Handbook on Workers' Statutory Monetary Benefits 2017 PDF

HANDBOOK ON WORKERS’ STATUTORY MONETARY BENEFITS DEPARTMENT OF LABOR AND EMPLOYMENT BUREAU OF WORKING CONDITIONS INTRAMUROS, MANILA 2017 The Project Team Ma. Teresita S. Cucueco, Alvin B. Curada, Catherine Legados -Parado, Nicanor V. Bon, Emila T. de Guzman , Lalain...

HANDBOOK ON WORKERS’ STATUTORY MONETARY BENEFITS DEPARTMENT OF LABOR AND EMPLOYMENT BUREAU OF WORKING CONDITIONS INTRAMUROS, MANILA 2017 The Project Team Ma. Teresita S. Cucueco, Alvin B. Curada, Catherine Legados -Parado, Nicanor V. Bon, Emila T. de Guzman , Lalaine M. Familara, Julienne C. Recamara, Euniz Johanne M. Garcia and other BW C staff All Rights Reserved This Handbook, or any part thereof, may not be reproduced for commercial purposes without the written permission of the Burea u of Working Conditions, Department of Labor and Employment. This Handbook is published by the Bureau of Working Conditions (BW C) Department of Labor and Employment (DOLE) 3 r d Floor, DOLE Bldg., Intramuros, Manila Tel. No. 5273000 locals 303, 308; Telefax No. 527-3478; email: [email protected] ; website: bwc.dole.gov.ph - NOT FOR SALE – Cover Art : Ma. Alea Razelle S. Gaela  Republic of the Philippines DEPARTMENT OF L ABOR AND EMPLOYMENT Intramuros, Manila FOREWORD We are pleased to present a reprint of the 2017 Handbook on Workers’ Statutory Monetary Benefits – an updated and comprehensive material on recent developments in Philippine labor laws and regulations. Through the years, this Handbook has become a dependable guide not only for workers and employers, but also to students, labor law practitioners, and the general public. The consistently enthusiastic reception extended to this work has pro mpted us to issue a reprinted edition. This reprint forms part of our vigor ous and strengthened enforcement activities under the new administration. We commit to be steadfast in addressing abuses in employment arrangements while remaining strict yet equi table. Toward such end, we intend to educate stakeholders and inspire a culture of voluntary compliance with labor laws in as many workplaces as possible. In this edition, we added more detailed illustrations and sample wage computations to facilitate th e computation of equivalent monthly rates for daily -paid and monthly-paid workers. Another new item is the enumeration of the regional minimum wage rates prescribed in the latest Wage Orders. We also included entries on the exemption from the minimum wage law of barangay micro business enterprises under the BMBE Act of 2002, as amended by the Go Negosyo Act of 2014. An equally important development is the inclusion of entries on the income tax exemption on minimum wage earners under R.A. No. 9504; the ta x treatment on separation pay and retirement pay; and the tax implication on 13 t h month pay in view of the passage of R.A. No. 10653 which raised the income tax exemption ceiling to P82,000. We sincerely hope that, with this Handbook, we can stay true to our mandate of promoting full, decent, and productive employment opportunities for every Filipino worker in every workplace throughout the country. SILVESTRE H. BELLO III Secretary  CONTENTS COMPLIANCE GUIDE 1 1. MINIMUM WAGE A. Coverage 3 B. Minimum Wage Rates 4 C. Basis 6 D. Monthly-Paid and Daily-Paid Employees 6 E. Minimum Wage and Rights of Kasambahay 8 F. Effect of Reduction of Workdays on Wages 9 G. Penalty and Double Indemnity for Violation of the Prescribed Increases or Adjustments in the Wage Rates (RA 8188) 9 H. Barangay Micro Business Enterprises (BMBEs) 9 I. Minimum Wage of Workers Paid by Results 10 J. Minimum Wage of Apprentices, Lea rners, & Persons with Disability 10 K. Coverage from Income Tax of Minimum Wage Earners 11 2. HOLIDAY PAY (Article 94) A. Definition 12 B. Coverage 12 C. Regular Holidays 13 D. Absences 14 E. Successive Regular Holidays 15 F. Temporary or Periodic Shutdown/Cessation of Work 15 G. Holiday Pay of Certain Employees 15 3. PREMIUM PAY (Articles 91-93) A. Definition 16 B. Coverage 16 C. Special Days 17 D. Premium Pay Rates 18 4. OVERTIME PAY (Article 87) A. Definition 19 B. Coverage 19 C. Overtime Pay Rates 19 D. Stipulated Overtime Rates 20 5. NIGHT SHIFT DIFFERENTIAL (Article 86) A. Definition 21 B. Coverage 21 C. Computation of Night Shift Differential 22 6. SERVICE CHARGES (Article 96) A. Sharing 24 B. Payments 24 C. Tips 24 7. SERVICE INCENTIVE LEAVE (Article 95) A. Coverage 25 B. Meaning of “one year of service” 26 C. Usage/Conversion to Cash 26 8. MATERNITY LEAVE (RA 1161, as amended by RA 8282) A. Coverage 27 B. Entitlement 27 9. PATERNITY LEAVE (RA 8187) A. Coverage 28 B. The Paternity Leave Benefit 28 C. Conditions for Entitlement 29 D. Application for Paternity Leave 29 E. Non-conversion to Cash 29 F. Crediting of Existing Benefits 29 10. PARENTAL LEAVE FOR SOLO PARENTS (RA 8972) A. Coverage 30 B. Definition of Terms 31 C. The Parental Leave Benefit 31 D. Conditions for Entitlement 31 E. Non-conversion to Cash 31 F. Crediting of Existing Leave 32 G. Termination of the Benefit 32 H. Protection Against Work Discrimination 32 11. LEAVE FOR VICTIMS OF VIOLENCE AGAINST WOMEN AND THEIR CHILDREN (RA 9262) A. Definition 33 B. Coverage and Purpose 33 C. Requirement for Entitlement 33 D. The Benefit 34 E. Usage of the Benefit 34 12. SPECIAL LEAVE FOR WOMEN (RA 9710) A. Coverage 35 B. Definition of Term 35 C. Conditions for Entitlement 35 D. The Special Leave Benefit 35 E. Usage 36 F. Nonconversion to Cash 36 13. THIRTEENTH-MONTH PAY (PD 851) A. Coverage 37 B. Definition of Rank -and-File Employees 37 C. Minimum Amount 37 D. Formula and Computation of 13 t h Month Pay 38 E. Exempted Employers 39 F. Time of Payment of Thirteenth -Month Pay 39 G. Thirteenth-Month Pay for Certain Types of Employees 40 H. Thirteenth-Month Pay of Resigned or Separated Employee 40 I. Non-inclusion in Regular Wage 41 J. Coverage from Income Tax of the 13 t h Month Pay 41 14. SEPARATION PAY (Articles 2 98- 299) A. One-Half Month Pay per Year of Service 42 B. One-Month Pay per Year of Service 43 C. Notice of Termination 43 D. Basis of Separation Pay 43 E. Inclusion of Regular Allowance in the Computation 43 F. Coverage from Income Tax of Separation Pay 44 15. RETIREMENT PAY (Article 302) A. Coverage 45 B. Amount of Retirement Pay 45 C. Retirement Benefits under a Collective Bargaining Agreement/ Applicable Contract 46  D. Retirement Benefits of Workers who are Paid by Results 46 E. Retirement Benefit of Part-time Workers 47 F. Retirement Benefit of Unde rground or Surface Mine Employees under Republic Act No. 8558 as amended by Republic Act No. 10757 47 G. Retirement Benefit of Racehorse Jockeys 47 H. Retirement Benefits of Kasambahay and Persons in the Personal Service of Another 48 I. Other Benefits upon Retirement 48 J. Coverage from Income Tax of Retirement Pay 48 16. BENEFITS UNDER THE EMPLOYEES’ COMPENSATION PROGRAM (PD 626) A. The Employees’ Compensation Program 49 B. Coverage 49 C. The Benefits 49 D. Kinds of Disability 50 E. Filing of Claims 51 F. Obligations/Responsibilities of Employers 52 17. PHILHEALTH BENEFITS (RA 7875, as amended by RA 9241) A. The National Healt h Insurance Program 53 B. Coverage 53 C. The Benefits 54 18. SOCIAL SECURITY BENEFITS (RA 1161, as amended by RA 8282) A. The Social Security Program 58 B. Coverage 58 C. The Benefits 58 19. PAG-IBIG BENEFITS (RA 9679) A. The Home Development Mutual Fund (HDMF) 61 B. Coverage 61 C. The Benefits 63 D. Monthly Contribution 65 APPENDIX Directory of DOL E Regional Offices 66 Directory of DOLE -NCR Field Offices 67 The Bureau of Working Conditions 68  1 C OMPLIANCE G UIDE Retail & Service Applicable Labor Establishments Non- Reference Standards Employing 1 Employing 1 Agriculture (Page no.) to 5 w orkers to 9 w orkers Minimum Wage ✓ ✓ ✓ 2 Holiday pay N/ A N/ A ✓ 12 Premium pay ✓ ✓ ✓ 16 Overtime pay ✓ ✓ ✓ 19 Night shift pay N/ A ✓ ✓ 21 Service charges ✓ ✓ ✓ 24 Service incentive leave N/ A N/ A ✓ 25 Maternity leave ✓ ✓ ✓ 27 Paternity leave ✓ ✓ ✓ 28 Parental leave ✓ ✓ ✓ 30 Leave for VAW C ✓ ✓ ✓ 33 Special leave for women ✓ ✓ ✓ 35 13 t h month pay ✓ ✓ ✓ 37 Separation pay ✓ ✓ ✓ 42 Retirement pay N/ A N/ A** ✓ 45 ECC benefits* ✓ ✓ ✓ 49 PhilHealth benefits* ✓ ✓ ✓ 53 SSS benefits* ✓ ✓ ✓ 58 Pag-IBIG benefits * ✓ ✓ ✓ 61 *will be paid by the Government ** employing not mor e than 10 workers Subsidized Meals and Snacks The employer may provide subsidized meals and snacks to his employees provided that the subsidy shall not be less than 30% of the fair and reasonable value of such facilities. In such case, the employer may deduct from the wages of the employees not more than 70% of the value of the meals and snacks enjoyed by the employees, provided further that such deduction is with the written authorization of the employees concerned. (Sec. 4 Rule VII -A, Book III of the Rules Implementing the Labor Code). For the computation of the fair and reasonable value of the meals given, the employer may seek assistance from concerned Regional Tripartite Wages and Productivity Board (RTW PBs). Salary of Kasambahay who works as salesclerk A Kasambahay who works as salesclerk should receive salary in accordance with the prescribed minimum wage which is applicable in the retail and service establishments, under existing Wage Orders.  