Monetary Benefits Handbook

HANDBOOK ON
W O R K ERS’ STATUTORY
M O N E TARY BEN E F ITS
DEPARTMENT OF LABOR AND EMPLOYMENT

B U R E AU O F W O R K IN G C O N D I T I O N S
2000
FOREWORD
The Handbook on Workers’ Statutory Monetary Benefits provides a comprehensive outline of the mandatory
benefits the workers are entitled to receive under the Labor Code and other existing laws. It offers simple and concise
information on the existing minimum wages, holiday pay, premium pay, overtime pay, night shift pay, service incentive
leave, service charges, termination and retirement pay, and 13th month pay. It likewise includes provisions on maternity
benefit under the Social Security Law, as well as benefits under the Social Amelioration and Employees Compensation
Programs. Pertinent provisions from existing legislations have been condensed in a single material to provide not only
labor law enforcers, employees and employers but also teachers, students, researchers and the general public a clear
grasp of minimum legal requirements concerning workers’ monetary and non-monetary benefits.
Recent amendments of such laws, however, made necessary the revision of the 1994 Handbook to include
updates on the NCR minimum wages. Thus, the illustrations on the computations of wage-related benefits have been
changed to conform with the new rates. Likewise included for immediate reference are the salient features of Republic
Act No. 8187 otherwise known as Paternity Leave Act of 1996 and RA 8558, an Act reducing the retirement age of
underground mine employees.
The publication of this material aims to foster a better appreciation and understanding of existing laws on
workers’ benefits, a very vital element in improving working conditions and maintaining lasting industrial peace.
14 December 1999.
BIENVENIDO E. LAGUESMA
Secretary
Table of Contents
I. MINIMUM WAGE
A. Coverage
B. Amount of Minimum Wage Increase
C. Basis of Minimum Wage
D. Monthly-Paid Employees as Distinguished from
Daily-Paid Employees
E. Guidelines for Computation of Equivalent Monthly
Rate of Monthly-Paid and Daily-Paid Employees
F. Minimum Wage for Workers Paid by Result
G. Minimum Wage of Apprentices, Learners and Handicapped
H. Minimum Wage of Househelpers
I. Effect of Reduction of Workdays on Wages
.
II. HOLIDAY PAY (Art.94)

A. Coverage
B. Regular Holidays
C. National Special Days
D. Muslim Holidays
E. Special Days
F. Absences
G. Temporary or Periodic Shutdown/Cessation of Work
H. Holiday Pay of Certain Employees
III. PREMIUM PAY

A. Definition of Premium Pay
B. Coverage
C. Premium Pay Rates
IV. OVERTIME PAY (Art. 87)

A. Definition of Overtime Pay
B. Coverage
C. Overtime Pay Rates
D. Stipulated Overtime Rates
V. NIGHT SHIFT DIFFERENTIAL (Art. 86)

A. Coverage
B. Minimum Night Shift Pay
C. Computation of Night Shift Pay
VI. SERVICE INCENTIVE LEAVE (Art.95)

A. Coverage
B. Meaning of “one year of service”
C. Availment/Commutation to Cash
D. Illustration
VII. SERVICE CHARGES (Art.96)

A. Sharing
B. Payments
C. Tips
VIII. SEPARATION PAY (Art. 283-284)
A. One Month Pay or One Half Month Pay Per Year of Service
B. One (1) Month Pay Per Year of Service
C. Notice of Termination
D. Basis of Termination Pay
IX. RETIREMENT PAY (Art. 287 as amended by R.A. 7641)

A. Coverage
B. Amount of Retirement Pay
C. Retirement Under the Collective Bargaining Agreement/
Applicable Contract
E. Other Benefits Upon Retirement
X. 13th MONTH PAY (P.D. 851)

A. Removal of Salary Ceiling
B. Who are Rank-and-File Employees
C. Minimum Amount
D. Exempted Employers
E. Time of Payment of 13th Month Pay
F. 13th Month Pay For Certain Types of Employees
G. 13th Month Pay of Resigned or Separated Employee
H. Non-Inclusion in Regular Wage
XI. MATERNITY BENEFITS (Social Security Law R.A. 8282)

A. Coverage
B. Entitlement
XII. PATERNITY LEAVE (R.A. 8187)

A. Coverage
B. The Benefit
C. Conditions for Entitlement
D. Application for Leave
E. Non-commutation of Benefits
F. Crediting of Existing Benefits
XIII. BENEFITS UNDER THE EMPLOYEES

COMPENSATION PROGRAM
A. The EC Program
B. Coverage
C. The Benefits
D. Kinds of Disability
E. Filing of Claims
F. Obligations
XIV. BENEFITS UNDER THE SOCIAL AMELIORATION

PROGRAM
A. The Social Amelioration Program (SAP)
B. Coverage
C. Components of the Program
D. Administrative Expense Fund
I. MINIMUM WAGE
Republic Act 6727 (otherwise known as the Wage Rationalization Act) fixed the statutory minimum wages applicable to
different industrial sectors, namely: non-agricultural, agricultural plantation and non-plantation, cottage/handicraft, retail and
service, depending upon 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 of fish and other aquatic products in farms or ponds, and any activity
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.
“Plantation Agricultural Enterprise” is one engaged in agriculture with an area of more than 24 hectares in a
locality or which employs at least 20 workers. Any other agricultural enterprise shall be considered as “Non-
Plantation Agricultural Enterprise”
“Retail Establishment” is one principally engaged in the sale of service to individuals for their own or
household use and is generally recognized as such.
“Cottage/Handicraft Establishment” is one engaged in an economic endeavor in which the products are
primarily done in the home or such other places for profit which requires manual dexterity and craftsmanship
and whose capitalization does not exceed P500,000.00 regardless of previous registration with the defunct
NACIDA.
The Act rationalized wage policy determination by establishing the mechanism and proper standards, through the
creation of Regional Tripartite Wage and Productivity Boards to determine the wage rates in the different regions based
on established criteria. There is now a Board for each of the following regions:
National Capital Region (NCR or Metro Manila)

Cordillera Administrative Region (CAR)
Region I (Northern Luzon)
Region II (Cagayan Valley)
Region III (Central Luzon)
Region IV (Southern Tagalog)
Region V (Bicol Region)
Region VI (Western Visayas)
Region VII (Central Visayas)
Region VIII (Eastern Visayas)
Region IX (Western Mindanao)
Region X (Northern Mindanao)
Region XI (Southern Mindanao)
Region XII (Central Mindanao)
Region XIII (CARAGA)
Autonomous Region for Muslim Mindanao (ARMM).
Existing Regional Wage Orders prescribe the daily minimum basic wage rates per industry per locality within the
region, in some instances depending upon the number of workers and the capitalization. The Wage Orders likewise
provide the basis and procedure for exemption from compliance. Some Wage Orders grant allowances instead of wage
increases.
A. Coverage
The wage increase prescribed under Wage Orders apply to all private sector workers and employees regardless of
their position, designation or status, and irrespective of the method by which their wages are paid, except the following:
• Household or domestic helpers, including family drivers and workers in the personal service of another; (Their
conditions of work are prescribed in R.A. No. 7665)
• Workers and employees in retail/service establishments regularly employing not more than 10 when specifically
exempted from compliance for a period fixed by the Board.
• Workers and employees of distressed establishments when exempted from compliance for a period fixed by the
Board.
• Workers and employees of other firms or employers as determined by the Board when exempted from
compliance for a fixed point.
B. Amount of Minimum Wage Increase Under Wage Order Nos. 1, 2, 3, 4, 5 and 6 and the current Daily Minimum Wage
at the National Capital Region
DAILY MINIMUM WAGES

