Category Archives: Salaries and Benefits Rules

Ebooks on Night Shift and Overtime Pay and Leave Benefits

Title:    All you need to know about… Employee Leave Benefits Leave Benefits Ebook

 Synopsis:     “Leave Benefits” refer to absences an employee is allowed to take for various reasons, authorized by law.  It is called a benefit because ordinarily, an employee who avails of a leave benefit is entitled to go on leave and still get paid while on a time off.  Otherwise, all other absences may not be paid by the employer under the “No Work, No Pay” policy of labor laws.

The new book on leave benefits by Atty. Elvin B. Villanueva is a compact yet complete guide on Leave Benefits and is available in ebook form, which makes it even easier to read. 

With an ebook, you save time when looking for what you need and get the exact legal provisions because everything that you need to know has been sifted, lifted and packaged in this electronic pocket guide. This book is also ideal for people on the go. 

 Author Atty. Elvin Villanueva discusses the topic complete with the latest laws and rules and cites actual cases decided by the Supreme Court,  in a language easily understood by the ordinary reader.   

Ebook Topics:  

  • Service Incentive Leave,
  • Maternity,
  • Paternal,
  • Gynecological leave,
  • VAWC leave and other employee leave benefits required by law. 

 Price:  Php397.00 per eBook, ordered and  delivered online. Click here to order your copy.

Author:  Atty. Elvin Villanueva, LVS Publishing

Also available, Ebook on Night Shift and Overtime Pay. Click here to order your copy.

Can a Company Retire Employees Below Legal Age Limit?

As a rule, the compulsory age of retirement is 65 while optional retirement starts at 60.  Employers, however, are allowed to enter into agreements for early retirement below these age limits but they must be able to show, if questioned later, that their retirement plans or agreements were voluntarily accepted by the employees.

Without proof of voluntary consent, a retirement made on the basis of this early retirement plan may be considered invalid as a “deprivation of property without due process of law.”

This was the Supreme Court’s decision in a case where a company retired its former clerk-typist at the age of 47 on the basis of a non-contributory retirement plan which gave the company the option to retire employees who have rendered at least 20 years of service.

After finding that the retirement plan was not embodied in a CBA or in any employment contract or agreement freely consented by the employee, the Supreme Court ruled that  the early retirement was invalid and constituted illegal dismissal.  (Cercado vs. UNIPROM, Inc. GR No. 188154, Oct. 13, 2010)

About 13th Month Pay

When the last quarter or ‘-ber’ months of the year come in, thoughts of 13th month pay enter the minds of both employers and employees.  This mandatory payment under a specific law (PD851) generally covers all rank and file employees who have worked for at least one (1) month during the calendar year.

Read more about it here.

Who are considered managerial employees

Night shift differential pay is additional pay given to all employees with certain exceptions such as managerial employees and officers and members of managerial staff.

For purposes of determining exceptions to the night shift differential pay, the following are considered managerial employees, they meet the following conditions:

  1. Their primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof.
  2. They customarily and regularly direct the work of two or more employees therein.
  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.

The following are considered officers or members of a managerial staff, if they perform the following duties and responsibilities:

  1. Primarily perform work directly related to management policies of their employer
  2. Customarily and regularly exercise discretion and independent judgment
  3. 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  execute, under general supervision, work along specialized or technical   lines requiring special training, experience, or knowledge; OR  execute, under general supervision, special assignments and tasks, and
  4. Do not devote more than 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 1, 2 and 3.

Rationale Behind Night Shift Differential Pay

Workers and employees who work at specified night shift hours are entitled to additional pay known as night shift differential because of the recognized ill effects of working late at night.

Scientists have long studied how disrupting the normal sleep cycle (where people sleep at night and go out during the day) is increasingly linked to serious diseases such as hypertension, heart attack and certain cancers.

The Supreme Court adopted the general view that night work is undesirable both from the management and employee’s points of view for quite some time. One case decided in 1948 cites the following paragraph obtained from Commons & Andrews “Principles of Labor Legislation” in the case of Shell Company of the Philippine Islands:

           “The lack of sunlight tends to produce anemia and tuberculosis and to predispose him to other ills.  Night work brings increased liability to eyestrain and accident.  Serious moral dangers also are likely to result from the necessity of traveling the street alone at night, and from the interference with normal home life.”

In a much later case, the Supreme Court still cited the same quoted paragraph and added that it is only fair that the employee is compensated for the inconvenience of working at night.  (Association of International Shipping Lines, Inc. et al vs. United Harbor Pilots’ Association of the Philippines, Inc. GR 172029, Aug. 06, 2008).