2 1 M INIMUM W AGE Republic Act No. 6727 (also known as the “Wage Rationalization Act”) mandates the fixing of the minimum wages applicable to different industrial sectors, namely, non-agriculture, agriculture plantation, and non- plantation, cottage/handicraft, and retail/service, depending on the number of workers or capitalization or annual gross sales in some sectors. The Rules Implementing RA 6727 define the industrial sectors as follows: “Agriculture” refers to farming in all its branches and, among others, includes the cultivation and tillage of the soil, production, cultivation, growing and harvesting of any agricultural or horticultural commodities, dairying, raising of livestock or poultry, the culture o f fish and other aquatic products in farms or ponds, and any activities performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, but does not include the manufacturing and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or other farm products. “Retail Establishment” is one principally engaged in the sale of goods to end-users for personal or household use. A retail establishment that regularly engages in wholesale activities loses its retail character. “Service Establishment” is one principally engaged in the sale of service to individuals for their own or household use and is generally recognized as such. The said law rationalized wage determination by establishing the mechanism and proper standards through the creation of Regional Tripartite Wages and Productivity Boards (RTWPBs) authorized to determine the daily minimum wage rates in the following different regions based on established criteria:  3 National Capital Region (NCR) or Metro Manila Cordillera Administrative Region (CAR) Region 1 - Northern Luzon or Ilocos Region 2 - Cagayan Valley Region 3 - Central Luzon Region 4-A - CALABARZON (Cavite, Laguna, Batangas, Rizal, Quezon) Region 4-B - MIMAROPA (Mindoro, Marinduque, Romb lon, Palawan) Region 5 - Bicol Region 6 - Western Visayas Region 7 - Central Visayas Region 8 - Eastern Visayas Region 9 - Western Mindanao or Zamboanga Peninsula Region 10 - Northern Mindanao Region 11 - Southern Mindanao or Davao Region 12 - Central Mindanao or SOCCSKSARGEN (South Cotabato, North Cotabato, Sultan Kudarat - Sarangani, General Santos) Region 13 - Caraga Autonomous Region in Muslim Mindanao (ARMM) The Regional Wage Orders prescribe the daily minimum wage rate s per industry per locality within the region and in some instances depending on the number of workers and the capitalization of enterprises. The Wage Orders likewise provide the basis and procedure for application for exemption from compliance therefrom. Some Wage Orders grant allowances instead of wage increases. A. Coverage A.1 The wage increases prescribed under Wage Orders apply to all private sector workers and employees receiving the daily minimum wage rates or those receiving up to a certain daily wa ge ceiling, where applicable, regardless of their position, designation, or status of employment, and irrespective of the method by whic h their wages are paid, except workers of duly registered Barangay Micro Business Enterprises (BMBEs) with Certificate of Authority issued by the Office of the Municipal or City Treasurer. A.2 Upon application with and as determined by an RTWPB, based on documentation and other requirements in accordance with applicable rules and regulations issued by the National Wages a nd Productivity  4 Commission (NWPC), a company/establishment may be exempted from compliance with a Wage Order for a period not to exceed one (1) year. B. Minimum Wage Rates DAILY MINIMUM WAGE (MW) National Capital Region As of 05 October 2017 Cities/Municipalities Caloocan, Las Piñas, Makati, Malabon, Mandaluyong, Manila, Marikina, Muntinlupa, Parañaque, Pasay, Pasig, Quezon, San Juan, Taguig, Valenzuela, and Municipalities of Navotas and Pateros New New MW under Basic Wage Basic Minimum Sector/Industry W.O. No. COLA Increase Wage WO Wage NCR-20 a NCR-21 Rates Non-agriculture P481.00 P21.00 P502.00 P10.00 P512.00 Agriculture Plantation 444.00 21.00 465.00 10.00 475.00 Non-plantation 444.00 21.00 465.00 10.00 475.00 Retail/Service Establishments Employing 15 workers or 444.00 21.00 465.00 10.00 475.00 less Manufacturing Establishments Regularly employing 444.00 21.00 465.00 10.00 475.00 less than 10 workers a Additional P21.00 per day into the basic pay under Wage Order NCR-21; COLA of P10.00 per day is retained. The effectivity date is on 5 October 2017.  5 Summary of Current Regional Daily Minimum Wage Rates Non-Agriculture, Agriculture (In Pes os ) ( As of O c to b er 2 01 7) WO No. NON- AGRICULTURE REGION DATE OF EFFECTIVITY AGRICULTURE Plantation Non-Plantation NCR b W O 21/October 05, 2017 ₱475.00 - ₱512.00 ₱475.00 ₱475.00 CAR b/c W O 18/June 5, 2017 270.00 - 300.00 270.00 - 300.00 270.00 - 300.00 I c/d W O 18/October 02, 2016 243.00 - 280.00 252.00 243.00 II d/e W O 18/September 25, 2017 340.00 320.00 320.00 III e/f W O 2 0 / Ma y 0 1 , 2 0 1 7 329.00 - 380.00 314.00 - 350.00 302.00 - 334.00 IV-A f/g W O 17/July 01, 2016 293.00 - 378.50 293.00 - 353.50 293.00 - 333.50 IV-B g/h W O 08/September 24, 2017 247.00 - 290.00 247.00 - 290.00 247.00 - 290.00 V h/i W O 18/June 2, 2017 280.00 - 290.00 280.00 - 290.00 280.00 - 290.00 VI i/j W O 2 3 / Ma r c h 1 6 , 2 0 1 7 271.50 - 323.50 281.50 271.50 VII j/k W O 2 0 / Ma r c h 1 0 , 2 0 1 7 308.00 - 366.00 288.00 - 348.00 288.00 - 348.00 VIII k/l W O 19/February 12, 2017 285.00 251.00 245.00 IX l/m W O 19/October 01, 2016 296.00 283.00 283.00 X m/n W O 19/July 16, 2017 316.00 - 338.00 304.00 - 326.00 304.00 - 326.00 XI n/o W O 19/December 16, 2016 340.00 335.00 335.00 XII o/p W O 19/October 09, 2016 295.00 272.00 272.00 CARAGA p/q W O 14/July 01, 2016 280.00 280.00 280.00 A R MM q / r W O 1 6 / Ma r c h 0 1 , 2 0 1 6 265.00 255.00 255.00 b Granted ₱21 increase in basic pay; maintains ₱10 COLA under W O No. 20 c Granted ₱15 COLA in all areas and ₱10 increase in basic pay in Tabuk City, Bangued, Bontoc, Lagawe, Banaue, Bugias, Bauko, Sagada & Tublay. d Granted ₱12-₱27 increase in basic pay for non-agriculture; ₱19 for plantation; ₱16 for non -plantation; and ₱27 for commercial fishing. e Granted ₱40 increase in basic pay. f Granted ₱16 increase in basic pay. g Integration of SEA & CTPA into the basic pay on 01 July & 01 November, respectively; ₱5 -₱73.50 basic W I by reason o f a r e a c l a s s i f i c a t i o n ( 7 - t r a n c h e ) ; wa g e a d j u s t m e n t o f ₱ 6 - ₱ 1 6 f o r M W wo r k e r s r e c e i v i n g o v e r ₱ 2 8 3. h G r a n t e d ₱ 1 5 i n c r e a s e i n b a s i c p a y f o r e s t a b l i s h m e n t s wi t h 1 0 w o r k e r s & a b o v e t o b e g i v e n i n 2 t r a n c h e s ; & ₱ 4 7 i n c r e a s e f o r e s t a b l i s h m e n t s wi t h l e s s t h a n 1 0 w o r k e r s t o b e g i v e n i n 4 t r a n c h e s. i G r a n t e d i n c r e a s e s i n b a s i c p a y a s f o l l o ws : ₱ 2 5 f o r e s t a b l i s h m e n t s e m p l o y i n g w o r k e r s 1 1 & a b o v e ; ₱ 4 2 f o r e s t a b l i s h m e n t s e m p l o y i n g 1 0 w o r k e r s ' ₱ 3 2 f o r e s t a b l i s h m e n t s em p l o y i n g 1 - 9 w o r k e r s. j G r a n t e d ₱ 2 5 i n c r e a s e i n t h e n o n - a g r i s e c t o r e m p l o y i n g m o r e t h a n 1 0 wo r k e r s a n d ₱ 1 5 f o r a g r i a n d n o n - a g r i establishments employing more than 10 workers. k Granted ₱13 increase in basic pay. l Granted increase in basic pay for the ff: ₱25 (non -agriculture); ₱23 (sugar mills); ₱15 (cottage/handicraft); ₱10 (R/S e m p l o y i n g 1 0 wo r k e r s & b e l o w ) & ₱ 1 5 ( R / S e m p l o y i n g 1 1 - 3 0 ) ; ₱ 1 0 ( a g r i c u l t u r e n o n - s u g a r & s u g a r f a r m ). m Granted ₱16 increase in basic pay for non -agriculture upon effectivity; ₱28 for agri -plantation, ₱48 for agri- nonplantation & ₱48 for cottage/handicraft to be given in 3 tranches; and ₱23 increase for R/S employing not more than 30 workers to be given in 2 tranches. n G r a n t e d ₱ 8 - ₱ 1 5 i n c r e a s e i n b a s i c p a y & ₱ 5 C O L A u p o n e f f e c t i v i t y ; t h e ₱ 5 C O L A wi l l b e i n t e g r a t e d i n t o t h e b a s i c p a y on 01 December 2017. o Granted ₱23-₱29 increase in basic pay and integration of the ₱5 COLA under WO 18 into the basic pay on May 1, 2 0 1 7. A n a d d i t i o n a l ₱ 1 0 i n c r e a s e w i l l b e g i v e n o n M a y 1 , 2 0 1 7 f o r w o r k e r s i n R / S e m p l o y i n g n o t m o r e t h a n 1 0 wo r k e r s. p G r a n t e d ₱ 1 5 - ₱ 2 0 w a g e i n c r e a s e i n b a s i c wa g e a n d i n t e g r a t e d t h e ₱ 5 C O L A u n d e r W O N o. 1 8 i n t o t h e b a s i c wa g e. q Granted ₱7 increase in basic pay upon effectivity and ₱5 COLA effective on 01 October 2016. r G r a n t e d ₱ 1 5 wa g e i n c r e a s e f o r n o n - a g r i c u l t u r e a n d ₱ 5 f o r a g r i c u l t u r e. SOURCE: National W ages and Productivit y Commission  6 C. Basis The basis of the minimum wage rates prescribed by law shall be the normal working hours of eight (8) hours a day. D. Monthly-Paid Employees and Daily-Paid Employees Monthly-paid employees are those