If you work in the Philippines, you should read this article to learn about your rights and advantages. According to Presidential Decree No., the Labor of the Philippines, all employee-employer interactions, as well as their rights and duties, are governed by the Labor of the Philippines.
- Minimum Wage per region and/or sector.
We have a statute called “The Pay Rationalization Act” that specifies the minimum wage rates that apply to each location, province, and industry sector. The minimum salary may differ based on the number of employees, revenue sales, and industrial sector of the firm. - Overtime
Employees must work a minimum of 40 hours per week, or 8 hours per day, as required by law. A 60-minute mandated lunch break is also required, which is not included in the 8-hour workday.
If an employee works more than the specified hours, he or she is entitled to overtime pay.
Overtime per regular will be paid at a variable rate depending on work days and schedule.
a. Regular working day – + 25% of the hourly rate
b. Rest day, declared as Regular & Special Holiday – + 30% of the hourly rate
- Premium Pay
If your employer allows you to work on the following circumstances, you will be entitled to overtime or premium pay.- Regular Holiday – Employees are entitled to receive 200 percent of their daily wage if they are required to work on a declared regular holiday by their employer. Hourly rate x 200 percent x 8 hours is the formula.
- Regular Holiday but it is your rest day – If your employer has asked you to work on a proclaimed Regular holiday although it is your rest day, you are entitled to 260 percent of the daily rate. Hourly rate 260 percent x 8 hours is the formula.
- Special Non Working Holiday – Employees are entitled to receive 130 percent of their daily rate if they are asked to work on a declared non-special working day by their employer. Hourly rate x 130 percent x 8 hours is the formula.
Take note: On special non-working days and any other special days announced by the President of the Philippines, there is a “no labor, no pay” rule that applies. Workers who are not required or allowed to work on specific days are not entitled to pay. This is not to say that any voluntary practice or collective bargaining agreement (CBA) that provides for the payment of salary and benefits on declared special days, even if they are not worked, is invalid. - Special Non Working Holiday but it is your rest day – If your employer asks you to work on a proclaimed non-special working day yet it is your rest day, you are entitled to get 150 percent of the day rate. Hourly rate x 150 percent x 8 hours is the formula.
- Regular Holiday – Employees are entitled to receive 200 percent of their daily wage if they are required to work on a declared regular holiday by their employer. Hourly rate x 200 percent x 8 hours is the formula.
- Night Shift Differential
Employees who work between the hours of 10:00 p.m. and 6:00 a.m. are charged a Night Shift Pay Fee. For each labor hour, an extra ten percent premium fee is charged.
- The 13th Month Pay
13th Month Pay is a monetary benefit mandated by the government to all rank-and-file employees. It is one-twelfth of the employee’s annual wage, and it is paid no later than December 24th.
According to the Department of Labor, all rank and file employees who have worked for at least a month are entitled to a 13th month salary, regardless of the nature of their work or employment. It was signed under Presidential Decree No. 851, which requires businesses and employers to offer 13th-month compensation to their employees.
To know how to wisely spend your 13th Month, read this: https://workrelatedph.com/business/what-is-13th-month-pay-and-wise-tips-on-how-to-spend-it/
- Separation Pay
If the employee got terminated except if terminated due to misconduct or crime involvement, the employee is entitled to receive separation pay with below conditions:- 1/2 Month Pay per Year of Service – An employee is eligible for separation pay with the value of one-half (1/2) month pay for every year of service if the separation is due to retrenchment to save the company from pitfalls, closure or termination of operations due to bankruptcy or other bad instances, and grave illness incurable within 6 months or harmful to coworkers.
- One-Month Pay per Year of Service – If the contract is terminated due to: the installation of devices or machines that reduce the number of labors, redundancy, or excessive manpower, or the impossibility of reinstatement to the former position due to significant reasons, an employee is entitled to one-month pay per year of service.
- 1/2 Month Pay per Year of Service – An employee is eligible for separation pay with the value of one-half (1/2) month pay for every year of service if the separation is due to retrenchment to save the company from pitfalls, closure or termination of operations due to bankruptcy or other bad instances, and grave illness incurable within 6 months or harmful to coworkers.
- Retirement Pay
Employees in the private sector may retire at any time between the ages of 60 and 65, when retirement becomes mandatory, and must have worked for the company for at least 5 years.
For each year of service, retirement pay must be at least half of a month’s wage, and a portion of at least 6 months is consequently deemed one entire year.