NATIONAL CAPITAL REGION
From July 1, 1989 to January 7, 1991

Cities Municipalities WO # NCR-01-A
Mla. Quezon Malabon Navotas RA6727 Effectivity Prescribed
Cal. Pasig San Juan Taguig 07-01-89 11-01-90 MWR
Pasay Makati Pateros Valenzuela Increase:
Mand. Las Pinas Paranque Muntinlupa P17/day
Marikina
Non-Agriculture 89.00 17.00 106.00
Agriculture**
Plantation 79.00 17.00 96.00
Non-Plantation 68.50 17.00 85.00
Cottage/Handicraft**
Employing more than 30 workers 77.00 17.00 94.00
Employing not more than 30 workers 75.00 17.00 92.00
Private Hospitals**
With Bed Capacity of more than 100 89.00 17.00 106.00
With Bed Capacity of 100 or less 85.00 17.00 102.00
Retail/Service**
Employing 11 to 15 workers 85.00 17.00 102.00
*Employing not more than 10 workers 68.00 17.00 85.00
DAILY MINIMUM WAGES
From January 8, 1991 to December 15, 1993

WO # NCR -02-A
Cities Municipalities
Mla. Quezon Malabon Navotas
Effectivity
Cal. Pasig San Juan Taguig Prescribed
01/08/1991
Pasay Makati Pateros Valenzuela MWR
Increase:
Mand. Las Pinas Paranaque
P12/day
Muntinlupa
Marikina
Non-Agriculture 12.00 118.00
Agriculture**
Plantation 12.00 108.00
Non-Plantation 12.00 97.50
Employing more than 30 workers 12.00 106.00
Employing not more than 30 workers 12.00 104.00
Private Hospitals**
With Bed Capacity of more than 100 12.00 118.00
With Bed Capacity of 100 or less 12.00 114.00
Retail/Service**
Employing more than 15 workers 12.00 118.00
Employing 11 to 15 workers 12.00 114.00
*Employing not more than 10 workers 12.00 97.00
* May be exempted from Wage increase for a maximum period of 12 months from the effectivity of Wage Order upon
application with RTWPB-NCR
** Minimum wage adjustment for workers under these classification are given on a staggered basis by 1 January 1999
DAILY MINIMUM WAGES
From December 16, 1993 to February 1, 1996

WO # NCR -03
Cities Municipalities Amount of Increase = P27.00/day
Mla. Quezon Malabon Navotas Effectivity Pres- Effectivity Pres-
Cal. Pasig San Juan Taguig 12/16/1993 cribed 04/01/1994 cribed
Pasay Makati Pateros Valenzuela Increase: MWR Increase: MWR
Mand. Las Pinas Paranaque Muntinlupa P17.00 P10.00
Marikina
Non-Agriculture 17.00 135.00 10.00 145.00
Agriculture**
Plantation 17.00 125.00 10.00 135.00
Non-Plantation 17.00 114.50 10.00 124.50
Employing more than 30 workers 17.00 123.00 10.00 133.00
Employing not more than 30 workers 17.00 121.00 10.00 131.00
Private Hospitals**
With Bed Capacity of more than 100 17.00 135.00 10.00 145.00
With Bed Capacity of 100 or less 17.00 131.00 10.00 141.00
Retail/Service**
Employing 11 to 15 workers 17.00 131.00 10.00 141.00
*Employing not more than 10 workers 17.00 114.00 10.00 124.00
DAILY MINIMUM WAGES
From February 2, 1997 to December 31, 1997

WO # NCR - 04
Mla. Quezon Malabon Navotas Effectivity Pres- Effectivity Pres-
Cal. Pasig San Juan Taguig 02/02/1996 cribed 05/01/1996 cribed
Pasay Makati Pateros Valenzuela Increase: MWR Increase: MWR
Mand. Las Pinas Pque. Muntinlupa P16/day P4.00/day
Marikina
Non-Agriculture 16.00 161.00 4.00 165.00
Agriculture**
Plantation 16.00 151.00 4.00 155.00
Non-Plantation 16.00 140.50 4.00 144.50
Private Hospitals**
With Bed Capacity of 100 or less 16.00 157.00 4.00 161.00
Retail/Service**
Employing 11 to 15 workers 16.00 157.00 4.00 161.00
*Employing not more than 10 workers 16.00 140.00 4.00 144.00
DAILY MINIMUM WAGES
From January 1, 1997 to February 5, 1997
Cal. Pasig San Juan Taguig
Pres- WO#NCR-04 Prescribed
Pasay Makati Pateros Valenzuela
cribed 01-01-97 MWR
Mand. Las Pinas Pque. Muntinlupa
MWR Wage Increase
Marikina
Non-Agriculture 165.00 - 165.00
Agriculture**
Plantation 155.00 5.00 160.00
Non-Plantation 144.50 7.00 151.50
Private Hospitals**
With Bed Capacity of more than 100 165.00 - 165.00
Retail/Service**
Employing more than 15 workers 165.00 - 165.00
DAILY MINIMUM WAGES
From February 6, 1997 to February 5, 1998

WO # NCR-05
Cal. Pasig San Juan Taguig Effectivity Pres- Effectivity Pres-
Pasay Makati Pateros Valenzuela 02/06/1997 cribed 05/01/1997 cribed
Mand. Las Pinas Pque. Muntinlupa Increase: MWR Increase: MWR
Marikina P15.00 P5.00
Non-Agriculture 15.00 180.00 5.00 185.00
Agriculture**
Plantation - 160.00 7.00 167.00
Non-Plantation - 151.50 7.00 158.50
Employing more than 30 workers - 157.00 7.00 164.00
Employing not more than 30 workers - 156.00 7.00 163.00
Private Hospitals**
With Bed Capacity of 100 or less - 165.00 7.00 172.00
Retail/Service**
Employing 11 to 15 workers - 165.00 7.00 172.00
*Employing not more than 10 workers - 151.00 7.00 158.00
DAILY MINIMUM WAGES
From February 6, 1997 to February 5, 1998

WO # NCR - 05
Effectivity Effectivity
Cal. Pasig San Juan Taguig Pres- Pres- Pres-
02/06/”97 05/01/”97
Pasay Makati Pateros Valenzuela cribed cribed cribed
Increase: Increase:
Mand. Las Pinas Paranaque Muntinlupa MWR MWR MWR
P15.00 P5.00
Marikina
Non-Agriculture 165.00 15.00 180.00 5.00 185.00

Agriculture**
Plantation 160.00 - 160.00 7.00 167.00
Non-Plantation 151.50 - 151.50 7.00 158.50
Employing more than 30 workers 157.00 - 157.00 7.00 164.00
Employing not more than 30 workers 156.00 - 156.00 7.00 163.00
Private Hospitals**
With bed Capacity of more than 100 165.00 15.00 180.00 5.00 185.00
With bed Capacity of 100 or less 165.00 - 165.00 7.00 172.00
Retail/Services**
Employing more than 15 workers 165.00 15.00 180.00 5.00 185.00
Employing 11 to 15 workers 165.00 - 165.00 7.00 172.00
*Employing not more than 10 workers 151.00 - 151.00 7.00 158.00
DAILY MINIMUM WAGES
From May 1, 1997 to February 5, 1998
Pres- WO# WO # Pres-
cribed NCR-04 NCR-05 cribed
Pasay Makati Pateros Valenzuela
MWR 01/01/1998 01/01/1998 MWR
Mand. Las Pinas Pque. Muntinlupa
Marikina
Non-Agriculture 185.00 - - 185.00
Agriculture**
Plantation 167.00 5.00 7.00 179.00
Non-Plantation 158.50 7.00 7.00 172.50
Private Hospitals**
With Bed Capacity of more than 100 185.00 - - 185.00
With Bed Capacity of 100 or less 172.00 - 7.00 179.00
Retail/Service**
Employing more than 15 workers 185.00 - - 185.00
Employing 11 to 15 workers 172.00 - 7.00 179.00
*Employing not more than 10 158.00 7.00 7.00 172.00
workers
DAILY MINIMUM WAGES
From February 6, 1998 to December 31, 1999

