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Last updated on: August 28th, 2023
Labor Requirements
The Labor Law in the Philippines is regulated mainly by the Labor Code. The laws govern the terms and conditions of employment such as working hours except for government employees, managerial employees, field personnel, family members of the employer who are dependent for support, domestic help, individuals who provide personal service to others, workers given wages/salary based on the Secretary of Labor regulations.
The constitution, presidential decrees, and executive orders, acts of Congress are the laws that govern holidays and rest periods, wages, overtime, annual leave, special leaves & other employment relationships.
Hours & Pay Regulations
Normal Working Hours
The normal working hours of an employee shall not exceed more than 8 hours exclusive break per day. No employee shall work more than 5 days in a week except where the urgency of the work requires to work for 6 days or 48 hours in a week.
In such cases employees shall be entitled to an additional compensation of at least 30% of their regular wage for work performed on the 6th day.
Working hours shall include all time during which an employee is required to be on duty and/or to be at a prescribed workplace; or time during which an employee is permitted to work; and rest periods of short duration during working hours. Labor Code of the Philippines, Article 83 – 84.
Recording Requirement
An employer shall maintain records of employment contracts, daily time records, payment slips, leaves taken, women-related compliances, and any other records requirement as per law. Employers shall keep and maintain these records for at least 3 years and shall be available for access or produce a hard copy of documents as requested by the labor inspector.
Employers will be liable for criminal action if they refuse to give access to the records, work premises, or employees during the inspection or investigation. Article 128 of the Labor Code.
Overtime
Overtime work is defined as any work performed outside of the regular working hours i.e. 8 hours per day.
Emergency Overtime Work – An employee may be required to perform overtime work in an emergency situation like a national emergency, to prevent loss of life or property during natural calamities, urgent work to be performed on machines, installations, or equipment to avoid serious loss or damage, prevent loss or damage to perishable goods; and the completion or continuation of the work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer.
Undertime Not Offset by Overtime – Undertime work on a business day cannot be made up by working overtime the next day. The law forbids the offset because when an employee works fewer than 8 hours, the hourly rate of overtime is higher than the hours missed. This means that if an employee leaves work early, he cannot be made to work overtime the next day to make up for those hours.
In case an employee receives permission to take leave on a specific day, the employer is still required to pay for any additional compensation or overtime work done previously or in the future.
Pay– An employee shall be entitled to a premium of 25% of their regular wage.
If overtime work is performed i.e. more than 8 hours on a holiday or rest day then an employee shall be entitled to an additional premium equivalent to the rate of the first 8 hours plus at least 30% thereof. Labor Law, Art 87, 88, 89.
Night Work
Night work is defined as work performed between 10 p.m. and 6 a.m. The employee who performs work during the night shall work a minimum of 7 consecutive hours per night.
Employers shall mandate upon the request of the night employee to undergo a health assessment without charge and to receive advice on how to reduce or avoid health problems associated with their work. A night employee who is certified by a competent physician as unfit to render night work due to health reasons shall be transferred whenever practicable to a job for which they are fit to work or a similar or equivalent position.
Employees who are unable to render night work for a continuous period of not less than 6 months upon the certification of a competent public health authority shall be granted the same company benefits as other employees who are unable to work due to illness. In addition, a night employee shall be certified as temporarily unfit for night work for a period of less than 6 months and shall be given the same protection against dismissal or notice of dismissal as other employees who are prevented from working for health reasons.
Pay- An employee is entitled to premium pay of 10% of the regular wage for each hour of work.
If overtime work falls within the nighttime period, premiums for overtime work should be integrated into the regular hourly rate of the employee before computing night-shift pay i.e. employees receive a 25% premium for overtime work plus their regular pay rate. If overtime falls within the night period, a 10% night premium is applied to the combined overtime premium and regular pay (10% of 25% premium + regular pay). Labor Law, Art 86, RA 10151.
Breaks
An employee is entitled to not less than 60 minutes of unpaid break for their regular meals. During day shifts, this time off is usually at 12:00 p.m. Rest periods of short duration or coffee breaks of 5 to 20 minutes, if provided, shall be considered paid time. Labor Code of the Philippines, Article 85.
Weekly Rest
An employer shall provide a rest period of not less than 24 consecutive hours after every 6 consecutive normal workdays. However, the employee shall consider the employee’s preference as to their weekly rest day based on religious grounds. Labor Code of the Philippines, Article 91 – 93.
Work On Rest Days
When an employer may require work on a rest day
The employer may require their employees to work on any day if an emergency caused by accident, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety; urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer; abnormal pressure of work due to special circumstances; prevent loss or damage to perishable goods; nature of the work requires continuous operations, or under other circumstances analogous or similar to the foregoing as determined by the Labor Authorities.
Pay for Work on Weekly Rest – Where an employee is made or permitted to work on their scheduled rest day, they shall be paid an additional compensation of at least 30% of their regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is the established rest day.