Other benefits, such as a Collective Bargaining Agreement, can be included in retirement pay depending on the agreements between the business and the employee (CBA). - Parental Leaves
- Maternity Leave – Each pregnant employee, whether married or not, is entitled to a maternity leave benefit of 60 days for a normal delivery or miscarriage, or 78 days for a caesarean delivery, for up to four pregnancies, regardless of marital status.
The employee receives a portion of his regular monthly wage from the employer during his maternity leave, which is thereafter compensated by the SSS. It is typical for employers to pay the entire normal salary and shoulder any costs not covered by the Social Security system.
- Maternity Leave – Each pregnant employee, whether married or not, is entitled to a maternity leave benefit of 60 days for a normal delivery or miscarriage, or 78 days for a caesarean delivery, for up to four pregnancies, regardless of marital status.
To be eligible for maternity leave, an employee must be registered with the Social Security Administration (SSS) and employed at the time of the scheduled delivery. Furthermore, the employer must notify the SSS, and the employee must have made at least three monthly contributions to the SSS in the previous year.
The maternity leave benefit cannot be included in an employee’s 13th month wage because it is given instead of a regular wage.
- Paternity Leave – For up to four pregnancies, all married male employees are entitled to a seven-day paternity leave for the birth or miscarriage of his legitimate spouse with whom he must live. Paternity leave is paid for by the employer and is not covered by the Social Security system.
- Solo Parent Leave – In addition to parental leaves at the time of a child’s birth, the Philippine labor code includes a unique leave for single-parent employees, as detailed in Republic Act No. 8972, the Solo Parents Welfare Act. To be eligible for a solo-parent leave, the employee must have worked for at least a year and be eligible for at least 7 working days off per year.
- Gross Benefits & De-Minimis Benefits – Employers frequently pay monetary or in-kind compensations to employees to recognize their performance and create incentives. These benefits are tax-free under specific conditions, according to Philippine regulations.
- Benefits received are excluded from gross income computation as long as it is less than P82,000, according to the tax rules. The 13th month pay, Christmas bonuses, productivity and incentive bonuses, and other perks of the same sort in cash or in kind are examples of “gross benefits.”
- Furthermore, small-value compensations, known as De Minimis Benefits, are removed from gross income calculations. Employees’ well-being and efficiency are promoted by De Minimis Benefits, which are limited to small-scale amenities or privileges.
- De Minimis Benefits include:
- Monetized unused vacation leave credits, maximum of 10 days per year.
- Medical cash allowance to dependents of employees, maximum of P750 per semester of P125 per month.
- Rice subsidy, up to P1,500.
- Uniform and clothing allowance, up to P5,000 per year.
- Actual medical benefits, up to P10,000 per year.
- Laundry allowance, up to P300 per month.
- Employee achievement awards (loyalty reward, safety reward…) in forms other than cash or gift certificates, and in a maximum value of P10,000 per year in accordance with an established plan which does not discriminate to favour highly paid employees.
- SSS or Social Security System – It is intended to provide security for private employees against death, burial expenses, maternity leave, permanent disability, retirement, sickness, and forced separation/unemployment benefits. Visit https://www.sss.gov.ph for additional information.
If you work for the government, the equivalent is the Government Service Insurance System (GSIS).
How to Apply SSS Loan? https://workrelatedph.com/business/how-to-apply-a-loan-in-sss/
How to get SSS number?
https://workrelatedph.com/business/how-to-apply-and-get-sss-number-online/ - PhilHealth – Philippine Health Insurance Corporation (PhilHealth), which assists in the payment of a sufficient medical aide in the Philippines. Visit www.philhealth.gov.ph for additional information.
How to get PhilHealth Number: https://workrelatedph.com/business/how-to-get-a-philhealth-number/ - PagIbig, also known as Home Development Mutual Fund (HDMF), is popularly known as Pag-IBIG Fund. This benefit is designed to assist you in saving money when it comes to providing housing loans to both government and private sector employees, as well as self-employed individuals. Visit https://pagibigfund.gov.ph for more information.
How to get Pag-Ibig Number:
https://workrelatedph.com/business/how-to-get-your-pag-ibig-number/ - DOLE – The Department of Labor and Employment (DOLE) is a federal department tasked with developing and implementing policies and programs, as well as serving as the Executive Branch’s policy-advisory arm in the field of labor and employment. DOLE
Takeaways
As an employee, you should always know your benefits as an employee.