WO # NCR-06
Cities Municipalities Amount of Increase = P13.00
Pres-
Pasay Makati Pateros Valenzuela Prescribed Effectivity
ribed
Mand. Las Pinas Pque. Muntinlupa MWR 02/06/1998
MWR
Marikina
Non-Agriculture 185.00 13.00 198.00
Agriculture**
Plantation 179.00 7.00 186.00
Non-Plantation 172.50 7.00 179.50
Private Hospitals**
With Bed Capacity of more than 100 185.00 13.00 198.00
Retail/Service**
DAILY MINIMUM WAGES
January 1, 1999 to October 31, 1999
Cal. Pasig San Juan Taguig WO # Total
Pres- WO # WO # Pres-
NCR- WO # Wage
Pasay Makati Pateros Valenzuela cribed NCR-05 NCR- cribed
04 NCR-06 Adj. in
Mand. Las Pinas Paranaque Muntinlua MWR 1999
07 MWR
Marikina
Non-Agriculture 198.00 - - - - 25.50 223.50

Agriculture**
Plantation 186.00 - 6.00 6.00 12.00 198
Non-Plantation 179.50 6.50 6.00 6.00 18.50 198
Employing more than 30 workers 182.00 4.00 6.00 6.00 16.00 198
Employing not more than 30 workers 182.00 4.00 6.00 6.00 16.00 198
Private Hospitals**
With bed Capacity of more than 100 198.00 - 6.00 6.00 12.00 25.50 223.50
With bed Capacity of 100 or less 186.00 - 6.00 6.00 12.00 198
Retail/Services**
Employing more than 15 workers 198.00 - - - - 25.50 223.50
Employing 11 to 15 workers 186.00 - 6.00 6.00 12.00 198
*Employing not more than 10 workers 179.00 7.00 6.00 6.00 19.00 198
* May be exempted from Wage Increase for a maximum period of twelve months from
the effectivity of Wage Order upon application with the RTWPB-NCR
** Minimum wage adjustment for workers under these classifications are given on a
staggered basis by 01 January 1999
C. Basis of Minimum Wage
The basis of the minimum wage rates prescribed by the law shall be the normal working hours of eight (8) hours a
day.
D. Monthly-Paid Employees as Distinguished from Daily-Paid Employees
Monthly-paid employees are those who are paid every day of the month, including unworked rest days, special days
and regular holidays.
Daily-paid employees are those who are paid on the days they actually worked and on unworked regular holidays.
E. Recommended Computation of the Equivalent Monthly Rate (EMR) of Monthly-Paid and Daily-Paid
Employees*
For monthly-paid employees:
It is generally understood that factor 365 days in a year is used in determining the equivalent annual and monthly
salary of monthly-paid employees. To compute their EMR, the procedure is as follows:
Applicable Daily Rate x 365 = EMR
12
where 365 days/year = 302 ordinary working days

51 rest days**
10 regular holidays
2 special days
_____
365 Total equivalent no. of days in a year
__________________
* Please see discussion under II. Holiday Pay and III. Premium Pay.
** For workers whose rest days fall on Sunday, the number of rest days in a year is reduced from 52 to 51 days, the last Sunday of
August being a regular holiday under Executive Order No. 203.
For daily-paid employees:
The following factors and formula may be used in computing the EMR of different groups of daily-paid employees for
purposes of entitlement to minimum wages and allied benefits under existing laws.
a) For those who are required to work everyday including Sundays or rest days, special days and regular holidays
Applicable Daily Rate x 391.50 = EMR

12
where 391.50 days/year = 302 ordinary working days

20.60 nine regular holidays x
200% plus one regular
holiday/Sunday x 260%*
66.30 51 rest days x 130%
2.60 2 special days x 130%
______
391.50 Total equivalent number
of days in a year
b) For those who do not work and are not considered paid on Sundays or rest days
Applicable Daily Rate x 314 = EMR

12

10 regular holidays
2 special days (if considered
paid; if actually worked, this
______ is equivalent to 2.6 days)
314 Total Equivalent number
of days in a year**
_________________
* For purposes of computation, said holiday although still a rest day for them is included in the ten regular holidays. For workers whose rest days do
not fall on Sundays, the number of rest day is 52 days as there are 52 weeks in a year.
** Factors 312 may be used instead of 314, if the two special days under EO 203 are not considered paid.
c) For those who do not work and are not considered paid on Saturdays and Sundays or rest days
Applicable Daily Rate x 262= EMR

12

10 regular holidays
2 special days (if considered
paid; if actually worked, this
______ is equivalent to 2.6 days*)
262 Total equivalent number
of days in a year*
F. Minimum Wage of Workers Paid by Results
All workers paid by results, including homeworkers and those who are paid on piecework, takay, pakyaw, or task
basis, shall receive not less than the applicable statutory minimum wage rates prescribed under the Regional Wage
Orders for normal working hours, or a portion thereof.
The adjustments in the wage rates by reason of mandatory wage increase for workers paid by results shall be
computed in accordance with the following steps: (AMW – Applicable Minimum Wage rate)
1. Amount of increase in AMW ÷ Previous AMW x 100 = % increase

2. Existing rate/piece x % increase = Increase in rate/piece;
3. Existing rate/piece + increase in rate/piece = Adjusted rate/piece;
The wage rates of workers who are paid by results shall continue to be established in accordance with Article 101 of
the Labor Code, as amended and its implementing regulations, i.e., through:
a) Time and motion studies;
b) An individual/collective bargaining agreement between the employer and its workers as approved by the
Secretary.
c) Consultation with representatives of employers and workers as organizations in tripartite conference called by
Secretary.
____________________
*Factor 260 maybe used if the 2 special days under EO 203 are not worked and are not considered paid.
Where the output rates established by the employer do not conform with the standards set under the methods for
establishing output rates, the employee shall be entitled to the difference between the amount they are entitled to receive and
the amount paid by the employer.
Request for the conduct of time and motion studies to determine whether the non-time employees in an enterprise are
being paid fair and reasonable wages, may be filed with the proper Regional Office.
G. Minimum Wage of Apprentices, Learners and Handicapped Workers
Wages of apprentices, learners and handicapped workers shall in no case be less than seventy five percent (75%) of the
applicable statutory wage rates.
Apprentices and learners are those who are covered by apprenticeship/learnership agreements duly approved by this
Department.
A handicapped worker is one whose working capacity is impaired by his age, physical defect or mental deficiency or
injury.
H. Minimum Wage of Househelpers (R.A. 7655)

The minimum compensation of P800.00 a month is required for househelpers in Manila, Quezon, Pasay and Caloocan,
Makati, Mandaluyong, Pasig, Muntinlupa Cities and in the municipalities of San Juan, Navotas, Malabon, Paranaque, Las
Pinas, Marikina, Valenzuela, Taguig, and Pateros in Metro Manila and in highly urbanized cities.
P650.00 a month for those in other chartered cities and first class municipalities like cities other than Manila, Pasay,
Quezon and Caloocan cities and highly urbanized cities.
P 550.00 a month for those in other municipalities.
Househelpers who are receiving at least one thousand pesos (P1,000.00) a month shall be covered by the Social Security
System.
I. Effect of Reduction of Workdays on Wages
In situations where the reduction in the number of regular working days is resorted to by the employer to prevent
serious losses such as when there is a substantial slump in the demand for his 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, of course, without prejudice to an agreement or policy which provides
otherwise.
Note:
As of date of printing the Regional Tripartite Wages and Productivity Board (NCR) came out with Wage Order No.
NCR-08 granting a wage increase of P26.50 per day effective November 01, 2000. The new minimum wage for
employees in the National Capital Region (NCR) is now P250.00.
II. HOLIDAY PAY
(Art. 94)
A. Coverage
This benefit shall apply to all employees except:

a) Those of the government and any of the political subdivisions, including government-owned and controlled
corporations;
b) Those of retail and service establishments regularly employing less than ten (10) workers;
c) Domestic helpers and persons in the personal service of another;
d) Managerial employees; and
e) 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.
B. Regular Holidays
Every employee covered by the Holiday Pay Rule is entitled to his daily basic wage for any unworked regular holiday.
This means that the employee is entitled to at least 100% of his basic wage even if he did not report for work, provided he
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%) the basic wage of the employee.
Illustration: Using the NCR minimum wage rate of P223.50 per day for the non-agricultural sector effective 31 October 1999.
For work within 8 hours:
Plus 100% of the daily basic rate of 100% or a total of 200%.