who are paid every day of the month, including unworked rest days, special days, a nd regular holidays. Factor 365 days in a year is used in determining the equivalent monthly salary of monthly-paid employees. Daily-paid employees are those who are paid on the days they actually worked and on unworked regular holidays. Computation of the Estimated Equivalent Monthly Rate (EEMR) of Monthly-Paid and Daily-Paid Employees For monthly-paid employees: Factor 365 days in a year is used in determining the equivalent annual and monthly salary of mont hly-paid employees. To compute their Estimated Equivalent Monthly Rate (EEMR), the procedure is as follows: Applicable Daily Rate (ADR) x 365 = EEMR 12 months W here 365 days/year = 298 ordinary working days 52 rest days 12 regular holidays _ 3 special days 365 Total equivalent no. of days/year For daily-paid employees: The following factors and formula may be used in computing the EEMR of different groups of daily-paid employees for purposes of entitlement to minimum wages and allied benefits under existing laws:  7 1. For those who are required to work everyday, including Sundays or rest days, special days and regular holidays Applicable Daily Rate (ADR) x 3 93.5 = EEMR 12 months W here 393.50 days/year = 298 ordinary working days 24 regular holidays x 200% 67.60 52 rest days x 130% 3.90 3 special days x 130% 393.50 Total equivalent no. days/year 2. For those who do not work and are not considered paid on Sunday s or rest days Applicable Daily Rate (ADR) x 313 s = EEMR 12 months W here 313 days/year = 298 ordinary working days 12 regular holidays 3 special days (if considered paid; if actually worked, this is equivalent to 3.9 days) 313 Total equivalent no. of days/year 3. For those who do not work and ar e not considered paid on Saturdays and Sundays or rest days Applicable Daily Rate (ADR) x 261 t = EEMR 12 months W here 261 days/year = 246 ordinary working days 12 regular holidays 3 special days (if considered paid; if actually worked, this is equivalent to 3.9 days) 261 Total equivalent no. of days/year Without prejudice to existing company policies, practic es and/or agreements, the above formula are merely suggestions and may be used as guides in determining the equivalent monthly minimum wage rates. s Factor 310 may be used instead of 313 if the 3 special days are not considered paid t Factor 258 may be used instead of 261 if the 3 special days are not considered paid  8 E. Minimum Wage and Rights of Kasambahay The minimum wage of Kasambahay shall not be less than the following: a) Two thousand five hundred pesos ( P2,500.00 ) a month for those employed in the National Capital Region (NCR); b) Two thousand pesos (P2,000.00 ) a month for those employed in chartered cities and first class municipalities; u and c) One thousand five hundred pe sos (P1,500.00) a month for those employed in other municipalities. After one year from the effectivity of the Batas Kasambahay and periodically thereafter, the Regional Tripartite Wages and Productivity Boards (RTWPBs) shall review and if proper, determi ne and adjust the minimum wage rates of Kasambahay. The RTWPBs shall conduct consultations/hearings with stakeholders prior to the issuance of a wage order. Rights and Benefits of Kasambahay: 1. Minimum wage; 2. Other mandatory benefits, such as the daily and weekly rest periods; 3. Service Incentive Leave; 4. 13th month pay; 5. Freedom from employers’ interference in the disposal of wages; 6. Coverage under the SSS, PhilHealth and Pag -IBIG laws; 7. Standard of treatment; 8. Board, lodging and medical attendance; 9. Right to privacy; 10. Access to outside communication; 11. Access to education and training; 12. Right to form, join, or assist labor organization; 13. Right to be provided a cop y of the employment contract ; 14. Right to certificate of employment ; 15. Right to terminate the employment; and 16. Right to exercise their own religious beliefs and cultural practices. u C A R h a s i n c r e a s e d t h e m i n i m u m wa g e f o r K a s a m b a h a y e f f e c t i v e 1 0 A u g u s t 2 0 1 5 , a s f o l l o ws : ( a ) P 2 , 5 0 0. 0 0 i n chartered cities and first class municipalities, and (b) P2,000.00 in other municipalities pursuant to W age Order No. C A R - DW - 0 1. E a s t e r n V i s a y a s h a s i n c r e a s e d t h e m i n i m u m wa g e f o r K a s a m b a h a y e f f e c t i v e 2 3 M a r c h 2 0 1 6 , a s f o l l o ws : ( a ) P 2 , 5 0 0. 0 0 for those working in chartered cities and first class municipalities, and (b) P2,000.00 in other municipalities pursuant to W age Order No. RB-VIII-01  9 F. Effect of Reduction of Workdays on Wages In situations where the employer has to reduce the number of regular working days to prevent serious losses, such as when there is a substantial slump in the demand for his/her goods or services or when there is lack of raw materials, the employer may deduct the wages corresponding to the days taken off from the workweek, consistent with the principle of “no work, no pay.” This is without prejudice to an agreement or company policy which provides otherwise. G. Penalty and Double Indemnity for Violation of the Prescribed Increases or Adjustments in the Wage Rates (RA 8188) Any person, corporation, trust, firm, partnership, associa tion or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates made in accordance with RA 6727, shall be punished by a fine of not less than Twenty -five Thousand Pesos (P25,000.00) nor more than One Hundred Th ousand Pesos (P100,000.00) or imprisonment of not less than two (2) years nor more than four (4) years, or both such fine and imprisonment at the discretion of the court: Provided, That any person convicted hereof shall not be entitled to the benefits provided for under the Probation Law. The employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits owing to the employees: Provided, That payment of indemnity shall not absolve the employer from the criminal liability imposable hereof. If the violation is committed by a corporation, trust, firm, partnership, association or any other entity, the penalty of imprisonment shall be imposed upon the entity’s responsible officers, including, but not limited to, the president, vice-president, chief executive officer, general manager, managing director or partner. H. Barangay Micro Business Enterprises (BMBEs ) BMBEs or business enterprises engaged in the production, processing or manufacturing of products or commodities includi ng agro-processing, trading and services whose total assets, excluding the land on which the particular business entity’s office, plant and equipment are situated, are  10 not more than Three Million Pesos (P3,000,000) shall be exempt from the coverage of the Minimum Wage Law: Provided, that all employees shall still be entitled to the same benefits given to regular employees such as social security and healthcare benefits. The DTI, through the Negosyo Center in the city or municipality level, shall have the sole power to issue the Certificate of Authority for BMBEs to avail of the benefits provided by R.A. No. 9178, otherwise known as the “Barangay Micro Business Enterprises (BMBEs) Act of 2012”. v The BMBE workers and owners shall agree on the acceptable wa ge rates based on the wage advisories issued by the RTWPBs. I. Minimum Wage of Workers Paid by Results All workers paid by results, including homeworkers and those who are paid on piece rate, takay, pakyaw or task basis, shall receive not less than the prescribed minimum wage rates under the Regional Wage Orders for normal working hours which shall not exceed eight (8) hours a day, or a proportion thereof. The wage rates of workers who are paid by results may be determined through time and motion stu dies or consultation with representatives of employers’ and workers’ organizations in a tripartite called by the DOLE Secretary. J. Minimum Wage of Apprentices, Learners, and Persons with disability Wage of apprentices and learners shall in no case be l ess than seventy-five (75%) percent of the applicable minimum wage rates. Apprentices and learners are those who are covered by apprenticeship and learnership agreements duly approved by the Technical Education and Skills Development Authority (TESDA). A qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, v Section 5 (b) of R.A. No. 10644.  11 fringe benefits or allowances as a qualified able bodied person (Sec. 1 of RA 10524 or the Magna Carta for Persons with disability). K. Coverage from Income Tax of Minimum Wage Earners Effective July 6, 2008, minimum wage earners (MWEs) are exempt from income tax. w The following income of MWEs shall also be exempt from income tax: 1. Statutory Minimum Wage (SMW ) inclusive of the COLA; 2. Holiday pay; 3. Overtime pay; 4. Night shift differential pay; and 5. Hazard pay. w R.A. No. 9504, as implemented by Revenue Regulations No. 10-2008.  