo parent status.

LEAVE FOR VICTIMS OF VIOLENCE AGAINST WOMEN AND THEIR CHILDREN (VAWC)

Granted to Employees

• Definition of VAWC is presented Employee will be entitled to a leave of up to 10 Ten days, which can be extended following the needs, under the existing labor laws Requirements
• Employer notification and certificate that action is pending

Special Leave for Women

Definition is the recuperation of pain following gynecological surgery. Employee must be qualifed and the service is to be continually given without the chance to be converted.

• Certification for maximum leave must be granted for employees for periods of recuperation following procedures

Conditions and Entitlement

Employee must have worked for 6 continual months, give time for time off as procedure as specified by company, and medical certifcation is required

13th-Month Pay

Thirteenth-month pay is 1 /12th otal basic salary earned by employed over the calendar year. Employees who are required to receive rank and fill regardless of service but must work 1 months within a year. Not applicable among managerial role, including government, those earning from 13th-month benefits, or workers providing household and personal servants. Cash and stock dividents, and allowances cannot be the basis of what the 13th-month pay is base on

Regulations for different types of employees

This benefit is offered for employees under 8 month employment schedules, payment of employees, and fixed employees, as well as certain exemptions from what is applicable in payments and wages.

Coverage from Income tax

Certain exemptions are made within income tax when considering amount paid based on the type of work, payment and those who require and will need benefits as awarded such.

Report of Compliance

Employers shall make a report of their complaiance and maintain the same standards with the following. 1.Name of Establishment, Address, Principal, Production, Total employment.

Separation Pay

Compensation to anyone terminated with Article 298-299 as renumbered. Amount -1 /2 month to those due to termination. It's also is dependent on reason for why the separation o termination occurred as it relates to services.

• Installation by owner during labor devices
• employee reinstatments. -Inability to assign or the likes

Notices

Employer may stop employing with above mention causes serving employee on Deparment of Labour

• Done by accomplishing a RKS Form 5 or accomplishing or submitting an online report