P223.50 + 100% thereof = P223.50 + P223.50 = P447.00
or
200% of P223.50 = 2.00 x P223.50 = P447.00
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 III. Premium Pay).
There are ten (10) regular holidays in a year under Executive Order No. 203, namely:
New Year’s Day January 1

Maundy Thursday Movable Date
Good Friday Movable Date
Araw ng Kagitingan April 9
Labor Day May 1
Independence Day June 12
National Heroes Day Last Sunday of August
Bonifacio Day November 30
Christmas Day December 25
Rizal Day December 30
C. National Special Days
All Saints Day November 1

Last Day of the Year December 31
D. Muslim Holidays
Presidential Decree 1083 in its Book V. Title I recognizes the five (5) Muslim holidays, namely:
‘Amun Jadid (New Year), which falls on the first day of the lunar month of Muharram
Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-
ul-Awwal
Lailatul Isra Wal Mi Raj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-
seventh day of the seventh lunar month of Rajab
‘Id-ul-Fitr (Hari Raya Pausa), which falls on the first day of the tenth lunar month of Shawwal commemorating the end
of the fasting season
‘Id-ul-Adha ( Hari Raha Haji), which falls on the tenth day of the twelfth lunar month of Dhu’l-Hijja
These official holidays shall be observed in the provinces of Basilan, Lanao del Norte, Lanao del sur, Maguindanao,
North Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zambaonga del Norte and Zamboanga del Sur and in the cities of
Cotabato, Iligan, Marawi, Pagadian and Zamboanga, and in such other Muslim provinces and cities as may be created by
law. Upon proclamation by the President of the Philippines, Muslim holidays may also be officially observed in other
provinces and cities.
The dates of Muslim holidays shall be determined by the Office of the President of the Philippines in accordance with
the Muslim Lunar Calendar (Hijra).
Presidential Proclamation No. 1198 (26 October 1973) provides as follows:
“All private corporations, offices, agencies and entities or establishments operating within the provinces and cities
enumerated herein shall observe the legal holidays as proclaimed, provided, however, that all Muslim employees
working outside of the Muslim provinces and cities shall be excused from work during the observance of the Muslim
holidays as recognized by law without diminution or loss of wages during the said period xxx.”
Considering that all private corporations, offices, agencies, and entities or establishments operating within the
designated Muslim provinces and cities are required to observe Muslim holidays, both Muslim and Christians working within
the Muslim areas may not report for work on the days designated by law as Muslim holidays.
Muslim employees working outside of the Muslim provinces and cities shall be excused from reporting for work during
the observance of the Muslim holiday as recognized by law without diminution of salary or wages during the period. Thus,
they are entitled to holiday pay equivalent to 100% of their basic pay if they are present or on leave of absence with pay on
the working day immediately preceding the Muslim holiday while those who are permitted or suffered to work on such
holidays are entitled to at least 200% of their basic pay.
E. Special Days
Executive Order No. 203 lists down two (2) special days that shall be observed in this country: All Saints Day
(November 1), and the last day of the year (December 31). During special days, the principle of “no work, no pay” applies
and on such other special days as may be proclaimed as such by the President or by Congress.
Workers who were not required or permitted to work on those days are not by law 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 other benefits for days declared as special days even if unworked.
On the other hand, work performed on special days merits additional compensation of not less than 30% on top of
the basic pay or a total of 130% and at least 50% over and above the basic pay or a total of 150% if the worker is
permitted or suffered to work on said day which may be his scheduled rest day (Please see III. Premium Pay).
F. Absences
a) All covered employees shall be entitled to holiday pay when they are on leave of absence with pay. 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 have not worked on such regular holiday.
b) 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 they are not reporting for
work while on such benefits.
c) Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest
day of the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be
entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day.
G. 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.
H. Holiday Pay of Certain Employees
a) Where the covered employee is paid on piece rate basis, his holiday pay shall not be less than his average daily
earnings for the last seven (7) actual working days preceding the regular holiday; Provided, however, that in no
case shall the holiday pay be less than the applicable statutory minimum wage rate.
b) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work.
c) Workers who do not have regular working days, such as stevedores, shall be entitled to this benefit.
III. PREMIUM PAY
A. Definition of Premium Pay
Premium Pay refers to the additional compensation required by law for work performed within eight (8) hours on non-
working days, such as rest days and special days.
A. Coverage
This benefit applies to all employees but not to the following persons;
a) Government employees whether employed by the National Government or any of its political sub-divisions,
including those employed in government-owned and/or controlled corporations;
b) Managerial employees, if they meet all of the following conditions:
1) Their primary duty consists of the management of the establishment in which they are employed or of a
department or sub-division 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 and firing and as to the promotion or any other change of status of other
employees are given particular weight.
c) Officers or members of a managerial staff if they perform the following duties and responsibilities:
1) The primary duty consists of the performance of work directly related to management policies of their
employer;
2) Customarily and regularly exercise discretion and independent judgment; and
3) i. Regularly and directly assist a proprietor or managerial employee whose primary duty consist of the
management of the establishment in which he is employed or sub-division thereof; or
ii. execute under general supervision work along specialized or technical lines requiring special training,
experience, or knowledge; or
iii. execute under general supervision, special assignments and tasks; and
4) Who do not devote more than 20% of their hours worked in a work week to activities which are not directly and
closely related to the performance of the work described in paragraphs (1), (2) and (3) above.
d) Domestic servants and persons in the personal service of another.
e) Workers who are paid by results, including those who are paid on piece-work, “takay”, “pakiao” or task basis, and
other non-time 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.
f) 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.
B. Premium Pay Rates
The minimum statutory premium pay rates are as follows:
a) For work performed on rest days or on special days.

Plus 30% of the daily rate of 100% or a total of 130%
b) For work performed on a rest day which is also a special day.

Plus 50% of the daily rate of 100% or a total of 150%
c) *For work performed on a regular holiday which is also the

employee’s rest day.
plus 30% of the regular holiday rate of 200% based on his daily
basic wage rate or a total of 260%
Illustration: Using P223.50 as daily basic rate (DBR)
a) 30% of P223.50 = .3 x 223.50 = P67.05

P223.50 + P67.05 = P290.55
or
130% of P223.50 = 1.3 x P223.50 = P 290.55
b) 50% of P223.50 = .5 x P223.50 = P111.75

P223.50 + P111.75 = P335.25
or
150% of P223.50 = 1.5 x P223.50 = P335.25
c) *200% of P223.50 + 30% of 200% of P223.50 =

P447.00 + .3 x (2 x P223.50)
P447.00 + (.3 x 447)
P447.00 + 134.10 = P 581.10
or
[(200% + (30% of 200%)] of P223.50 =
(200% + 60%) of P223.50 =
260% of P223.50 = 2.6 x P223.50 = P 581.10
___________
*Not applicable to employees excepted in the holiday pay rule
IV. OVERTIME WORK
(Art. 87)
A. Definition of Overtime Work
Overtime work is work performed beyond eight (8) hours a day.
B. Coverage
Every employee who is entitled to premium pay is likewise entitled to the benefit of overtime pay.
C. Overtime Pay Rates
The minimum overtime pay rates vary according to the day the overtime work is performed, as follows:
a) For work in excess of eight hours performed on ordinary working days: Plus 25% of the hourly rate
b) For work in excess of eight hours performed on a scheduled rest day, a special day and a regular holiday: Plus 30%
of the hourly rate on said days
Illustration: Using P223.50 as basic daily rate and P27.94 as basic hourly rate.
i.) Overtime pay on an ordinary day