12 2 H OLIDAY P AY (Article 94) A. Definition Holiday pay refers to the payment of the regular daily wage for any unworked regular holiday. B. Coverage This benefit applies to all employees except: 1. Government employees, whether employed by the National Government or any of its political subdivisions, including those employed in government-owned and/or controlled corporations with original charters or created under special laws; 2. Those of retail and service establishments regularly employing less than ten (10) workers; 3. Kasambahay and persons in the personal service of another; 4. Managerial employees, if they meet all of the following conditions: 4.1. Their primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof; 4.2. They customarily and regularly direct the work of two or more employees therein; and 4.3. They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to hiring, firing, and promotion, or any other change of status of other employees are given particular weight. 5. Officers or members of a managerial staff, if they perform the following duties and responsibilities: 5.1. Primarily perform work directly related to management policies of their employer; 5.2. Customarily and regularly exercise discretion and independent judgment;  13 5.3. (a) Regularly and directly assist a proprietor or managerial employee in the management of the establishment or subdivision thereof in which he or she is employed; or (b) execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision, special assignments and tasks; and 5.4. Do not devote more than twenty percent (20%) of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs 5.1, 5.2, and 5.3 above. 6. Field personnel and other employees whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. C. Regular Holidays Every employee covered by the Holiday Pay Rule is entitled to the minimum wage rate (daily basic wage and COLA). This means that the employee is entitled to at least 100% of his/her minimum wage rate even if he/she did not report for work, provided he/she is present or is on leave of absence with pay on the work day immediately preceding the holiday. Work performed on that day merits at least twice (200%) t he wage rate of the employee. Illustration: Using the NCR minimum wage rate (basic wage and COLA) of P502.00 + P10.00 per day for the non-agricultural sector, effective October 5, 2017 under Wage Order No. NCR-21. For work within eight (8) hours: Plus 100% of the minimum wage rate of 100% or a total of 200% Sector/Industry Rate Amount P502.00 + Non-agriculture P512 x 200% = P1,024.00 P10 COLA  14 Retail/Service Establishment P465.00 + Not covered or exempted employing less than 10 workers P10 COLA Where the holiday falls on the scheduled rest day of the employee, work performed on said day merits at least an additional 30% of the employee’s regular holiday rate of 200% or a total of at least 260% (Please see 3. Premium Pay). When a regular holiday fal ls on a Sunday, the following Monday shall not be a holiday, unless a proclamation is issued declaring it a special day. Unless otherwise modified by law, order, or proclamation, the following are the twelve (12) regular holidays in a year under Executiv e Order No. 292, as amended by Republic Act 9 849: New Year ’s Day January 1 Maundy Thursday Movable Date Good Friday Movable Date Araw ng Kagitingan Monday nearest April 9 Labor Day Monday nearest May 1 Independence Day Monday neare st June 12 National Heroes’ Day Last Monday of August Eidl Fitr Movable Date Eidl Adha Movable Date Bonifacio Day Monday nearest November 30 Christmas Day December 25 Rizal Day Monday nearest December 30 When Araw ng Kagitingan falls on the same day as Maundy Thursday or Good Friday, a covered employee is entitled to at least two hundred percent (200%) of his/her daily wage even if said day is unworked. Where the employee is required to work on that day, he/she is entitled to an additional 100% of the daily wage. D. Absences 1. All covered employees shall be entitled to holiday pay when they are on leave of absence with pay on the workday immediately preceding the regular holiday. Employees who are on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if they do not work on such regular holiday.  15 2. Employers shall grant the same percentage of the holiday pay as the benefit granted by competent authority in the form of employee’s compensation or social security payment, whichever is higher, if the employees are not reporting for work while on such leave benefits. 3. Where the day immediately preceding the holiday is a non -work day in the establishment or the scheduled rest day of the employee, he/she shall not be deemed to be on leave of absence on that day, in which case he/she shall be entitled to the holiday pay if he/she worked on the day immediately preceding the nonwork day or rest day. E. Successive Regular Holidays Where there are two (2) successive regular holidays, like Maundy Thursday and Good Friday, an employee may not be paid for both holidays if he/she absents himself/herself from work on the day immediately preceding the first holiday, unless he/she wor ks on the first holiday, in which case he/she is entitled to his/her holiday pay on the second holiday. F. Temporary or Periodic Shutdown/Cessation of Work In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with the Rules Implementing the Labor Code, as amended. G. Holiday Pay of Certain Employees 1. Where the covered employee is paid on piece-rate basis, his / her holiday pay shall not be less than his/her average daily earnings for the last seven (7) actual work days preceding the regular holiday; provided, however, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate. 2. Seasonal workers may not be paid the required holiday pay during off - season when they are not at work. 3. Workers who do not have regular working days, such as stevedores, shall be entitled to this benefit.  16 3 P REMIUM P AY (Articles 91-93) A. Definition Premium pay refers to the additional compensation for work performed within eight (8) hours on non -work days, such as rest days and special days. B. Coverage This benefit applies to all employees except: 1. Government employees, whether employed by the National Government or any of its political subdivisions, including those employed in government-owned and/or controlled corporations with original charters or created under special laws; 2. Managerial employees, if they meet all of the following conditions: 2.1. Their primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof; 2.2. They customarily and regularly direct the work of two or more employees therein; 2.3. They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to hiring, firing, and promotion, or any other change of status of other employees are given particular weight. 3. Officers or members of a manage rial staff, if they perform the following duties and responsibilities: 3.1. Primarily perform work directly related to management policies of their employer; 3.2. Customarily and regularly exercise discretion and independent judgment; 3.3. (a) Regularly and directly assist a proprietor or managerial employee in the management of the establishment or subdivision thereof in which he or she is employed; or (b) execute, under general supervision, work along specialized or  17 technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision, special assignments and tasks; and 3.4. Do not devote more than twenty percent (20%) of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs 3.1, 3.2, and 3.3 above. 4. Kasambahay and persons in the personal service of another; 5. Workers who are paid by results, inc luding those who are paid on piece rate, takay, pakyaw, or task basis, and other nontime work, if their output rates are in accordance with the standards prescribed in the regulations, or where such rates have been fixed by the Secretary of Labor and Employment; and 6. Field personnel, if they regularly perform their duties away from the principal or branch office or place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. C. Special Days 1. Special Days Unless otherwise modified by law, order, or proclamation, the following are the three (3) special days in a year under Executive Order No. 292, as amended by Republic Act 9 849 that shall be observed in the Philippines: Ninoy Aquino Day Monday nearest August 21 All Saints Day November 1 Last Day of the Year December 31 The “no work, no pay” principle applies during special days and on such other special days as may be proclaimed by the President or by Congress. Workers who are not required or permitted to work on special days are not entitled to any compensation. This, however, is without prejudice to any voluntary practice or provision in the Collective Bargaining Agreement (CBA) providing for payment of wages and oth er benefits for days declared as special days even if unworked.  18 On the other hand, work performed on special days merits additional compensation of at least thirty percent (30%) of the basic pay or a total of one hundred thirty percent (130%). Where the em ployee works on a special day falling on his rest day, he/she shall be entitled to an additional compensation of at least fifty percent (50%) of his/her basic wage or a total of one hundred fifty percent (150%). 