When the nature of the work of the employee is such that an employee has no regular work days and no regular rest days can be scheduled, they shall be paid an additional compensation of at least 30% of the regular wage for work performed on Sundays and holidays.
Pay for Overtime on Weekly Rest – Overtime on a rest day shall be paid an additional compensation of at least 30% of a regular wage.
Public Holidays
The Philippines recognizes various holidays that are categorized as either regular holidays or special (nonworking) days. Employees are entitled to the following 8 paid holidays:
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- New Year’s Day – January 1
- Maundy Thursday
- The Day of Valor – (Bravery Day) – April 9
- Good Friday
- Labor Day – May 1
- Independence Day – June 11
- Christmas Day – December 25
- Rizal Day – December 30
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In addition, the government each year announces several special holidays, which may change from year to year. These include:
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- Chinese New Year
- Festival of Sacrifice
- End of Ramadan
- Ninoy Aquino Day
- National Heroes Day
- All Saint’s Day
- Bonifacio Day
- Christmas Eve
- Last Day of the Year
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Right to Holiday Pay
Every employee shall be paid their regular daily wage during regular holidays, except in retail and service establishments regularly employing less than 10 employees.
The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice their regular rate.
“Holiday” includes New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December, and the day designated by law for holding a general election.
Special Working Holidays
An employee who works on a special working holiday is entitled only to their basic rate. No premium pay is required since work performed on said days is considered work on ordinary working days. Following are some of the common special working days –
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- All Soul’s Day
- Christmas Eve
- Last day of the year
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Successive Regular Holidays
In case of 2 successive regular holidays, like Maundy Thursday and Good Friday, an employee may not be paid for both holidays, if absent from work on the day immediately preceding the first holiday, unless they work on the first holiday, in which case they are entitled to holiday pay (100% of the regular wages) on the second holiday.
For example – In case, Thursday and Friday are both holidays, and an employee is absent on Wednesday, in such a scenario, the employee will not get paid for both holidays unless they worked on Wednesday. But, if an employee has worked on Thursday, then shall be paid for the holiday on Friday.
Considering the same scenario, but the employee is absent on both Wednesday and Thursday, in such a case they will not get paid for Friday.
Double Holiday
A double holiday happens when there are two holidays that fall on the same day. For example, if Araw ng Kagitingan falls on the same day as Maundy Thursday or Good Friday. Labor Code of the Philippines, Article 94.
Rule of Absences for Holidays
In case, an absent employee is paid the workday immediately preceding a regular holiday, then they shall be entitled to holiday pay for regular holidays. An absent employee is said to be paid when they have applied for leave for the day’s absence and the same was approved by the employer.
The same rule applies even in the case of successive holidays. If an absent employee is paid for the workday immediately preceding a regular holiday, then they shall be entitled to holiday pay for successive holidays. And, if an absent employee is not paid for the workday immediately preceding a regular holiday, but performs work on the first regular holiday, in such case, they shall be entitled to holiday pay for the next holiday.
Payment of Wages on a Regular Holiday
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- An employee who does not work on a regular holiday is entitled to be paid 100% of their salary for that day. [basic wage x 100%]
- An employee who works on a regular holiday is entitled to 200% of their salary for that day. [basic wage x 200%]
- An employee who works more than 8 hours (overtime work) on a holiday shall be paid an additional 30% of the hourly rate.
- (Hourly rate of basic wage x 200% x 130%x no of hours worked)
- An employee who works on a regular holiday which falls on their rest day shall be paid an additional 30% of the daily rate of 200%.(Basic wage x 200% x 130).
- An employee who works for more than 8 hours(overtime) during a regular holiday which falls on their rest day, shall be paid an additional 30% of the hourly rate. (Hourly rate of basic wage x 200% x 130% x 130%x no of hours worked).
- An employee who works the night shift on a regular holiday shall be paid at an additional 10% of the daily rate of 200%.
- An employee who works overtime on the night shift on a regular holiday shall be paid an additional 30% of the daily rate of 200%, in addition to wages for the night shift.
- An employee who works the night shift on a regular holiday which falls on the day shall be paid at the daily rate of 200%, in addition to wages for the night shift.
- An employee who works overtime on the night shift on a regular holiday, which falls on their rest day, shall be paid an additional 30% of their daily rate of 200%, in addition to wages for the night shift.
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RT- Regular time
NOTE: When a regular holiday falls on a Sunday, the following Monday shall not be a holiday, unless an order is issued declaring it a special day.
Payment of Wages on a Special Holiday
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- An employee who does not work on a special holiday will not be paid unless any collective agreement exists for payment on such a holiday.
- An employee who works on a special day shall be paid an additional 30% of their basic wage for the first 8 hours.
- An employee who works in excess of 8 hours(overtime) on a special holiday shall be paid an additional 30% of their hourly rate on that day.
