General Labor Standards

2009-12-03 + Larger Font | - Smaller Font

What You Need To Know

For more information on the minimum wage rate per Region, please visit National
Wages and Productivity Commission website to view wage orders per region.

Minimum Wage

The current daily minimum wage for employees in the National Capital Region
(NCR) is PhP382.00, per Wage Order No. NCR-14 granting a wage increase of
PhP20.00 per day effective 28 August 2008.

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.

Special Days (e.g. Special (Non-Working) Holiday)

Special Days

During special days, the principle of "no work, no pay" applies and on such other
special days as may be proclaimed by the President or by the 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.

Executive Order No. 203 as amended by Republic Act No. 9492 lists down
three (3) special days that shall be observed in the country:

• Ninoy Aquino Day Monday Nearest Aug. 21

• All Saint's Day November 1
• Last day of the year December 31
Holiday Pay

Holiday Pay refers to the payment of the regular daily wage for any unworked
regular holidays.

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.

Under Executive Order No. 203, as amended by RA 9492, there are eleven
(11) regular holidays, namely:

• New Year's Day January 1

• Maunday Thursday Movable dates
• Good Friday Movable dates
• Araw ng Kagitingan April 9
• Labor Day May 1
• Bonifacio Day November 30
• Independence Day June 12
• National Heroes Day last Sunday of August
• Christmas Day December 25
• Rizal Day December 30
• E'dl Fi'tr Movable dates

Overtime Pay

Overtime Pay refers to the additional for work performed beyond eight (8) hours
a day.

Night Shift Differential

Night Shift Differential refers to the additional compensation of ten percent (10%)
of an employee's regular wage for each hour of work performed between
10:00PM and 6:00AM.

Computation of Wages
Computation of wages is governed by the following rules:

Computing Overtime:
On Ordinary Days
Plus 25% of the hourly rate multiplied by the number of hours.
On a rest day, special day or regular holiday
Plus 30% of the hourly rate on said days multiplied by the number of hours.

Computing pay for work done on:

A special day (130% x basic pay)

A special day, which is also a scheduled rest day (150% x basic pay)
A regular holiday (200% x basic pay)
A regular holiday, which is also a scheduled rest day (260% x basic pay)

Computing Night Shift Premium Where Night Shift is a Regular Work:

On Ordinary day (110% x basic hourly rate)
On a rest day, special day, regular holiday (110% of regular hourly rate for a
rest day, special day, regular holiday)

Computing Overtime on Night Shift:

On ordinary day (110% x overtime hourly rate)
On rest day, special day or regular holiday (110% x overtime hourly rate for
rest days, special days, regular holidays)

Computing 13th Month Pay:

Total basic salary earned for the year exclusive of allowances, overtime,
holiday, and night shift differential pay divided by 12 months = 13th month pay.

Service Incentive Leave

Every employee who has rendered at least one (1) year of service is entitled to a
yearly service incentive leave of five (5) days with pay.

This benefit does not apply to the following:

* government employees
* domestic helpers and persons in the personal service of another
* managerial employees
* field personnel and those whose time and performance is unsupervised by
the employer
* those already enjoying this benefits
* those enjoying vacation leave with pay of at least five (5) days
* those employed in establishments regularly employing less than ten (10)
employees
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.

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.

Paternity Leave

Paternity leave is granted to all married male employees in the private sector,
regardless of employment status, (e.g. probationary, regular, contractual, project-
based) 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.

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.

Maternity Leave

Every pregnant woman in the private sector, whether married or unmarried is

entitled to maternity leave of (60) days in case of normal delivery ,abortion or
miscarraige, or seventy-eight (78) days in case of caesarian section delivery with
benefits equivalent to 100% of the average daily salary credit of the employee as
defined under the Social Security Law
Parental Leave for Solo Parents

Parental leave for solo parents is granted to any solo parent or individual who is
left alone with the responsibility of parenthood to enable him/her to perform
parental duties and responsibilities where physical presence is required.