2. Special Work Days For work performed on a declared Special Work Day, an employee is entitled only to his/her daily wage rate. No premium pay is required since work performed on said day is considered work on an ordinary workday. D. Premium Pay Rates The COLA shall not be included in the comp utation of premium pay. The minimum statutory premium pay rates are as follows: 1. For work performed on rest days or on special days: Plus 30% of the daily basic rate of 100% or a total of 130%. Sector/Industry Rate Amount Non-agriculture P502. 00 + P10 COLA P502 x 130% = P652.60 Retail/Service Establishment P465. 00 + P10 COLA P465 x 130% = P604.50 2. For work performed on a rest day which is also a special day: Plus 50% of the daily basic rate of 100% or a total of 150%. Sector/Industry Rate Amount Non-agriculture P502. 00 + P10 COLA P502 x 150% = P753.00 Retail/Service Establishment P465. 00 + P10 COLA P465 x 150% = P697.50 3. For work performed on a regular holiday which is also the employee’s rest day (not applicable to employees who are not covered by the holiday-pay rule). Plus 30% of the regular holiday rate of 200% based on his/her daily basic wage rate or a total of 260%. Sector/Industry Rate Amount (P512 x 200%) + 30% Non-agriculture P502. 00 + P10 COLA (P502 x 200%) = P1,325.20 Retail/Service Establishment Not covered by holiday pay P465. 00 + P10 COLA employing less than 10 workers rule  19 4 O VERTIME P AY (Article 87) A. Definition Overtime pay refers to the additional compensation for work performed beyond eight (8) hours a day. B. Coverage Same as those covered under 3. Premium Pay. C. Overtime Pay Rates The COLA shall not be included in the computation of overtime pay. The minimum overtime pay rates vary according to the day the overtime work is performed, as follows: 1. For work in excess of eight (8) hours performed on ordinary working days: Plus 25% of the hourly rate. Sector/Industry Rate Amount P502.00 + P502/8 x 125% = P62.75 x 125% x number Non-agriculture of hours OT w ork P10 COLA Retail/Service P465.00 + P465/8 x 125% = P58.13 x 125% x number Establishment P10 COLA of hours OT w ork 2. For work in excess of eight (8) hours performed on a scheduled rest day or a special day: Plus 30% of the hourly rate on said days. Sector/Industry Rate Amount P502.00 + P502/8 x 130% x 130% = P62.75 x 130% x Non-agriculture P10 COLA 130% x number of hours OT w ork Retail/Service P465.00 + P465/8 x 130% x 130% = P58.13 x 130% x Establishment P10 COLA 130% x number of hours OT w ork  20 3. For work in excess of eight (8) hours performed o n a special day which falls on a scheduled rest day: Plus 30% of the hourly rate on said days. Sector/Industry Rate Amount P502.00 + P502/8 x 150% x 130% = P62.75 x 150% x Non-agriculture P10 COLA 130% x number of hours OT w ork Retail/Service P465.00 + P465/8 x 150% x 130% = P58.13 x 150% x Establishment P10 COLA 130% x number of hours OT w ork 4. For work in excess of eight (8) hours performed on a regular holiday: Plus 30% of the hourly rate on said days. Sector/Industry Rate Amount P502.00 + P502/8 x 200% x 130% = P62.75 x 200% x Non-agriculture P10 COLA 130% x number of hours OT w ork Retail/Service Establishment P465.00 + Not covered by the rule on holiday pay employing less P10 COLA than 10 workers 5. For work in excess of eight (8) hours performed on a regular holiday which falls on a scheduled rest day: Plus 30% of the hourly rate on said days. Sector/Industry Rate Amount P502.00 + P502/8 x 260% x 130% = P62.75 x 260% x Non-agriculture P10 COLA 130% x number of hours OT w ork Retail/Service Establishment P465.00 + Not covered by the rule on holiday pay employing less P10 COLA than 10 workers D. Stipulated Overtime Rates Generally, the premium pay for work performed on rest days, special days, or regular holidays is in cluded as part of the regular rate of the employee in the computation of overtime pay for overtime work rendered on said days, especially if the employer pays only the minimum overtime rates prescribed by law. The employees and employer, however, may stip ulate in their collective agreement the payment for overtime work at rates higher than those provided by law.  21 5 N IGHT S HIFT D IFFERENTIAL (Article 86) A. Definition Night Shift Differential (NSD) refers to the additional compensation of ten percent (10%) of an employee’s regular wage for each hour of work performed between 10 p.m. and 6 a.m. B. Coverage This benefit applies to all employees except: 1. Government employees, whether employed by the National Government or any of its political subdivisions, including those employed in government-owned and/or controlled corporations with original charters or created under special laws; 2. Those of retail and service establishments regularly employing not more than five (5) workers ; 3. Kasambahay and persons in the personal service of another; 4. Managerial employees, if they meet all of the following conditions: 4.1. Their primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof; 4.2. They customarily and regul arly direct the work of two or more employees therein; and 4.3. They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to hiring, firing, and promotion, or any other change of status of other employees are given particular weight. 5. Officers or members of a managerial staff, if they perform the following duties and responsibilities: 5.1. Primarily perform work directly related to management policies of their employer; 5.2. Customarily and regularly exercise discretion and independent judgment;  22 5.3. (a) Regularly and directly assist a proprietor or managerial employee in the management of the establishment or subdivision thereof in which he or she is employed; or (b) execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision, special assignments and tasks; and 5.4. Do not devote more than twenty percent (20%) of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs 5.1, 5.2, and 5.3 above; 6. Field personnel and those whose time and performance are unsupervised by the employer. C. Computation of Night Shift Differential The COLA shall not be included in the computation of night shift pay. The table below may be used to guide computations: Work on: Pay equals Ordinary day 100% or 1 Sunday or rest day 130% or 1.3 Special day 130% or 1.3 Special day falling on rest day 150% or 1.5 Regular Holiday 200% or 2 Regular Holiday falling on rest day 260% or 2.6 Double holiday 300% or 3 Double holiday falling on rest day 390% or 3.9 Ordinary day, night shift 1 x 1.1 = 1.1 or 110% Rest day, night shift 1.3 x 1.1 = 1.43 or 143% Special day, night shift 1.3 x 1.1 = 1.43 or 143% Special day, rest day, night shift 1.5 x 1.1 = 1.65 or 165% Regular Holiday, night shift 2 x 1.1 = 2.2 or 220% Regular Holiday, rest day, night shift 2.6 x 1.1 = 2.86 or 286% Double holiday, night shift 3 x 1.1 = 3.3 or 330% Double holiday, rest day,night shift 3.9 x 1.1 = 4.29 or 429% Ordinary day, overtime (OT) 1 x 1.25 = 1.25 or 125% Rest day, overtime 1.3 x 1.3 = 1.69 or 169%  23 Special day, overtime 1.3 x 1.3 = 1.69 or 169% Special day, rest day, overtime 1.5 x 1.3 = 1.95 or 195% Regular Holiday, overtime 2 x 1.3 = 2.6 or 260% Regular Holiday, rest day, overtime 2.6 x 1.3 = 3.38 or 338% Double holiday, overtime 3 x 1.3 = 3.9 or 390% Double holiday, rest day, overtime 3.9 x 1.3 = 5.07 or 507% Ordinary day, night shift, overtime 1 x 1.1 x 1.25 = 1.375 or 137.5% Rest day, night shift, overtime 1.3 x 1.1 x 1.3 = 1.859 or 185.9% Special day, night shift, overtime 1.3 x 1.1 x 1.3 = 1.859 or 185.9% Special day, rest day, night shift, OT 1.5 x 1.1 x 1.3 = 2.145 or 214.5% Regular Holiday, night shift, OT 2 x 1.1 x 1.3 = 2.86 or 286% Reg. Holiday, rest day, night shift, OT 2.6 x 1.1 x 1.3 = 3.718 or 371.8% Double holiday, night shift, OT 3 x 1.1 x 1.3 = 4.29 or 429% Double holiday, rest day, night shift, OT 3.9 x 1.1 x 1.3 = 5.577 or 557.7% The minimum night shift pay rates vary according to the day the night shift work is performed. Sector/Industry Rate Amount P502.00 + P502/8 x *110% = P62.75 x Non-agriculture P10 COLA 110% x number of hours w ork Retail/Service Establishment P465.00 + P465/8 x *110% = P58.13 x employing 15 workers or less P10 COLA 110% x number of hours w ork * This value may be substituted based on the above rates depending on the day the night shift work is performed.  24 6 S ERVICE C HARGES (Article 96) A. Sharing All rank-and-file employees of employers collecting service charges are entitled to an equal share in the eighty-five percent (85%) of the total of such charges. The remaining fifteen percent (15%) of the charges may be retained by management to answer for losses and breakages and for distribution to managerial employees, at the discretion o f the management in the latter case. Service charges are collected by most hotels and some restaurants, nightclubs, cocktail lounges, among others. B. Payments The shares of the employees in the service charges shall be distributed to them once every t wo (2) weeks or twice a month at intervals not exceeding sixteen (16) days. Where the company stopped collecting service charges, the average share previously enjoyed by the employees for the past twelve (12) months immediately preceding such stoppage sha ll be integrated into their basic wages. C. Tips Where a restaurant or similar establishment does not collect service charges but has a practice or policy of monitoring and pooling tips given voluntarily by its customers to its employees, the pooled tip s should be monitored, accounted, and distributed in the same manner as the service charges.  