P27.94 +(25% of P27.94) = P27.94 + (0.25 x P27.94)
P27.94 + P6.98 = P 34.92 OT/hour
or
125% of P27.94 = 1.25 x P27.94 = P34.92 OT/hour
i) Overtime pay on rest day or on special day
130% of 27.94 + 30% of (130% of 27.94)

P36.32 + P 10.90 = P47.22 OT/hr.
or
130% of (130% of P27.94) = 1.3 x (1.3 x 27.94)
=1.3 x P36.32 = P47.22 OT/hr.
c) Overtime pay on a rest day which falls on a special day
130% of (150% of P27.94) = 1.3 x (1.5 x P27.94)

=1.3 x P41.91 = P54.48 OT/hour
or
150% of 27.94 + 30% of (150% of 27.94)
P41.91 + P12.57 = P54.48 OT/hour
d) Overtime pay on a regular holiday
200% of 27.94 + 30% of (200% of 27.94)

= P55.88/hr + P16.76 = P72.64 OT/hour
or
130% of (200% of P27.94) = 1.3 x (2.0 x P27.94)
= 1.3 x P55.88 =P72.64 OT/hour
e) Overtime pay on a rest day which falls on a regular holiday
260% of 27.94 + 30% of (260 of 27.94) =

=P72.64/hr + P21.79 = P94.43 OT/hour
or
130% of (260% of P27.94) = 1.3 x (2.6 x 27.94)
=1.3 x P72.64 = P94.43 OT/hour
D. Stipulated Overtime Rates
Generally, the premium pay for work performed on rest days or on special days or regular holidays are included 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 stipulate in their collective agreement payment for overtime work at rates
higher than those provided by law.
V. NIGHT SHIFT DIFFERENTIAL
(Art. 86)
A. Definition – Night Shift Differential (NSD) is the additional compensation of ten percent (10%) of an employee’s
regular wage for each hour of work performed between 10:00 PM and 6:00 AM.
B. Coverage
The provisions of the Labor Code on night shift differential apply to all employees except:
a) government employees;
b) employees of retail and service establishments regularly employing not more than 5 workers;
c) domestic helpers and persons in the personal service of another;
d) managerial employees; and
e) field personnel and those whose time and performance are unsupervised by the employer.
C. Computation of Night Shift Pay
I. Where Night Shift (10 PM to 6 AM) Work is Regular Work
a) On an ordinary day:
Plus 10% of the basic hourly rate or a total of 110% of the basic hourly rate.
b) On a rest day, special day or regular holiday:

Plus 10% of the regular hourly rate on a rest day, special day or regular holiday or a total of 110% of the
regular hourly rate.
II. Where Night Shift (10 PM to 6 AM) Work is Overtime Work
a) On an ordinary day:
Plus 10% of the overtime hourly rate on an ordinary day or a total of 110% of the overtime hourly rate on an
ordinary day.
b) On a rest day/special day/ a regular holiday:

Plus 10% of the overtime hourly rate on a rest day/special day/regular holiday.
Illustration: Using P223.50 as basic daily rate and P27.94 as basic

hourly rate
1. a) For regular work in the night shift on an ordinary day:
P223.50 + 10% of P223.50 = P223.50 + (.10 x P223.50)

= P223.50 + P22.75
= P245.85/day
or
110% of P223.50 = 1.1 x 223.50
= P245.85
b) For regular night shift work on a rest day, special day

or regular holiday
b.1 For regular night shift work on a rest day:

(130% of P223.50) + 10% of (130% of P223.50)
=(1.3 x P223.50) + .10 x (1.3 x P223.50)
= 290.55 + P29.05
= P319.60
or
110% of (130% of P223.50)
= 1.1 x (1.3 x 223.50)
= P319.60
b.2 For regular night shift work falling on a special day or a

regular holiday:
Since special days and regular holidays are calendar days (i.e., 24 hour period from 12 midnight to 12 midnight of the
following day), the night shift is either cut-off or starts only at 12 MN. Hence, the night shift pay for such days may be
determined by the hour on the basis of the hourly rate not the daily rate.
b.2.1 On a special day
130% of P27.94 + 10% of (130% of P27.94)

= (1.3 x P27.94) + .10 x (1.3 x P27.94)
= P36.32 + P3.63
= P 39.95
or
110% of (130% of P27.94)
= 1.1 x (1.3 x 27.94)
= P39.95
b.2.2 On a regular holiday
200% of P27.94 + 10% of (200% of P27.94)

= (2.0 x P27.94) + .10 x (2.0 x P27.94)
= P55.88 + P5.59
= P61.47
or
110% of (200% of P27.94)
= 1.1 x (2.0 x P27.94)
= P61.47
III. For overtime work in the night shift:
Since overtime work is not usually 8 hours, the compensation for overtime night shift work is likewise computed on the
basis of the hourly rate.
b.1 On an ordinary day
Plus 10% of 125% of basic hourly rate or a total of 110% of 125% of basic hourly rate.
b.2 On a rest day/special day / regular holiday
Plus 10% of 130% of regular hourly rate on said days or a total of 110% of 130% of the applicable regular
hourly rate.
Illustration : Using P27.94 as basic hourly rate.
b.1 For overtime night shift work falling on an ordinary day.
(125% of P27.94) + 10% of (125% of P27.94)

= (1.25 x P27.94) + .10 x (1.25 x P27.94)
= P34.92 + P3.49
= P38.41
or
110% of (125% of P27.90)
= 1.1 x (1.25 x P34.92)
= P38.41
b.2 For overtime night shift work falling on rest day, special day or regular holiday.
b.2.1 On a special day or rest day:
130%(130% of P27.94) + 10% (130% of 130% of P27.94)

= 1.3 x (1.3 x P27.94) + .10 x (1.3 x 1.3 x P27.94)
= P47.22 + P4.72
= P51.94
or
169% of P27.94 + 10% of (169% of P27.94)
= P47.22 + 4.72
= P51.94
b.2.2 On a regular holiday:
130%(200% of P27.94) + 10% (130% of 200% of P27.94)

= 1.3 x (2.0 x P27.94) + .10 x (1.3 x 2.0 x P27.94)
= P72.64 + P7.26
= P79.90
or
260% of P27.94 + 10% of (260% of P27.94)

= P72.64 + P7.26
= P79.90
VI. SERVICE INCENTIVE LEAVE (SIL)
(Art. 95)
A. Coverage
Every employee who has rendered at least one (1) year of service is entitled to service incentive leave of five (5) days
with pay.
This benefit does not apply to the following:
a. government employees;
b. domestic helpers and persons in the personal service of another;
c. managerial employees;
d. field personnel and those whose time and performance is unsupervised by the employer;
e. those already enjoying this benefit;
f. those enjoying vacation leave with pay of at least five (5) days; and
g. 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 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. Where by individual or collective agreement, practice or policy the period of working
days is less than 12 months, said period shall be considered as one year for the purpose of determining entitlement to the
service incentive leave.
C. Availment/Commutation 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
commutation.
The availment and commutation of this benefit may be on a pro rata basis.
A. Illustration*
Thus, an employee who is hired on January 1, 1997 and resigned on March 1, 1998, assuming he has not used or
commuted any of his accrued SIL, is entitled upon his resignation to the commutation of his accrued SIL as follows:
SIL earned as of Dec. 31, 1997 - 5 days