Guide on Wage Order and Minimum Wage (Philippines)

Wages or salaries are the amounts workers or employees receive as compensation from employers for the work they regularly perform.  While business owners and workers are allowed to agree on specific amounts as salaries, these must not be lower than the minimum wage set by the Regional Tripartite Wages and Productivity Boards (RTWPBs).

What are wage orders?

Minimum wages vary depending on the industry and location (region) of the business.  Regional Wage Orders specify:

-        the daily minimum wage rates and

-        exemptions from compliance

Wage increases occur when Wage Orders are issued.  These affect all private sector workers and employees receiving the daily minimum wage rates or those receiving up to a certain daily wage ceiling.

But not everyone may be entitled to the minimum wage.

There are exceptions such as househelpers and family drivers as well as companies that are granted limited exemptions.

What happens when a company or business pays its employees or workers salaries or wages below the minimum amount set by law?

Wage orders should not be ignored as stiff fines and the penalty of imprisonment  may be imposed upon an employer who refuses or fails to pay the prescribed increases or adjustments in the wage rates.

But what about Wage/salary distortion?

Companies often follow salary pay scales or pay grades according to differentiate work roles, positions and levels. Occasionally, mandated wage increases elevate salaries of lower positions so that the salary of a Grade Level One position may become equal to the salary of the next higher rank.  In this case, what should the employer do?  Assuming the company has decided to address wage distortion, how should he go about it?

This Guide includes various formulae in resolving wage distortion and demonstrates each with an example. It also presents a solution for companies that are unionized.

Exemptions from wage orders

Some employers may be exempt from compliance with minimum wage orders. But in certain instances, a prior application for exemption must first be obtained through application and approval.  If the application is disapproved, at what point should the company pay its employees the minimum wage? From the date of the application or from the date of disapproval?

These and other related issues are discussed in the Guide on Wage Orders and Minimum Wage. The eBook version now includes:

-        the latest Wage Order No. NCR-16 granting P22.00 COLA

-        updated list of regional wage rates as of July 1, 2011

-        Labor Advisory dated July 07, 2011 on the treatment of COLA in regular holiday pay

Ebook version (2011 revised edition) on Wage Orders and Minimum Wage guide is now available at ManilaBookSales.Com at Php 597.00.

Guide to Wage Order and Minimum Wage Law in the Philippines

About 13th Month Pay

When the last quarter or ‘-ber’ months of the year come in, thoughts of 13th month pay enter the minds of both employers and employees.  This mandatory payment under a specific law (PD851) generally covers all rank and file employees who have worked for at least one (1) month during the calendar year.  (A calendar year is the period starting from January to December).

Who are not covered

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 already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of the issuance of PD 851.
  3. Employers of household helpers and persons in the personal service of another in relation to such workers    Note: Under the new Kasambahay Law, household helpers are now entitled to 13th-month pay.
  4. Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing specific work, regardless of the time spent performing such work.  BUT workers paid on piece rate basis are entitled to 13th-month pay.

Workers paid on piece-rate are those who are paid a standard or fixed amount for every piece or unit of work performed or produced that is more or less regularly replicated, regardless of the amount of time spent by the worker in producing the same.  Some factory workers and those employed in cottage industries often fall under this type of work.  Under PD 851, these workers must be given 13th month pay.

Time of payment:  The deadline for the release of the 13th month pay is on December 24 each year.  Employers have the option of giving out one half (1/2) of the 13th month pay before the opening of the regular school year and the other half on or before December 24.

Note: The DOLE Call Center at Hotline 2917 from your Globe or TM mobile phones, 908-2917 from your fixed-line phones for free, or text (SMS) 2910. Concerns may also be addressed to the Bureau of Working Conditions at tel. no. 527-3000 local 301 and 307; email bureauofworkingconditions@gmail.com; bwcdole@gmail.com.

What is Night Shift Differential Pay

Night shift differential pay is an additional amount that an employer must pay an employee who works between 10 p.m. and 6 a.m.

The Labor Code provides that every employee is entitled to a night shift differential or night shift pay of not less than ten percent (10%) of his regular wage for each hour of work performed between 10 p.m. and 6 a.m.  If overtime work or work in excess of eight (8) hours falls within the night shift period, premiums for overtime work should first be integrated into the regular hourly rate of the employee before computing night shift pay. 

Who are not covered by the night differential provisions

The provisions on night shift differential apply to all employees except:

  • government employees
  • employees of retail and service establishments regularly employing not more than 5 workers
  • domestic helpers and persons in the personal service of another
  • managerial employees
  • field personnel and those whose time and performance are unsupervised by the employer

Learn how to compute night shift pay or night shift differential from Compensation and Benefits Guide by Atty. Elvin Villanueva.