25 7 S ERVICE I NCENTIVE L EAVE (Article 95) A. Coverage Every employee who has rendered at least one (1) year of service is entitled to Service Incentive Leave (SIL ) of five (5) days with pay. This benefit applies to all employees except: 1. Government employees, whether employed by the National Government or any of its political subdivisions, including those employed in government-owned and/or controlled corporations with original charters or created under special laws; 2. Persons in the personal service of another; 3. Managerial employees, if they meet all of the following conditions: 3.1. Their primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof; 3.2. They customarily and regularly direct the work of two or more employees therein; and 3.3. They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to hiri ng, firing, and promotion, or any other change of status of other employees are given particular weight. 4. Officers or members of a managerial staff, if they perform the following duties and responsibilities: 4.1. Primarily perform work directly related to management policies of their employer; 4.2. Customarily and regularly exercise discretion and independent judgment; 4.3. (a) Regularly and directly assist a proprietor or managerial employee in the management of the establishment or subdivision thereof in which he or she is employed; or (b) execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision, special assignments and tasks; and  26 4.4. Do not devote more than twenty percent (20%) of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs 4.1, 4.2, and 4.3 above; 5. Field personnel and those whose ti me and performance is unsupervised by the employer; 6. Those already enjoying this benefit; 7. Those enjoying vacation leave with pay of at least five (5) days; and 8. Those employed in establishments regularly employing less than ten (10) employees. B. Meaning of “one year of service” The phrase “one year of service” of the employee means service within twelve (12) months, whether continuous or broken, reckoned from the date the employee started working. The period includes authorized absences, unworked weekly rest days, and paid regular holidays. If through individual or collective agreement, company practice or policy, the period of the working days is less than twelve (12) months, said period shall be considered as one year for the purpose of determinin g the entitlement to the service incentive leave. C. Usage/Conversion to Cash The service incentive leave may be used for sick and vacation leave purposes. The unused service incentive leave is commutable to its money equivalent at the end of the year. In computing, the basis shall be the salary rate at the date of conversion. The use and conversion of this benefit may be on a pro rata basis. x Illustration: An employee was hired on 1 January 2000 and resigned on 1 March 2001. Assuming that he/she has not used or commuted any of his/her accrued SIL, he/she is entitled to the conversion of his/her accrued SIL, upon his/her resignation, as follows: SIL earned as of 31 December 2000 5 days Proportionate SIL for January and February 2001 (2/12) x 5 days 0.833 day Total accrued SIL as of 1 March 2001 5.833 days x Based on the opinion of DOLE Legal Service.  27 8 M ATERNITY L EAVE (RA 1161, as amended by RA 8282) A. Coverage This benefit applies to all female employees, whether marri ed or unmarried. B. Entitlement Every pregnant employee in the private sector, whether married or unmarried, is entitled to maternity leave benefit of sixty (60) days in case of normal delivery or miscarriage, or seventy -eight (78) days, in case of Caesarian section delivery, with benefits equivalent to one hundred percent (100%) of the average daily salary credit of the employee as defined under the law. To be entitled to the maternity leave benefit, a female employee should be an SSS member employed at the time of her delivery or miscarriage; she must have given the required notification to the SSS through her employer; and her employer must have paid at least three monthly contributions to the SSS within the twelve -month period immediately before the date of the contingency (i.e., childbirth or miscarriage). The maternity leave benefit, like other benefits granted by the Social Security System (SSS), is granted to employees in lieu of wages. Thus, this may not be included in computing the employee’s th irteenth-month pay for the calendar year.  28 9 P ATERNITY L EAVE (RA 8187) A. Coverage Paternity Leave is granted to all married male employees in the private sector, regardless of their employment status (e.g., probationary, regular, contractual, project basis). The purpose of this benefit is to allow the husband to lend support to his wife during her period of recovery and/or in nursing her newborn child. Government employees are also entitled to the paternity leave benefit. They shall be governed by th e Civil Service rules. B. The Paternity Leave Benefit Paternity leave benefit shall apply to the first four (4) deliveries of the employee’s lawful wife with whom he is cohabiting. For this purpose, “cohabiting” means the obligation of the husband and w ife to live together. If the spouses are not physically living together because of the workstation or occupation, the male employee is still entitled to the paternity leave benefit. The paternity leave shall be for seven (7) calendar days, with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if any, provided that his pay shall not be less than the mandated minimum wage. Usage of the paternity leave shall be after the delivery, without prejudice to an employer ’s policy of allowing the employee to avail of the benefit before or during the delivery, provided that the total number of days shall not be more than seven (7) calendar days for each covered delivery.  29 C. Conditions for Entitlement A married male employee shall be entitled to paternity leave benefit provided that he has met the following conditions: 1. He is an employee at the time of the delivery of his child; 2. He is cohabiting with his spouse at the time that she gives birth or suffers a miscarriage; 3. He has applied for paternity leave with his employer within a reasonable period of time from the expected date of delivery by his pregnant spouse, or within such period as may be provided by company rules and regulations, or by collective bargaining agreem ent; and 4. His wife has given birth or suffered a miscarriage. D. Application for Paternity Leave The married male employee shall apply for paternity leave with his employer within a reasonable period of time from the expected date of delivery by his pregnant spouse, or within such period as may be provided by company rules and regulations, or by collective bargaining agreement. In case of a miscarriage, prior application for paternity leave shall not be required. E. Non-conversion to Cash In the event that the paternity leave is not availed of, it shall not be convertible to cash and shall not be cumulative. F. Crediting of Existing Benefits 1. If the existing paternity leave benefit under the collective bargaining agreement, contract, or company poli cy is greater than seven (7) calendar days as provided for in RA 8187, the greater benefit shall prevail. 2. If the existing paternity leave benefit is less than that provided in RA 8187, the employer shall adjust the existing benefit to cover the differenc e. Where a company policy, contract, or collective bargaining agreement provides for an emergency or contingency leave without specific provisions on paternity leave, the employer shall grant to the employee seven (7) calendar days of paternity leave.  