Compensation and Benefits HRM BSE - 1E PDF

ECC 103 HUMAN RESOURCE MANAGEMENT Dubouzet, Mclurace B.S. IN ENTREPRENEURSHIP  Compensation refers to the payment employees receive in exchange for their labour, including wages, salaries, and bonuses. This monetary compensation is straightforward and is usually determined by the...

ECC 103 HUMAN RESOURCE MANAGEMENT Dubouzet, Mclurace B.S. IN ENTREPRENEURSHIP  Compensation refers to the payment employees receive in exchange for their labour, including wages, salaries, and bonuses. This monetary compensation is straightforward and is usually determined by the role, experience level, and market Employee benefits are non- standards. wage compensations that supplement the salary package. These can include health insurance, retirement plans, paid time off, and other perks, such as gym memberships.  TAX S L AW Philippine u Laws That C ti o Govern or on ns Employee LABOR M y t ri on an Benefits and b C OD E La d a Compensatio w s t n  is among the most important laws Republic Republic ActAct8282 8282 companies need to follow when it comes (Social (SocialSecurity Security Act to employing workers. It outlines the Act of of1997): 1997):ThisThislaw lawensures ne Laws that on to the thatLABOR ensurescontributions employment practices and relations, at Mandator contributions SocialCODE (SSS)Security to the Social Security Systemincluding employee benefits and provide System y (SSS) provide unemployment, compensation: unemployment, maternity, injury, ee Contribut maternity, and disability1. Minimum Wage sickness, injury, sickness, benefits,and anddisability ions and benefits, and alsoplan for as a retirement 2. Overtime Pay also serves a retirement 3. Night Differential satioserves asemployees. private plan for private employees. 4. Holiday Pay 5. 13th Month Pay 6. Maternity Leave  Republic Act 8282 (Social Security Act of 1997): This law ensures that contributions to the Social Security System (SSS) provide unemployment, maternity, injury, sickness, and disability e Laws on benefits, and also serves as a retirement at Mandator plan for private Republic employees. Act No. 9679 (Home Development Mutual Fund Law): y Known as the PAG-IBIG Fund Law, this act e Contribut allows employees to access low-interest ions housing loans and other investment opportunities through their contributions. Republic Act No. 10606 (National sati Health Insurance Act of 1995): This law mandates that contributions to PhilHealth provide healthcare services access to all employed persons and their  also affect an employee’s compensation. These laws, for TAX instance, set the ceiling of LAW salaries and benefits that would be excluded from tax S computations. ti Who Are Entitled To Employee Benefits and Compensation? Some benefits are available to non-permanent workers, such as the minimum wage and 13th Month Pay after one month of service. Not providing these can result in legal penalties. Independent contractors and freelancers do not receive employer contributions for SSS, PhilHealth, and Pag-IBIG, leaving them responsible for availing those benefits themselves. Permanent or regular employees, on the other hand, are typically entitled to all company benefits, including perks like rice subsidies and transportation allowances. Guaranteed Benefits and Compensation for Employees in the Philippines Minimum Wage In the Philippines, employers must pay at least the minimum wage. This varies across industries and regions. In Metro Manila, it’s: P610 per day for those in non-agricultural sector P573 per day for the agricultural sector P573 per day for retail and service sector, if the company employs 15 employee or less P573 per day for manufacturing, if the company employs less than 10 workers 13th Month Pay Employees are entitled to 13th month pay. Regular employees who have worked the full year often receive at least 1 month their salary for their 13th month pay. Those who haven’t worked a full year will receive a prorated amount. Holiday Pay, Overtime Pay, and Night Differential Holiday Pay The Philippines recognises several regular holidays where workers are not required to report for work but should still receive 100% of their daily wage. If they do work, then they should receive 200% of their regular wage. Holiday Pay, Overtime Pay, and Night Differential Overtime Pay Working beyond 8 hours a day should be compensated accordingly. The adjustment, however, depends on when an employee works overtime. During regular working days, an employee’s overtime hourly rate should be at least 125% their regular hourly rate. If they work on a holiday, it should be 130% of their holiday hourly rate. Example: Commonly, the regular hourly rate is calculated by dividing the daily wage by 8 hours. If the daily wage is P610, the hourly rate is P76.25. On a regular day, the overtime hourly rate is P76.25 x 125% = P95.3125. If an employee works beyond 8 hours on a holiday, then the computation looks like this: P610 x 200% = P1220, divide that by 8 hours = P152.5 then multiply by 130%. Their overtime hourly rate should be P198.25. Holiday Pay, Overtime Pay, and Night Differential Night Differential Work done between 10 PM and 6 AM should be 110% of the regular hourly rate. Overview of Compensation Benefits in the Philippines: Benefit Summary and Computation 13th Month Pay, Holiday Pay, Overtime Employees receive at least one Pay, and Night Differential month's salary as 13th month pay. Pro- rated for those who haven't worked a full year. Holiday Pay Workers get 100% of daily wage on holidays without work; 200% if they work on a holiday. Overtime Pay Compensation for over 8 hours of work varies: 125% of hourly rate on regular days, 130% on holidays. Night Differential Additional 10% of the hourly rate for work between 10 PM and 6 AM. Benefits from Mandatory Contributions Benefits from Mandatory Contribution Benefits from Mandatory Contribution Benefits from Mandatory Contribution Benefits from Mandatory Contribution  Summary of Employee Benefits by Mandatory Contribution Programs in the Philippines Mandatory Contribution Summary of Benefits - Retirement: Monthly pension or lump sum. - Disability: Monthly pension or lump sum. - Maternity: Cash allowances. - Sickness: Daily cash allowance. Social Security System (SSS) - Death and Funeral: Cash and funeral grant. - Salary Loans: Short-term financial loans. - Unemployment Insurance: One-time assistance. - Inpatient Care: Coverage for various hospital expenses. - Outpatient Care: Coverage for surgeries, dialysis, cancer treatment. - Z Benefits: Coverage for catastrophic illnesses. Philippine Health Insurance Corporation (PhilHealth) - Maternity Care: Coverage from prenatal to postnatal care. - Low-interest Loans: For home improvements, education, etc. - Savings: Contributions earn tax-free, government- Home Development Mutual Fund (PagIBIG) guaranteed dividends. - Affordable Housing Programs: Loans for low-income earners. Reference A Guide on Employee Benefits and Compensation in the Philippines