Module 6 - Compensation and Benefits for Private and Public Sector PDF

**Module 6 - Compensation and Benefits for Private and Public Sector** Salary Standardization Law & Compensation and Benefits in the Public Sector Salary Standardization Law of 2015 - It is a legislative measure to modify the compensation and position classification system of civilian gover...

**Module 6 - Compensation and Benefits for Private and Public Sector** Salary Standardization Law & Compensation and Benefits in the Public Sector Salary Standardization Law of 2015 - It is a legislative measure to modify the compensation and position classification system of civilian government personnel and the base pay schedule of military and uniformed personnel. - It was approved by President Benigno Aquino III. - Senate President Franklin M. Drilon and Senate Finance Committee chairperson Loren Legarda co-author the proposed measure (Senate Bill 3009) - The basis for the proposed compensation adjustment of the SSL 2015 is the Compensation and Benefits Study for the Public Sector. Compensation and Benefits Study for the Public Sector - It is a survey carried out by the DBM pursuant to its mandate to administer the compensation and position classification system of the government under Presidential Decree No. 985 and Republic Act No. 6758 or Salary Standardization Law I. - The DBM engaged the services of Towers Watson who offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. - The objectives of the study are: - To compare the competitiveness of government pay in relation to the private sector. - To craft a compensation strategy to bring government pay closer to market rates. Guiding Principle of SSL 2015 - Payment of just and equitable compensation to government personnel in accordance with the principle of equal pay for work of equal value. - Comparability of civilian government pay with those in the private sector. - Rationalized and standardized compensation across all government agencies. - Adoption of a performance-based incentive scheme. Parameter of SSL 2015 - Minimum basic salary (SG 1) shall be raised from Php 9,000 to Php 11,068 a month. - Compensation shall be adjusted to at least 70% of the market for all salary grades. - To recognize differences in duties and responsibilities, there shall be no salary overlaps. Main Objective of the SSL 2015 - To be competitive with the market thereby attract and retain talent. - Strengthen the link between pay and performance. - Reduce costs of benefits (i.e. GSIS premiums and PhilHealth contributions) while maximizing the benefits to employees. - Allow higher take home pay, especially for government personnel belonging to lower salary grades. Executive Order No. 201, s. 2016 Modifying the Salary Schedule for Civilian Personnel and Authorizing the Grant of Additional Benefits for Both Civilian and Military and Uniformed Personnel Coverage: - All civilian personnel in the Executive, Legislative, and Judicial Branches, Constitutional Commissions and Constitutional Offices, GOCCs not covered by RA 10149, and LGUs - Military personnel of the DND Step Increment (Executive Order No. 164) - Officials and employees of national government agencies (NGAs) including state universities and colleges (SUCs), government-owned or controlled corporations (GOCCs), government financial institutions (GFIs) and local government units (LGUs) - under permanent status - regular plantillas of agencies - A one-step increment shall be granted to officials and employees for every 3 years of continuous satisfactory service in their present positions. - An employee may progress from step 1 to step 8 of the salary grade allocation of his/her position in recognition of meritorious performance based in a Performance Management System. How much will SSL cost from 2016 to 2019? Php 225.82 Billion Personnel Economic Relief Allowance (PERA) Budget Circular No. 2011-2 - Coverage: - All civilian government employee occupying regular, contractual and casual status, whether elective or appointive, rendering full-time or part-time basis. - Payment: - Paid only when basic pay is also paid. - Php 2,000 per month provided they render full-time services for 8 hours per working day, 22 working days per month, inclusive of leave of absence with pay. Subsistence, Laundry, and Quarters Allowances (SLQA) - Under the Magna Carta Benefits of Public Health Workers pursuant to R.A. No. 7305. Hazard Pay - It is to protect and promote the welfare of public servants by providing them with additional compensation taking into account the nature of their responsibilities and exposure to hazard or possible dangers pertaining to their positions. - Coverage All employees and officials of the government shall be paid hazard pay when stationed or assigned to work in or under the following