Proportionate SIL for Jan. and Feb. 1998
(2/12) x 5 days - 0.833 day
Total accrued SIL as of March 1, 1998 - 5.833 days
__________________
*Per opinion of DOLE Legal Service
VIII. SERVICE CHARGES
(Art. 96)
B. Sharing
Employees of employers collecting service charges are entitled to an equal share in the 85% of the total of such charges,
except managerial employees. The remaining 15% of the charges may be retained by management to answer for losses and
breakages and for distribution to managerial employees, at the discretion of the management in the latter case. Service
charges are collected by most hotels and some restaurants, night clubs, cocktail lounges, among others.
C. Payments
The shares of the employee in the service charges have to be distributed to them not less often than once every two (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 shall be integrated into their basic wages.
D. 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 tips should be monitored, accounted and
distributed in the same manner as the service charges.
VIII. SEPARATION PAY
(Art. 283-284)
Separation pay is given to employees in instances covered by Article 283 and 284 of the Labor Code. An employee’s
entitlement to separation pay depends on the reason or ground for the termination of his 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 Art. 282 of the Labor Code and generally, may not be entitled to separation pay.* On the other
hand, where the termination is for authorized causes, separation pay is due.
A. One Month Pay or One-Half Month Pay Per Year of Service
An employee is entitled to receive as separation pay the equivalent to one (1) month pay, or one-half (1/2) month pay
whichever is higher for every year of service, a fraction of at least six months being considered as one (1) whole year, if
his separation from the service is due to any of the following causes:
a. Retrenchment to prevent losses, i.e. reduction of personnel effected by management to prevent losses;
b. Closure or cessation of operation of an establishment not due to serious losses or financial reverses; and
c. When the employee is suffering from a disease not curable within a period of six (6) months and his continued
employment is prejudicial to his health or to the health of his co-employees.
In no case will an employee get less than one (1) month separation pay if the separation is due to the above stated
causes, and he has served for at least six months.
Thus, if an employee had been in the service for at least six (6) months but less than a year, he is entitled to one (1)
full month’s pay as his separation pay if his separation is due to any of the causes enumerated above. Service of one year
and above entitles the employee ½month pay for every year of service, a factor of at least 6 months considered one year.
B. One (1) Month Pay Per Year of Service
An employee is entitled to separation pay equivalent to his one (1) month pay for every year of service, a fraction of at
least six (6) months being considered as one whole year, if his separation from service is due to any of the following:
a. Installation by employer of labor-saving devices.
b. Redundancy, as when the position of the employee has been found to be surplusage or unnecessary in the
operation of the enterprise;
c. Impossible reinstatement of the employee to his former 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 is to
be reinstated no longer exists and there is no substantially equivalent position in the establishment to which he can be
assigned. (per supreme Court Decision)
C. Notice of Termination
The employer may terminate the employment of any employee due to installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing
is for the purpose of circumventing the law, by serving a written notice on the workers and the Department of Labor and
Employment through the 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 latest salary rate.
IX. RETIREMENT PAY
(Art. 287 as amended by R.A. 7641)
A. Coverage
1. Employees shall be retired upon reaching the age of 60 years or more but not beyond 65 years old.
2. This benefit does not apply to the following:
a) government employees
b) employees of retail, service and agricultural establishments or operations regularly employing not more than
ten (10) employees
3. RETIREMENT UNDER REPUBLIC ACT NO. 8558
The retirement age of underground mine employees is reduced to a much lower age. For this purpose, an
underground mine employee refers to any person employed to extract mineral deposits underground or to work in
excavations or workings such as shafts, winzes, tunnels, drifts, crosscuts, raises, working places whether abandoned or in
use beneath the earth’s surface for the purpose of searching for and extracting mineral deposits.
In the absence of a retirement plan or other applicable agreement providing for retirement benefits of underground
mine employees in the establishment, an employee may retire upon reaching the compulsory retirement age of Sixty (60)
years or upon optional retirement at the age of fifty (50), provided he has served for at least five (5) years as an
underground mine employee or in underground mine of the establishment.
. Amount of Retirement Pay
The minimum retirement pay shall be equivalent to one-half month salary for every year of service, a fraction of at least six
(6) months being considered as one whole year.
For the purpose of computing retirement pay, "one-half month salary" shall include all of the following:
a) 15 days salary based on the latest salary rate;
b) cash equivalent of 5 days of service incentive leave;
c) one-twelfth (1/12) of the 13th month pay
Other benefits may be included in the computation of the retirement pay upon agreement of the employer and the
employee or if provided in the Collective Bargaining Agreement (CBA).
To illustrate:
One-half month salary = (15 days x latest salary per day) +

(5 days leave x latest salary per day) +
(1/12 of 13th month pay)
Minimum Retirement Pay = number of years in service x

One-half month salary
For covered workers who are paid by results and do not have a fixed monthly salary rate, the basis for the
determination of the salary for fifteen days shall be their average daily salary (ADS). The ADS is derived by dividing the
total salary or earnings for the last twelve months reckoned from the date of retirement by the number of actual working
days in that particular period, provided that the determination of rates of payment by results are in accordance with the
established regulations.
C. Retirement Under a Collective Bargaining Agreement/

Applicable Contract
Any employee may retire or be retired by his employer upon reaching the retirement age established in the CBA or
other applicable agreement/contract and shall receive the retirement benefits granted therein; provided, however, that
such retirement benefits shall not be less than the retirement pay required under RA 7641 and provided further that if such
retirement benefits under the agreement are less, the employer shall pay the difference.
Where both the employer and the employee contribute to a retirement fund pursuant to the applicable agreement, the
employer's total contributions and the accrued interest thereof should not be less than the total retirement benefits to
which the employee would have been entitled had there been no such retirement benefits fund. If such total portion from
the employer is less, the employer shall pay the deficiency.
D. Other Benefits Upon Retirement
The retirement benefits under RA 7641 (Art. 287) and RA 8558 are other than those granted by the Social Security
System.
Upon optional or compulsory retirement, the employee is likewise entitled, under the law, to the proportionate 13th
month pay for the calendar year and to the cash equivalent of accrued leave benefits.
X. 13TH MONTH PAY
(P.D. 851)
A. Coverage
All employers are required to pay their rank and file employees regardless of the nature of their employment and
irrespective of the method by which their wages are paid provided they worked for at least one (1) month during a calendar
year. 13th Month Pay should be given to the employees not later than December 24 of every year.
B. Who are Rank-and File Employees
The Labor Code distinguishes a rank-and-file employee from a managerial employee. It provides that 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, lay-off, 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 mandated 13th month pay.
C. Minimum Amount
The minimum 13th month pay required by law shall not be less than 1/12 of the total basic salary earned by an
employee within a calendar year.
The "basic salary" of an employee for the purpose of computing the 13th month pay shall include all remunerations or
earnings paid by his employer for services rendered. It does not include allowances 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 differential and holiday pay, and cost-of-living allowances. However, these salary
related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or
collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees.
D. Exempted Employers.
The following employers are not covered by P.D. 851:
a. 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;
b. Employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the
time of issuance of P.D. 851;
c. Employers of household helpers and persons in the personal service of another in relation to such workers; and
d. 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, irrespective of the time consumed in the performance thereof, except where
th
the workers are paid on piece rate basis in which case the employer shall grant the required 13 month pay to
such workers.
As used herein, workers paid on piece-rate shall refer to those who are paid a standard amount for every piece or unit
of work performed that is more or less regularly replicated, without regard to the time spent in producing the same.
The term "its equivalent" as used in paragraph (b) hereof shall include Christmas bonus, mid-year bonus, cash bonuses
and other payments amounting to not less than 1/12 of the basic salary but shall not include cash and stock dividends, cost of
living allowances and all other allowances regularly enjoyed by the employee, as well as non-monetary benefits.
The required 13th month pay shall be paid not later than December 24 of each year. An employer, however, may give to
his employees one half (1/2) of the required 13th month pay before the opening of the regular school year and the other half
on or before the 24th of December of every year. The frequency of payment of this monetary benefit may be the subject of
agreement between the employer and the recognized/collective bargaining agent of the employees.
a. Employees who are paid on piece work basis are by law entitled to the 13th month pay.
b. Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th 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. Dela Serna, GR No. 92174, and Phil. Fuji Xerox Corp.
vs. Trajano, GR No. 102552, March 24, 1994, the Supreme Court ruled that commissions, while included in the generic
term wage, are not part of "basic salary/wage" and therefore should not be included in computing 13th month pay, to
wit:
"In remuneration 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 wage.")
The term "its equivalent" as used in paragraph (b) hereof shall include Christmas bonus, mid-year bonus, cash bonuses
and other payments amounting to not less than 1/12 of the basic salary but shall not include cash and stock dividends, cost of
living allowances and all other allowances regularly enjoyed by the employee, as well as non-monetary benefits.
The required 13th month pay shall be paid not later than December 24 of each year. An employer, however, may give to
his employees one half (1/2) of the required 13th month pay before the opening of the regular school year and the other half
on or before the 24th of December of every year. The frequency of payment of this monetary benefit may be the subject of
agreement between the employer and the recognized/collective bargaining agent of the employees.
a. Employees who are paid on piece work basis are by law entitled to the 13th month pay.
th
b. Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13 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. Dela Serna, GR No. 92174, and Phil. Fuji Xerox Corp.
vs. Trajano, GR No. 102552, March 24, 1994, the Supreme Court ruled that commissions, while included in the generic
term wage, are not part of "basic salary/wage" and therefore should not be included in computing 13th month pay, to
wit:
"In remuneration 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 wage.")
c. Employees with multiple employers.
Government employees working part time in a private enterprises, including private educational institutions, as
well as employees working in two or more private firms, whether on full or part-time basis, are entitled to the
required 13th month pay from all their private employers regardless of their total earnings from each of all their
employers.
G. 13th 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 13th
month pay is entitled to his monetary benefit in proportion to the length of time he worked during the year reckoned from
the time he started working during the calendar year up to the time of his resignation or termination from the service.
Thus, if he worked only from January up to September his proportionate 13th month pay should be equivalent of 1/12 of
his total basic salary earned during that period.
H. Non-Inclusion in Regular Wage
The mandated 13th month pay need not be credited as part of regular wage of employees for purposes of determining
overtime and premium payments, fringe benefits as well as contributions to the State Insurance Fund , Social Security,
Medicare and private retirement plans.
XI. MATERNITY BENEFITS
(Social Security Law)
A. Coverage
All female employees whether married or unmarried.
B. Entitlement
b) 60 days – normal delivery, abortion or miscarriage