The parental leave in addition to leave privileges under existing laws, shall be for
seven (7) work days every year, with full pay, consisting of basic salary and
mandatory allowances fixed by the Regional Wage Board, if any, provided that
his/her pay shall not be less than the mandated minimum wage.

Emergency and contingency leave provided under a company policy or a

collective bargaining agreement shall not be credited as compliance with the
parental leave provided under Republic Act No. 8972.

Leave for Victims of Violence Against Women and Their Children

(VAWC)

VAWC leave is granted to private sector women employees who are victims as
defined in Republic Act No. 9262. The leave benefit shall cover the days that the
women employee has to attend to medical and legal concerns.

In addition to other paid leaves under existing labor laws, company policy, and/or
collective bargaining agreement, the qualified victim employee shall be entitled to
a leave of up to ten (10) days with full pay, consisting of basic salary and
mandatory allowances fixed by the Regional Wage Board, if any.

Service Charges

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 the management to answer for
losses and breakages and for distribution to managerial employees, at the
discretion of the management in the later case. Service charges are collected by
most hotels and some restaurants, night clubs, cocktail lounges, among others.

Separation Pay

Separation pay is given to employees in instances covered by Articles 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 Article
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.

13th Month Pay

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.

The Worker’s Basic Rights

Equal Work Opportunities for All

The State shall protect labor, promote full employment, provide equal work
opportunity regardless of gender, race, or creed; and regulate employee-
employer relations.

Male and female employees are entitled to equal compensation for work of equal
value and to equal access to promotion and training opportunities. Discrimination
against female employees is unlawful. It is also unlawful for an employer to
require a condition of employment that a woman employee shall not get married,
or to stipulate expressly or tacitly that a woman employee shall be deemed
dismissed upon marriage.

The minimum age of employment is 18 years for hazardous jobs, and 15 years
for non-hazardous jobs. But a child below 15 maybe employed by parents or
guardians in a non-hazardous job if the employment does not interfere with the
child's schooling.

Security of Tenure

Every employee shall be assured security of tenure. No employee can be

dismissed from work except for a just or authorized cause, and only after due
process.
Just Cause refers to any wrongdoing committed by an employee including:

1. serious misconduct
2. willful disobedience of employers' lawful orders connected with work
3. gross and habitual neglect of duty
4. fraud or willful breach of trust
5. commission of crime or offense against the employer, employer's family
member/s or representative
6. other analogous cases

Authorized Cause refers to an economic circumstance not due to the employee's

fault, including:

1. the introduction of labor-saving devices

2. redundancy
3. retrenchment to prevent losses
4. closure or cessation of business

Due Process in cases of just cause involves:

1. notice to employee of intent to dismiss and grounds for dismissal

2. opportunity for employee to explain his or her side
3. notice of decision to dismiss

In authorized causes, due process means written notice of dismissal to the

employee specifying the grounds, at least 30 days before the date of termination.

The inability of a probationary employee to meet the employer's prescribed

standards of performance made known to him or her at the time of hiring is also a
just cause for dismissal.

Work Days and Work Hours

Work Day refers to any day during which an employee is regularly required to
work. Hours of Work refer to all the time an employee renders actual work, or is
required to be on duty or to be at a prescribed workplace. The normal hours of
work in a day is 8 hours. This includes breaks or rest period of less than one
hour, but excludes meal periods, which shall not be less than one hour.

An employee must be paid his or her wages for all hours worked. If all or any part
of his or her regular work hours falls between 10:00 p.m. to 6:00 a.m., he or she
shall be entitled to a night shift pay in addition to his or her regular work hours, or
work for more than 8 hours in one day, he or she shall be entitled to overtime
pay, except when he or she is classified as managerial or field personnel, or is
one who works in the personal service of another, or is one who is paid by result.

An employee may not be compelled to work overtime except during war,

emergencies, disasters or calamities; when urgent repairs need to be
undertaken; when work is necessary to preserve perishable goods, avoid serious
obstruction or prejudice to the employer's business; or take advantage of
favorable weather conditions.