circumstances or conditions: - Hazardous or less hazardous areas - Difficult areas or hardship posts characterized by distance, inconvenience of travels due to bad roads and conditions of the terrain, isolation, inaccessibility and extreme weather conditions - Stations which offer risks to health and safety due to exposure to radiation, contagious diseases and volcanic activity - Institutions that tend or care for mentally deranged patients - Those in prison reservations and penal colonies without adequate police protection - Plants and installation of the arsenal - Aboard aircraft and watercraft in crossing bodies of water and Computation of Hazard Pay Longevity Pay - A monthly longevity pay equivalent to 5% of the present monthly basic pay shall be paid to public health workers for every 5 years of continuous, efficient and meritorious services rendered as certified by the Head of Agency or Local Chief Executives commencing after the approval of the Act (April 17, 1992). Presentation and Transportation Allowance (RATA) - RATA is a collective term for two distinct but complementary allowance. Both allowances are provided to select government official to cover related expenses incidental to and in connection with the actual performance of their respective functions. Medicare Sharing (Philhealth Sharing) - The new sharing scheme, which was implemented starting last month, is divided to the medical department (50%) that would include doctors, hospital administrator, medical director, chief nurse, head of billing section, medical social services and the personnel officer who handles the accounts of Philhealth. - The other 50% is divided among the rank-and-file employees (75%), senior nurses, supervisors and quality teams (15%) and all hospital department heads who are members of the management circle (10%). Night Differential Pay - Compensation premium granted to government personnel whose regular working hours fall wholly or partly within 6:00 PM to 6:00 AM of the following day. - Hourly Basic Rate -- the basic salary rate per hour derived by dividing the monthly rate by 22 working days, and dividing the quotient derived in by-S hours. - 20% of the hourly basic rate of the employees. 13^th^ Month Pay (Mid-Year Allowance) - Coverage: All positions in the government whether regular, casual or contractual in nature, elective or appointive. - Guidelines: - Equivalent to one-month basic pay as of May 15. - Rendered at least a total or an aggregate of four months of service from July 1 of the immediately preceding year to May 15 of the current year. - Remains to be in the government service as of May 15 of the current year. - With at least a satisfactory performance rating in the immediately preceding rating period. 14^th^ Month Pay (Year-End Allowance) and Cash Gift - Coverage: All government employees whether regular, casual or contractual in nature, elective or appointive. - Guidelines: - Year-end bonus equivalent to one month salary as of October 31 and Cash Gift of Php 5000 -- given not earlier than November 15 of the current year - Conditions: - Must have rendered at least a total or aggregate of four months of service from January 1 to October 31 of the current year. - Must remain in the service as of October 31 of the same year. Clothing Allowance - Section 40 of the General Provisions of R.A. No. 10155, the Fiscal Year (FY) 2012 General Appropriations Act (GAA), provides that appropriations for each department, bureau, office, or agency may be used for uniform or clothing allowance of employees at not more than Php 5000 per annum subject to the rules and regulations issued by the DBM. Productivity Enhancement Incentives - Pursuant to Executive Order (E.O.) No. 201, s. 2016 - beginning FY 2016, the productivity Enhancement Incentives shall be given not earlier than December 15 of every year to all qualified government employees at Php 5000 each for the purpose of improving the government employee's productivity. - Exclusions - Consultants and experts hired for a limited period to perform specific activities or services with expected outputs. - Laborers hired through job contracts (pakyaw) and those paid on piecework basis. - Student workers and apprentices - Individuals and groups of people whose services are engaged through job orders, contracts or service, or others similarly situated. Collective Negotiating Agreement - Administrative Order (A.O.) No. 1351, s. 2005 - Collective Negotiating Agreement (CAN) Incentive may be granted to both management and rank-and-file employees of agencies with approved and successfully implemented CNAs in recognition of their efforts in accomplishing performance targets at lesser cost, in attaining more efficient and viable operations through cost-cutting measures and systems improvement. Performance