30 10 P ARENTAL LEAVE FOR S OLO P ARENTS (RA 8972) A. Coverage Parental leave for solo parents is granted to any solo parent or individual who is left alone with the responsibility of parenthood due to: 1. Giving birth as a result of rape or, as used by the law, other crimes against chastity; 2. Death of spouse; 3. Spouse is detained or is serving sentence for a criminal conviction for at least one (1) year; 4. Physical and/or mental incapacity of spouse as certified by a public medical practitioner; 5. Legal separation or de facto separation from spouse for at least one (1) year: Provided that he/she is entrusted with the custody of the children; 6. Declaration of nullity or annulment of marriage as decreed by a court or by a church: Provided, that he/she is entrusted with the custody of the children; 7. Abandonment of spouse for at least one (1) year; 8. Unmarried father/mother who has preferred to keep and rear his/her child/children, instead of having others care for them or give them up to a welfare institution; 9. Any other person who solely provides parental care and support to a child or children: Provided, that he/she is duly licensed as a foster parent by the Department of Social Welfare and Development (DSWD) or duly appointed legal guardian by the court; and 10. Any family member who assumes the responsibility of head of family as a result of the death, abandonment, disappearance, or prolonged absence of the parents or solo parent: Provided, that such abandonment, disappearance, or prolonged absence lasts for at least one (1) year.  31 B. Definition of Terms “Parental leave” shall mean leave benefits granted to a solo parent to enable him/her to perform parental duties and responsibilities where physical presence is required. “Child” refers to a person living with and dependent on the solo parent for support. He/she is unmarried, unemployed, and below eighteen (18) years of age, or even eighteen (18) years old and above but is incapable of self-support because he/she is mentally- and/or physically-challenged. C. The Parental Leave Benefit The parental leave, in addition to leave privileges under existing laws, shall be for seven (7) work days every year, with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if any, provided that his/her pay shall not be less than the mandated minimum wage. D. Conditions for Entitlement A solo parent employee shall be entitled to the parental leave, provided that: 1. He/she has rendered at least one (1) year of service, whether continuous or broken; 2. He/she has notified his/her employer that he/she will avail himself/herself of it, within a reasonable period of time; and 3. He/she has presented to his/her employer a Solo Parent Identification Card, which may be obtained from the DSW D office of the city or municipality where he/she resides. E. Nonconversion to Cash In the event that the parental leave is not availed of, it shall not be convertible to cash, unless specifically agreed on previously.  32 F. Crediting of Existing Leave If there is an existing or similar benefit under a company policy or a collective bargaining agreement, the same shall be credited as such. If the same is greater than the seven (7) days provided for in RA 8972, the greater benefit shall prevail. Emergency or contingency leave provided under a company policy or a collective bargaining agreement shall not be credited as compliance with the parental leave provided for under RA 8972. G. Termination of the Benefit A change in the status or circumstance of the parent claiming the benefit under the law, such that he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for this benefit. H. Protection Against Work Discrimination No employer shall discriminate against any solo parent employee with respect to terms and conditions of employment on account of his/her being a solo parent.  33 11 L EAVE FOR V ICTIMS OF V IOLENCE AGAINST W OMEN AND T HEIR C HILDREN (RA 9262) A. Definition “Violence against women and their children,” as u sed in Republic Act 9262 (the “Anti-Violence Against Women and Their Children Act of 2004”), “refers to any act or a series of acts committed by any person against a woman who is his wife, former wife, or against a woman with whom the person has or had a sexual or dating relationship, or with whom he has a common child, or against her child whether legitimate or illegitimate, within or without the family abode, which will result in or is likely to result in physical, sexual, psychological harm or suffering, or economic abuse including threats of such acts, battery, assault, coercion, harassment or arbitrary deprivation of liberty.” B. Coverage and Purpose Private sector women employees who are victims as defined in RA 9262 shall be entitled to the paid l eave benefit under such terms and conditions provided herein. The leave benefit shall cover the days that the woman employee has to attend to medical and legal concerns. C. Requirement for Entitlement To be entitled to the leave benefit, the only requ irement is for the victim-employee to present to her employer a certification from the barangay chairman (Punong Barangay) or barangay councilor (barangay kagawad) or prosecutor or the Clerk of Court, as the case may be, that an action relative to the matt er is pending.  34 D. The Benefit In addition to other paid leaves under existing labor laws, company policies, and/or collective bargaining agreements, the qualified victim - employee shall be entitled to a leave of up to ten (10) days with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if any. The said leave shall be extended when the need arises, as specified in the protection order issued by the barangay or the court. E. Usage of the Benefit The usage of the ten-day leave shall be at the option of the woman employee. In the event that the leave benefit is not availed of, it shall not be convertible into cash and shall not be cumulative.  35 12 S PECIAL L EAVE FOR W OMEN (RA 9710) A. Coverage Any female employee regardless of age and civil status shall be entitled to a special leave benefit under such terms and conditions provided herein. B. Definition of Term “Gynecological disorders” refers to disorders that would require surgical procedures such as, but not limited to dilatation and curettage and those involving female reproductive organs such as the vagina, cervix, uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor, as certified by a competent physician. It shall als o include hysterectomy, ovariectomy and mastectomy. C. Conditions for Entitlement 1. She has rendered at least six (6) months continuous aggregate employment service for the last twelve (12) months prior to surgery; 2. She has filed an application for special leave with her employer within a reasonable period of time from the expected date of surgery or within such period as may be provided by company rules and regulations or collective bargaining agreement; and 3. She has undergone surgery due to gynecological disorders as certified by a competent physician. D. The Special Leave Benefit The employee is entitled to special leave benefit of two (2) months with full pay based on her gross month ly compensation.  36 Gross monthly compensation refers to the monthly basic pay plus mandatory allowances fixed by the regional wage boards. E. Usage The special leave shall be granted to the qualified employee after she has undergone surgery without prejudice to an employer allowing an employee to receive her pay before or durin g the surgery. F. Nonconversion to Cash The special leave shall be non-cumulative and non-convertible to cash unless otherwise provided by a collective bargaining agreement (CBA).  37 13 T HIRTEENTH -M ONTH P AY (PD 851) A. Coverage All employers are required to pay their rank and file employees thirteenth-month pay, regardless of the nature of their employment and irrespective of the methods by which their wages are paid, provided they worked for at least one (1) month during a calendar year. The t hirteenth- month pay should be given to the employees not later than December 24 of every year. B. Definition of Rank-and-File Employees The Labor Code, as amended, distinguishes a rank -and-file employee from a managerial employee. A managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign, or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definition are considered rank-and-file employees. The above distinction shall be used as guide for the purpose of determining who are rank-and-file employees entitled to the thirteenth - month pay. C. Minimum Amount The thirteenth-month pay shall not be less than one -twelfth (1/12) of the total basic salary earned by an employee in a calendar year. The "basic salary" of an employee for the purpose of computing the thirteenth-month pay shall include all remunerations or earnings paid by his or her employer for services rendered. It does not include allowances  38 and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night shift differential and holiday pay, and cost of living allowance (COLA). However, these salary - related benefits should be included as part of the basic salary in the computation of the thirteenth -month pay if these are treated as pa rt of the basic salary of the employees, through individual or collective agreement, company practice or policy. D. Formula And Computation of 13 t h Month Pay Total basic salary earned during the year = proportionate 12 months 13 t h month pay Illustration: Using the basic wage in the National Capital Region at P481.00 (from January 1, 2017 to October 4, 2017) and P502.00 (from October 5, 2017 to December 31, 2017) y per day and a six-day workweek or an equivalent Monthly Basic Salary of P12,546.08 and P13,093.83, respectively, to wit: January no absence P12,546.08 February no absence P12,546.08 March 1day leave w/pay P12,546.08 April no absence P12,546.08 May 2 days leave w/pay P12,546.08 June 2 days leave w/pay P12,546.08 July no absence P12,546.08 August 2 days leave w/pay P12,546.08 September on maternity leave z no salary October on maternity leave no salary November no absence P13,093.83 December 5 days leave w/o pay P10,583.83 Total basic salary earned for the year P124,046.30 P124,046.30 = P10,337.20 is the proportionate 12 months 13 t h month pay y COLA of P15.00 under Wage Order Nos. NCR -18 and NCR-19 is not included in the basic salary in computing 13 th month pay z The 2 months of maternity leave are not included in the computation of 13th month pay because the female employee has no earnings from the company for the period.  