Weekly Rest Day

A day-off of 24 consecutive hours after 6 days of work should be scheduled by

the employer upon consultation with the workers.

Wage and Wage-Related Benefits

Wage is the amount paid to an employee in exchange for a task, piece of work,
or service rendered to an employer. This includes overtime, night differential, rest
day, holiday and 13th month pay. It also includes the fair and reasonable value of
board, lodging and other facilities customarily furnished by the employer.

Wage may be fixed for a given period, as when it is computed hourly, daily or
monthly. It may also be fixed for a specified task or result. If wage is for a fixed
period, the minimum wage for a regular 8-hour workday shall not be lower than
the minimum daily wage applicable to the place of work as determined by the
Regional Tripartite Wage and Productivity Board having jurisdiction over the
employer.

If wage is paid by result, the worker shall receive at least the prescribed minimum
wage for 8 hours of work. The amount may be increased or reduced
proportionately if work rendered for more or less than 8 hours a day.

An employer cannot make any deduction from an employee's wage except for
insurance premiums with the consent of the employee, for union dues, or for
withholding taxes, SSS premiums and other deductions expressly authorized by
law.

Payment of Wages

Wages shall be paid in cash, legal tender at or near the place of work. Payment
may be made through a bank upon written petition of majority of the workers in
establishments with 25 or more employees and within one (1) kilometer radius to
a bank. Payment shall be made directly to the employees.

Wages shall be given not less than once every two (2) weeks or twice within a
month at intervals not exceeding 16 days.

Employment of Women

Nightwork prohibition unless allowed by the Rules:

• in industrial undertakings from 10PM to 6AM

• in commercial/non-industrial undertakings from 12MN to 6AM
• in agricultural undertakings, at night time unless given not less than 9
consecutive hours of rest

Welfare facilities must be installed at the workplace such as seats, separate toilet
rooms, lavatories, dressing rooms.

Prohibition against discrimination with respect to pay (i.e. equal pay for work of
equal value), promotion, training opportunities, study and scholarship grants.

Employment of Children

Minimum employable age is 15 years of age. A worker below 15 should be

directly under the sole responsibility of parents or guardians; work does not
interfere with child's schooling/normal development.

No person below 18 years of age can be employed in a hazardous or deleterious

undertaking.

Safe Working Conditions

Employers must provide workers with every kind of on-the-job protection against
injury, sickness or death through safe and healthful working conditions.

Jobs may be hazardous or non-hazardous. Hazardous jobs are those which

expose the employee to dangerous environment elements, including
contaminants, radiation, fire, poisonous substances, biological agents and
explosives, or dangerous processes or equipment including construction, mining,
quarrying, blasting, stevedoring, mechanized farming and operating heavy
equipment.

Right to Self-Organization and Collective Bargaining

The right to self-organization is the right of every worker, free of any interference
from the employer or from government, to form or join any legitimate worker's
organization, association or union of his or her own choice. Except those
classified as managerial or confidential, all employees may form or join unions for
purposes of collective bargaining and other legitimate concerted activities. An
employee is eligible for membership in an appropriate union on the first day of his
or her employment.

Collective Bargaining involves two parties:

1. the representative of the employer

2. a union duly authorized by the majority of the employees within a
bargaining unit called exclusive bargaining agent.

It is a process where the parties agree:

1. to fix and administer terms and conditions of employment which must not
be below the minimum standards fixed by law
2. to set a mechanism for resolving their grievances

The result of collective bargaining is a contract called collective bargaining

agreement (CBA). A CBA generally has a term of five years. The provisions of a
CBA may be classified as political or economic. Political provisions refer to those
which define the coverage of the CBA and recognize the collective bargaining
agent as the exclusive representative of the employees for the term of the CBA.
Economic provisions refer to all terms and conditions of employment with a
monetary value. Economic provisions have a term of five years but may be
renegotiated before the end of the third year of affectivity for the CBA.