c) 78 days – caesarian section delivery at the rate of 0ne hundred percent (100%) of the average daily
salary credit as defined in Section of SS Law.
Every pregnant woman in the private sector, whether married or unmarried is entitled to maternity leave of sixty (60) days
in case of normal delivery, abortion 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
Social Security Law.
C. To be entitled to the maternity benefit, she should be an SSS member employed at the time of delivery, miscarriage or
abortion; she must have given the required notification to the SSS thru her employer; and her employer must have paid at
least three months of maternity contributions within the twelve-month period immediately before the date of contingency.
D. Maternity benefits, like other benefits granted by the SSS, are granted to employees in lieu of wages and, therefore, may
not be included in computing the employee’s 13th month pay for the calendar year.
XII. PATERNITY LEAVE
(Republic Act No. 8187)
A. Coverage
Paternity leave is granted to all married male employees in the private sector, regardless of employment status, (e.g.
probationary, regular, contractual, project basis) the purpose of which, is to allow the husband to lend support to his wife
during her period of recovery and/or in the nursing of her newborn child.
Employees of the government sector are likewise entitled to the paternity leave benefit. They shall be governed by the
Civil Service rules.
B. The Benefit
It shall apply to the first four deliveries of the employee’s lawful wife with whom he is cohabiting. For this purpose,
cohabiting refers to the obligation of the husband and wife to live together.
Where the spouses are not physically living together because of the work station or occupation, the male employee is
still entitled to the paternity leave benefit.
The leave shall be for seven (7) 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.
Availment of the paternity leave may 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) days for each covered delivery.
C. Conditions of Entitlement
A married male employee shall be entitled to paternity leave benefits provided that he has met the following
conditions:
a) he is an employee at the time of the delivery of the child;
b) he is cohabiting with his spouse at the time that she gives birth or suffers a miscarriage;
c) he has applied for paternity leave with his employer within a reasonable period of time from the date of delivery by the
pregnant spouse, or within such period as may be provided by company rules and regulations or by collective
bargaining agreements; and
d) his wife has given birth or suffered a miscarraige.
D. Application for 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 the pregnant spouse, or within such period as may be provided by company rules and
regulations or by collective bargaining agreement. Prior application for leave shall not be required in case of miscarriage.
E. Non-commutation of Benefits
In the event that the paternity leave is not availed of, said leave shall not be convertible to cash.
F. Crediting of Existing Benefits

1. If the existing paternity leave under the collective bargaining agreement, contract or company policy is greater than
seven (7) days as provided in the Act, the greater benefit shall prevail.
2. If the existing paternity benefit is less than that provided in the Act, the employer shall adjust the existing benefit to
the extent of the difference.
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 a full seven (7) days
paternity leave
XIII. BENEFITS UNDER THE EMPLOYEES
COMPENSATION PROGRAM
A. The EC Program
The Employees’ Compensation Program is the tax-exempt compensation program for employees and their
dependents created under Presidential Decree No. 626 which was implemented in March 1975.
B. Coverage
a. All employees in the private and public sector, regardless of the nature of their employment. (contractual, casual,
regular and permanent)
b. Every employer with at least one employee regardless of the capitalization and type of nature of his business.
H. Benefits
a. Cash income benefits for Temporary Total Disability (TTD). Permanent Partial Disability (PPD) and Permanent
Total Disability (PTD).
b. Carer’s allowance of P575.00 monthly for permanent disabilities.
c. Lifetime pension to primary beneficiaries in case of death and five-year pension but not less than P15,000.00 to
the secondary beneficiaries.
d. Funeral benefit of P 10,000.00 effective May 1, 1994 for the private sector and P3,000.00 for the public sector.
e. Medical Services during confinement in an ECC-accredited hospital;
1. ward services during confinement in an ECC-accredited hospital;

2. subsequent domiciliary care by an ECC-accredited physician; and
3. medicines
f. Rehabilitation Services which are given to employees who incurred a disability as a result of a work-connected injury or
sickness.
1. physical rehabilitation-therapy, artificial arms and limbs, crutches, wheelchairs, etc.
2. vocational education/training
- Two (2) year course in an ECC accredited school