Based Bonus - Subject to the achievement by departments/agencies of performance targets and compliance with good governance and other conditions. - Based on a progressive rate system as the position and responsibility goes higher so does the amount of PBB. Loyalty Award - The provision for the cash gift component of the Loyalty Award for qualified officials and employees, in addition to the loyalty memorabilia/souvenir, on the occasion of the incumbent's milestone year. - 10^th^ year anniversary and every 5 years thereafter - Shall be computed at Php 500 but not more than Php 1000 for every year of service, in accordance with CSC MC No. 06, s. 2002 Anniversary Bonus - The provision for Anniversary Bonus (Ab) at Php 3000 per qualified personnel shall be made only on the occasion of the agency's milestone year. - 15^th^ anniversary and every 5 years thereafter Overtime Pay - A duly authorized work rendered beyond the regularly scheduled normal hours of work, such as work during the day beyond the 8 hours work required from daily paid workers or work during the week beyond the 40 hours of work required from monthly paid workers. Honoraria - Shall be paid to the following personnel subject to the guidelines issued by the DBM. - Coverage: - Teaching personnel of the DepEd, TESDA, SUCs, and other educational institutions with excess and outside their teaching load. - Lecturers, resource persons, coordinators, and facilitators in seminars. - Chairs and members of Commissions/Boards/Councils. - Those involved in science and technological activities who render services beyond their regular workload. - Officials and employees assigned to special projects. - The rates of honoraria shall depend on the level of responsibilities, nature of work rendered, and extent of individual contribution to produce the desired outputs. The total honoraria received from all special projects shall not exceed 25% of the annual basic salary. Magna Carta Benefits - Honoraria for assignment in special projects - Honoraria for lecturers and resource persons - Per diem - Hazard pay - Subsistence allowance - Laundry allowance - Free quarters - Longevity pay - Salary increase for retirement and terminal leave benefit purposes Salary Grade Increase Prior to Retirement - Upon retirement, personnel shall automatically be granted one salary grade higher than his/her basic salary and retirement benefits shall be computed on the basis of the highest salary received, pursuant to s. 14 of R.A. No. 8439 Salary Step Increment for Completion of a Post Graduate Degree - In line with s. 34^th^ of R.A. No. 7305, a PHW who holds a position in the agency plantilla of regular positions and who completes a master's or doctoral degree related to the performance of the duties and responsibilities of his/her position after at least two years of service as PHW, may be entitled to one step increase to be integrated into the basic salary, in recognition of his/her efforts towards professional advancement. Types of Leaves - Vacation leave -- 13 VL - Sick leave -- 12 days of SL - Privilege leave -- 3 days (birthday, and other special events) - Maternity leave -- 60 calendar days leave - Paternity leave -- all married male employees are eligible for 7 working days - Bereavement leave -- 3 days - Solo Parent leave -- 7 working days - Leave for victims of VAWC -- 10 days Monetization of Leave Credits - Officials and employees, in the career and non-career service whether permanent, temporary, casual or coterminous, who have accumulated 15 days of vacation leave credits shall be allowed to monetize a minimum of 10 days. Provided, that at least 5 days is retained after monetization and provided that a maximum of 30 days may be monetize in a given year (CSC MC 41, s. 1998) - Section 23 Monetization of 50% of VL/SL Credits may be allowed for valid and justifiable reasons subject to the discretion of the agency head and the availability of funds. Terminal Leave - Agencies shall also use BP Form 205 to reflect the terminal leave benefits of FY 2019 retirees. TLB of compulsory retirees whether permanent or casual, shall be computed separately from those of optional retirees. - Computation: TLB = S x D x CF TLB -- terminal leave benefit S -- highest monthly salary received D -- no. of accumulated VL and SL credits CF -- constant factor is 0.0481927 GSIS, Philhealth, and Pag-IBIG - GSIS -- section 11 of the Revised Implementing Rules and Regulations of R.A. 8291 approved on June 23 2010 under Board Resolution No. 88 provides that the rate of contribution payable by the member and the government agency shall be 9% and 12%, respectively, based on the actual monthly salary of the member. - Philhealth - Pag-IBIG -- every employee, employer, members, OFWs must take note the latest Pag-IBIG Contribution Table 2018 below