39 E. Exempted Employers The following employers are not covered by PD 851: 1. The government and any of its political subdivisions, including government-owned and controlled corporations, except those corporations operating essentially as private subsidiaries of the government; 2. Employers who are already paying their employees thirteenth - month pay or more in a calendar year or its equivalent at the time of the issuance of PD 851; 3. Persons in the personal service of another in relation to such workers; and 4. Employers of those who are paid on purely commission, boundary or task basis, and those who are p aid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof (except those workers who are paid on piece -rate basis, in which case their employer shall grant them thirteenth -month pay). As used herein, “workers paid on piece-rate basis” shall refer to those who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same. The term "its equivalent" as use d in item D.2 above shall include Christmas bonus, midyear bonus, cash bonuses, and other payments amounting to not less than one -twelfth (1/12) of the basic salary but shall not include cash and stock dividends, cost of living allowance, and all other allowances regularly enjoyed by the employee, as well as nonmonetary benefits. F. Time of Payment of Thirteenth -Month Pay The thirteenth-month pay shall be paid not later than December 24 of every year. An employer, however, may give to his or her employee s one- half (1/2) of the thirteenth-month pay before the opening of the regular school year and the remaining half on or before December 24 of every year. The frequency of payment of this monetary benefit may be the subject of an agreement between the empl oyer and the recognized/collective bargaining agent of the employees.  40 G. Thirteenth-Month Pay for Certain Types of Employees 1. Employees who are paid on piecework basis are entitled to the thirteenth-month pay. 2. Employees who are paid a fixed or guarantee d wage plus commission are also entitled to the thirteenth -month pay, based on their earnings during the calendar year (i.e., on both their fixed or guaranteed wage and commission). In the consolidated cases of Boie Takeda Chemicals, Inc. vs. Dionisio de la Serna, G.R. No. 92174 December 10, 1993, and Philippine Fuji Xerox Corporation vs. Cresenciano B. Trajano and Philippine Fuji Xerox Employees Union, G.R. No. 102552 December 10, 1993, the Supreme Court ruled that commissions, while included in the gener ic term wage, are not part of "basic salary/wage" and therefore should not be included in computing the thirteenth -month pay. Thus: In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the fixed or guaranteed wage is patently the "basic salary" for this is what the employee receives for a standard work period. Commissions are given for extra efforts exerted in consummating sales or other related transactions. They are, as such, additional pay, which this Court has made clear do not form part of the "basic salary" (228 SCRA 329 ). 3. Employees with multiple employers Government employees working part -time in a private enterprise, including private educational institutions, as well as employees working in two or more private firms, whether on full-time or part-time basis, are entitled to the thirteenth - month pay from all their private employers, regardless of their total earnings from each of their employers. H. Thirteenth-Month Pay of Resigned or Separated Employee An employee who has resigned or whose services are terminated at any time before the time of payment of the thirteenth -month pay is entitled to this monetary benefit in proportion to the length of time he or she has worked during the year, reckoned from the time he or she has started working during the calendar year up to the time of his or her resignation or  41 termination from the service. Thus, if he or she worked only from January to September, his or her proportionate thirteenth -month pay should be equal to one-twelfth (1/12) of his or her total basic salary earned during that period. I. Non-inclusion in Regular Wage The thirteenth-month pay is not part of the regular wage of employees for purposes of determining overtime and premium payme nts, fringe benefits, contributions to the State Insurance Fund, Social Security System, National Health Insurance Program, and private retirement plans. J. Coverage from Income Tax of the 13 t h Month Pay 13 t h month pay and other benefits, such as productivity incentives a nd Christmas bonus, not exceeding Eighty-Two Thousand Pesos (P82,000.00) are exempt from taxation. aa Revenue Regulations No. 3-2015, which implements R.A. No. 10653, emphasized that the amount of P82,000.00 shall only apply to the 13th month pay and other benefits prescribed under the provisions of Section 2.78.1 (B) (11) of RR No. 2-98, as amended, and shall in no case apply to other compensation received by an employee under an employer -employee relationship, such as basic salary and other allowances. aa Section 32 B, Chapter VI of R. A. No. 8424 (National Internal Revenue Code of the Philippines), as amended by Sec. 1 of R. A. No. 10653.  42 14 S EPARATION P AY (Articles 298-299 bb) Separation pay is given to employees in instances covered by Articles 298 and 299 (formerly Articles 283 and 284) of the Labor Code of the Philippines. An employee’s entitlement to separation pay depends on th e reason or ground for the termination of his or her services. An employee may be terminated for just cause (i.e., gross and habitual neglect of duty, fraud, or commission of a crime), and other similar causes as enumerated under Article 297 (formerly Article 282) of the Labor Code and, generally, may not be entitled to separation pay. cc On the other hand, where the termination is for authorized causes, separation pay is due. A. One-Half (1/2) Month Pay per Year of Service An employee is entitled to recei ve a separation pay equivalent to one - half (1/2) month pay for every year of service, a fraction of at least six (6) months being considered as one (1) whole year, if his/her separation from the service is due to any of the following authorized causes: 1. Retrenchment to prevent losses (i.e., reduction of personnel effected by management to prevent losses); 2. Closure or cessation of operation of an establishment not due to serious losses or financial reverses; and 3. W hen the employee is suffering from a disease not curable within a period of six (6) months and his/her continued employment is prejudicial to his/her health or to the health of his/her co -employees. In no case will an employee get less tha n one (1) month separation pay if the separation is due to the above stated causes. bb Formerly Articles 283-284 renumbered pursuant to DOLE Department Advisory No. 1, Series of 2015 issued on 21 July 2015. cc The Supreme Court has ruled in certain cases that separation pay shall be granted the workers.  43 B. One-Month Pay per Year of Service An employee is entitled to separation pay equivalent to his/her one - month pay for every year of service, a fraction of at least six (6) months being considered as one whole year, if his/her separation from service is due to any of the following: 1. Installation by employer of labor -saving devices; 2. Redundancy, as when the position of the employee has been found to be excessive or unnecess ary in the operation of the enterprise; and 3. Impossible reinstatement of the employee to his or her former position or to a substantially equivalent position for reasons not attributable to the fault of the employer, as when the reinstatement ordered by a competent authority cannot be implemented due to closure or cessation of operations of the establishment/employer, or the position to which he or she is to be reinstated no longer exists and there is no substantially equivalent position in the establishment to which he or she can be assigned. dd C. Notice of Termination The employer may terminate the employment of any employee due to the above-mentioned authorized causes by serving a written notice on the employee and the Department of Labor and Employment through its regional office having jurisdiction over the place of business at least one (1) month before the intended date thereof. D. Basis of Separation Pay The computation of separation pay of an employee shall be based on his/her latest salary rate. E. Inclusion of Regular Allowance in the Computation In the computation of separation pay, it would be error not to integrate the allowance with the basic salary. The salary base properly used in computing the separation pay should include not just the basic salary but also the regular allowances that an employee has been receiving. ee dd Gaco vs. NLRC, et al., G.R. No. 104690, February 23, 1994. ee Planters’ Products, Inc. vs. NLRC, G.R. No. 78524, January 20, 1989.  44 F. Coverage from Income Tax of Separation Pay Exempted from taxation is the separation pay received by an employee as a result of his/her separation from the service of the employer due to death, sickness or other physical disability or for other cause beyond the control of said employee such as retrenchment, redundancy or cessation of business operations. ff ff