- P1,000 monthly transportation allowance
- Free project materials
D. Kinds of Disability
a) Temporary Total Disability is a disability which prevents an employee from performing his work for a continuous
period not exceeding 120 days, except when such disability still requires medical attendance beyond 120 days, but not
to exceed 240 days. If the disability is a result of an injury or sickness, the period of compensability shall be counted
from the FIRST DAY of such injury or sickness.
b) Permanent Partial Disability is a disability which causes the harmful loss, permanently, of the use of any part of an
employee’s body.
c) Permanent Total Disability is any of the following:

ii) A disability that lasts for more than the period prescribed for Temporary Total Disability and prevents an
employee from pursuing his usual work and earning therefrom
ii). Complete loss of sight of both eyes
iii). Loss of two limbs at or above the ankles or wrists
iv). Permanent complete paralysis of two limbs
v). Brain injury resulting in incurable imbecility or insanity
vi). Such cases as determined by the System and approved by the ECC.
E. Filing of Claims
a. Employees can claim only for WORK-RELATED sickness, injuries or death.
Who may file: The covered employee, his dependents or his beneficiaries as defined by law or in case of their
absence or incapacity, their duly authorized representative may file an appropriate claim with
the GSIS in case of the public sector or with the SSS in case of the private sector.
When: Within three (3) years from notice of contingency to employer
How: Fill in prescribed forms supplied by the SSS/GSIS, attach supporting documents needed, for
every contingency.
b. Period of Appeal - The claimant shall file with the GSIS or the SSS, as the case may be, a notice of appeal within
thirty (30) calendar days from receipt of the decision.
c. Grounds –The appeal may be entertained only on any of the following grounds
i) If serious errors in the finding of facts are raised which, if not corrected, would cause grave irreparable damage
or injury to the appellant.
ii) If there is a prima facie evidence of abuse of discretion on the part of the system, and
iii) If made purely on question of law.
In case of denial of claim, claimant must appeal to the ECC and then to the Court of Appeal if the ECC affirms System’s
adverse decision and finally to the Supreme Court on pure question of law.
F. Obligations
a. Employees
1. Submittal of monthly medical report if under TTD, and
2. Quarterly report if under PTD (apart from at least yearly examination)
b. Employers
1. Registration of employee/s
2. Payment of monthly Contribution to the Employees Compensation Program
a. Private Sector – P 10.00 or 1% of the employee’s monthly salary credit
b. Government Sector – 1% of AMSC but not more than P30.00 per month)
3. Keeping of logbook to record contingencies; and
4. Notification of system regarding the contingencies.

XIV. BENEFITS UNDER THE SOCIAL
AMELIORATION PROGRAM
A. The Social Amelioration Program (SAP)
By virtue of Presidential Decree No. 621, the program was formally created providing the mandatory stabilization of
P1.00 per picul, otherwise known as the social amelioration bonus and the socio-economic projects for sugar workers.
The PD also provided authority to the then Department of Labor and overall supervision and control in the implementation
of the SAP. The decree also created the Rural Workers Office (now Bureau of Rural Workers) to assist the Secretary of
Labor in implementing the program.
On May 1, 1994, from a consolidation of Senate Bill No. 1441 and House Bill No. 32359, the new SAP in the sugar
industry was signed into law, Republic Act 6982, also known as the Sugar Amelioration Act of 1991. The new legislation
not only expanded the benefits of the program but also provides greater participation among program participants in terms
of policy determination affecting the sugar industry through the creation of the Sugar Tripartite Council (STC) and the
District Tripartite Councils (DTCs’) nationwide.
Effective crop year 1991-92 pursuant to the law, the SAP is supported through the P5.00 (now P8.00) per picul lien
imposed in the gross production of sugar. The lien was increased by P1.00 every two (2) years in the following crop
years, 1993-94, 1995-96 and 1997-98, to a total of P8.00.
B. Coverage
The employees and employers covered by the new SAP are as follows:
1. Employees – All mill and field or plantation workers, migratory workers or sacadas employed by the planters,
the employees of planters association/cooperatives and employees of nation organization of sugar producers.
Managerial employees as defined under the Implementing Rules and Regulations of RA 6982 are not covered by
the program.
2. Employers – All millers, except refineries and all sugar planters, affiliated or not.
C. Components of the Program
a. Cash Bonus Distribution Program
P6.40 or 80% of the lien (P8.00) is distributed as cash bonus to covered workers. The mill collects the lien which form
the Cash Bonus Fund (CBF) for distribution to the workers through PAs and the mill itself pursuant to the prescribed
procedures of the law.
After the 30- day distribution period, The UCBF shall be treated as undistributed cash bonus fund and shall be
remitted with the PAs or mills to be deposited in an authorized depository bank and allow withdrawals of the fund only
when there are payments to the late claimants.
After three months with the mills and/or PAs, all UCBF balances is turned-over to the DOLE-RO and shall be
deposited on its account. A period of 3 years is given to late claimants to file their claims to the DOLE-RO.
All balances of the fund, after three years, shall be forfeited and shall form part of the intended for socio-economic
projects for the sugar workers which shall likewise be handled by the DOLE.
b. Sugar Workers Welfare Programs
- Sugar Workers Maternity Benefit Program- Qualified woman sugar workers shall be entitled to P1,000
(now P2,000.00) maternity benefit per claim to be paid upon approval of her claim based on the
submission of the prescribed requirements. Said benefit shall be enjoyed only for the first four (4)
deliveries. The program is supported through the P0.24 or 3% portion of the P8.00 lien.
- Sugar Workers Death Benefit Program- Legal heirs of the deceased sugar workers are entitled to
P3,000 (now P5,000) death benefit. Payments of benefits is derived from the P0.40 or 5% allocation of
the lien.
D. Administrative Expense Fund
The remaining 3% or P0.24 of the lien is utilized for the administrative expenses of the STC, DTCs and the BRW in
implementing the Act.

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DEPARTMENT OF LABOR AND EMPLOYMENT

II. HOLIDAY PAY (Art.94)

III. PREMIUM PAY

IV. OVERTIME PAY (Art. 87)

V. NIGHT SHIFT DIFFERENTIAL (Art. 86)

VI. SERVICE INCENTIVE LEAVE (Art.95)

VII. SERVICE CHARGES (Art.96)

IX. RETIREMENT PAY (Art. 287 as amended by R.A. 7641)

X. 13th MONTH PAY (P.D. 851)

XI. MATERNITY BENEFITS (Social Security Law R.A. 8282)

XII. PATERNITY LEAVE (R.A. 8187)

XIII. BENEFITS UNDER THE EMPLOYEES

XIV. BENEFITS UNDER THE SOCIAL AMELIORATION

The Rules Implementing RA 6727 define the industrial sectors, as follows:

National Capital Region (NCR or Metro Manila)

DAILY MINIMUM WAGES

NATIONAL CAPITAL REGION

NATIONAL CAPITAL REGION

Non-Agriculture 12.00 118.00

NATIONAL CAPITAL REGION

Non-Agriculture 17.00 135.00 10.00 145.00

NATIONAL CAPITAL REGION

Non-Agriculture 16.00 161.00 4.00 165.00

NATIONAL CAPITAL REGION

Non-Agriculture 165.00 - 165.00

NATIONAL CAPITAL REGION

Non-Agriculture 15.00 180.00 5.00 185.00

NATIONAL CAPITAL REGION

Non-Agriculture 165.00 15.00 180.00 5.00 185.00

NATIONAL CAPITAL REGION

Non-Agriculture 185.00 - - 185.00

NATIONAL CAPITAL REGION

Non-Agriculture 185.00 13.00 198.00

NATIONAL CAPITAL REGION

Non-Agriculture 198.00 - - - - 25.50 223.50

C. Basis of Minimum Wage

D. Monthly-Paid Employees as Distinguished from Daily-Paid Employees

For monthly-paid employees:

where 365 days/year = 302 ordinary working days

For daily-paid employees:

Applicable Daily Rate x 391.50 = EMR

where 391.50 days/year = 302 ordinary working days

Applicable Daily Rate x 314 = EMR

where 314 days/year = 302 ordinary working days

Applicable Daily Rate x 262= EMR

where 262 days/year = 250 ordinary working days

F. Minimum Wage of Workers Paid by Results

1. Amount of increase in AMW ÷ Previous AMW x 100 = % increase

G. Minimum Wage of Apprentices, Learners and Handicapped Workers

H. Minimum Wage of Househelpers (R.A. 7655)

P 550.00 a month for those in other municipalities.

I. Effect of Reduction of Workdays on Wages

This benefit shall apply to all employees except:

For work within 8 hours:

Plus 100% of the daily basic rate of 100% or a total of 200%.

New Year’s Day January 1

C. National Special Days

All Saints Day November 1

Presidential Proclamation No. 1198 (26 October 1973) provides as follows:

G. Temporary or Periodic Shutdown/Cessation of Work

H. Holiday Pay of Certain Employees