to aid and be aware how much you are paying to Pag-IBIG Fund every month. The usual payment is Php 100 following the maximum compensation set to Php 5000 Compensation and Benefits in the Private Sector Compensation -- is a systematic approach to providing monetary value to employees in exchange for work performed. \- may achieve several purposes assisting in recruitment, job performance, and job satisfaction. \- is a tool used by management for a variety of purposes to further the existence of the company. Compensation may be adjusted according to the business needs, goals, and available resources. \- may be used to: - recruit and retain qualified employees - increase or maintain morale/satisfaction - reward and encourage peak performance - achieve internal and external equity - reduce turnover and encourage company loyalty - modify (through negotiations) practices of unions Social Security Benefits (R.A. 1161, as amended by R.A. 8282) - Coverage: A private employee, whether permanent, temporary or provisional. - Benefits: sickness, maternity, disability, retirement, death and funeral - Reminder to employer: An ER who does not report his/her EEs, regardless of status of employment is violating the SSS law. Meanwhile, an HR who does the same can be sued for violation. If found guilty, the ER/HR is liable to the EEs and must: - Pay the benefits of those who die, became disabled, get sick or reach retirement age - Pay all unpaid contributions plus a penalty of 3% per month - Be held liable for a criminal offense punishable by fine and/or imprisonment. Benefits Under the Employee's Compensation Program (PD 626) - This is a government program designed to provide a compensation package to public and private sector employees or their dependents in the event of work-related sickness, injury, disability, or death. - Coverage: - The ECP covers all workers in the formal sector - Coverage in the ECP starts on the first day of employment - Employees in the private sector who are compulsory members of the SSS, with employer-employee relationship - Benefits: - Loss of income benefit - Medical benefit - Rehabilitation services - Carer's allowance - Death and funeral Pag-IBIG Benefits (R.A. No. 9679) - The maximum monthly compensation used in computing the employee contributions is currently set at Php 5000. This means that the maximum member contribution and employer counterpart per month are both currently Php 100. - Benefits: - Savings - Short term loans - Housing programs Service Incentive Leave - Coverage: - Every employee who has rendered at least one year of service whether continuous or broken - 5 days with pay - May be used for SL and VL purposes - Commutable to its money equivalent at the end of the year Maternity Leave (R.A. 11210)  Paternity Leave (R.A. 8187) - Coverage: Granted to all married male employees in the private sector, regardless of their employment status (e.g. probationary regular, contractual, project basis) - Shall apply to the first four deliveries of the employee's lawful wife with whom he is cohabiting - 7 days - Not convertible and non-cumulative - Conditions: - He is an employee at the time of the delivery of his child - He is cohabiting with his spouse at the time that she gives birth or suffers a miscarriage - He has applied for paternity leave with his employer within a reasonable period of time from the expected date if delivery by his pregnant spouse, or within such period as may be provided by company rules and regulations, or by collective bar gaining agreement - His wife has given birth or suffered a miscarriage Parental Leave for Solo Parents (R.A. 8972) - 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. - Abandonment of spouse for at least one year. - Unmarried father/mother who has preferred to keep and rear his/her child or children, instead of having others care for them or give them up to a welfare institution - Any other person who solely provides parental care and support to a child or children. Provided, that he/she is dule licensed as a foster parent by DSWD or duly appointed legal guardian by the court. - Any family member who assumes the responsibility of head is the 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 year. Leave for victims of VAWC (R.A. 9262) Special Leave for Women (R.A. 9710) - Coverage: All female employee regardless of age and civil status. - 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 during the surgery. - 2 months - Not convertible and non-cumulative - Conditions: - She has rendered at six months continuous aggregate employment service for the last 12 months prior to surgery. - 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 collective bargaining agreement. - She has undergone surgery due to gynecological disorders as certified by a competent physician.