- An employee who works on a special day that falls on their rest day shall be paid an additional 50% of the basic wage for the first 8 hours.
- An employee who works overtime on a special day that falls on their rest day shall be paid an additional 30% of the hourly rate on that day.
- An employee who works the night shift on a special holiday shall be paid in addition to the daily wage of 130% in addition to wages for the night shift.
- An employee who works overtime during the night shift on a special holiday shall be paid an additional 30% in addition to wages for the night shift.
- An employee who works the night shift on a special holiday which falls on the rest day shall be paid at the rate of 150% in addition to wages for the night shift.
- An employee who performs overtime work during the night shift on a special holiday shall be paid an additional 30% of the work on a rest day 150% in addition to wages for the night shift.
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Payment of Wages on a Double Holiday
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- An employee who does not work on a double holiday shall be paid at the rate of 100% of their daily wage. [basic wage x 100%].
- An employee who reports to work on a double holiday shall be paid 200% of the regular wage. [basic wage x 200%].
- An employee who works overtime on a double holiday shall be paid an additional 30% of the daily rate of 300%. [Hourly rate of the basic wage x 200% x 130% x number of hours worked].
- An employee who works on a double holiday that falls on rhe rest day shall be paid an additional 30% of his/her daily rate of 300%. [basic wage x 200%] + [30% (basic wage x 200%)].
- An employee who works overtime on a double holiday which falls on his/her rest day shall be paid an additional 30% for his/her work rate of 390%. [Hourly rate of the basic wage x 200% x 130% x 130% x number of hours worked].
- An employee who works the night shift on a double holiday is paid at the rate of 330%.
- An employee who works on the night shift on a double holiday which falls on his/her rest day shall be paid an additional 30% of the daily rate of 300% in addition to wages for the night shift.
- An employee who works overtime during the night shift on a double holiday shall be paid an additional 30% of the daily rate of 300% in addition to wages for the night shift.
- An employee who works overtime during the night shift on a double holiday which falls on his/her rest day shall be paid an additional 30% of their work at 390% in addition to wages for the night shift.
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Annual Leave
Duration of Annual Leave – An employee who has provided 1 year of service is entitled to yearly service incentive leave of at least 5 calendar days with pay.
Exceptions: This does not apply to employees who have been provided vacation with pay of at least 5 days and those employed in establishments with less than 10 employees, or exclusively exempted from grant of this leave to employees by the Secretary of Labor and Employment. Labor Code of the Philippines, Article 95.
Special Leave
The Labor Code does not provide for sick leave, but employers usually provide this through collective bargaining agreements. Employees who have used up or do not have any sick leave but have made at least 3 months of contributions into the Social Security System in the prior 12 months and whose injury or illness leaves them unable to work for at least 4 days are eligible for the social security sickness benefit.
The sickness benefit pays about 90 % of the average salary for up to 120 days in a calendar year. Republic Act, No. 8282, 1997, § 14.
A pregnant employee is entitled to paid leave for a period of 105 days with an option to extend for an additional 30 days without pay. If the pregnant employee is a solo parent, the leave can be extended for an additional 15 days with full payment. The compulsory leave post-childbirth shall not be less than 60 days.
Women who suffer a miscarriage or have an emergency termination can take up to 60 days of maternity leave with full payment. The Leave shall be taken as a single, uninterrupted period at the time of the child’s birth.
Allocation of maternity leave credits – A female employee can allocate 7 paid days to the child’s father, irrespective of the marital status. In case of death of the female employee or permanent incapacity, the balance of her maternity leave benefits shall accrue to the father of the child or to a qualified caregiver.
Breastfeeding Break – A nursing employee shall be granted paid breaks in addition to the regular time off for meals to breastfeed their child. The duration of the break shall not be less than 40 minutes for every 8 hours of working time including the time which the employee takes to go to the lactation station from the workplace and return back. Republic Act No.11210 § 2 – 9 and 12.
A male employee is entitled to a paid paternity leave for a period of 7 days. The leave can only be used for the employee’s first four children. The married father of the child is entitled to as many as 14 days of paid leave. Republic Act No. 8187 § 2.
Solo parents defined as single parents, parents otherwise left alone with the responsibility of parenthood because of the disability or imprisonment of a spouse or abandonment by a spouse or another family member who alone assumes responsibility for the care of a child are entitled to 7 working days of paid leave a year after their first year of service with an employer. Employers must also accommodate solo parents through such measures as flexible work schedules and cannot discriminate against them. Republic Act No. 8972 § 8.
An employee who is a victim of violence and whose children (under the age of 18) also experience violence shall be entitled to up to 10 working days of paid absence. Republic Act No. 9262.
A woman employee who undergoes surgery caused by gynecological disorders is entitled to a special leave benefit of up to 2 months with full pay, provided the employee has provided continuous aggregate service of at least 6 months in the last 12-month period. Republic Act No. 9710 § 18.