EC Benefits for Work-Related Contingencies

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. The benefits include:

• Medical benefits for sickness/injuries

• Disability benefits
• Rehabilitation benefits
• Death and funeral benefits
• Pension benefits

Rights to Safe and Health Conditions of Work

What does safety and health in the workplace mean?

Safety refers to the physical or environmental conditions of work which comply

with prescribed Occupational Safety and Health (OSH) Standards and which
allow the workers to perform the job without or within acceptable exposure limit to
hazards. Occupational safety also refers to practices related to production and
work process.

Health means a sound state of the body and mind of the workers that enables
the worker or employee to perform the job normally.

What does OSH Standards mean?

OSH Standards are mandatory rules and standards set and enforced to
eliminate or reduce occupational safety and health hazards in the workplace.

What is the purpose of OSH Standards?

OSH Standards aim to provide at least the minimum acceptable degree of

protection that must be afforded to every worker in relation to the working
conditions and dangers of injury, sickness or death that may arise by reason of
the worker's occupation. The provision of OSH Standards by the State is an
exercise of the police power, with the intention of promoting the welfare and well-
being of the workers.

What are covered by the General OSH Standards?

All establishments, workplaces and other undertakings are covered, including

agricultural enterprises whether operating for profit or not, except:

• Residential places exclusively devoted to dwelling purposes.

What does right to safe and healthful conditions of work mean?

It means that the worker shall be assured of effective protection against the
danger of injury, sickness or death through safe and healthful working conditions.

What is the minimum standard on safety and health in the

workplace?
The OSH Standards provide that every company shall keep and maintain its
workplace free from work hazards that are likely to cause physical harm to the
workers or damage to property. Thus, the worker is entitled to be provided by the
employer with:

• Appropriate seats, lighting and ventilation;

• Adequate passageways, exits and fire fighting equipment;
• Separate facilities for men and women;
• Appropriate safety devices like protective gears, masks, helmets, safety
boots, coats or first-aid kits;
• Medicines, medical supplies or first-aid kits;
• Free medical and dental services and facilities.

What other safety requirements should employers provide their

employees?

Employers must provide their employees with the following instruments and/or
working stations:

• Appropriate protective equipment and clothing such as overall head

coverings, goggles, gloves aprons and respirators;
• A properly designed exhaust system and waste disposal, local exhaust or
general ventilation to keep toxic fumes or gases;
• Adequate number of fire extinguishers in the workplace;
• Designated safe smoking and welding areas far from combustible, flammable
or explosive materials, containers filled with explosives or flammable substances,
and containers that have held explosives or flammable materials;

What safety measures must be observed within the premises of

establishments?

Establishments must observe the following safety measures:

• Building premises shall have adequate fire, emergency or danger signs and
safety instructions of standard colors and sizes visible at all times;
• Other visible signs that may be needed to direct the driver of motorized
vehicle such as STOP, YIELD, and DO NOT ENTER, properly positioned within
the compound of the establishment shall be used to increase safety especially
during the night;
• Handicapped employees shall be restricted only to designated workplaces. As
far as practicable and feasible they shall be provided with facilities for safe and
convenient movement within the establishment;
• Good housekeeping shall be maintained at all times through cleanliness of
building, yards, machines, equipment, regular waste disposal, and orderly
arrangement of process operations, storage and filing materials;
• Adequate dressing rooms, locker rooms, comfort rooms and lavatories
separate for male and female workers shall be provided.

Who enforces OSH Standards?

The Secretary of Labor and Employment, through the Regional Director or other
authorized representative, enforces the OSH Standards in the exercise of
victorial and enforcement powers.

What is visitorial power?

Visitorial power refers to the authority to conduct inspections or investigations at

the premises of an employer at any time of the day or night whenever work is
being undertaken. This is necessary to determine violations or to enforce the
rights of workers under the Labor Code. Under this power, the employer may be
required to submit reports and other documents to determine any violation.

• What is enforcement power?

Enforcement power refers to the authority of the Secretary or the Regional

Director to order an erring employer, after due notice and hearing, to comply with
labor standards and issue a writ of execution in case of non-compliance. If the
violation poses grave and imminent danger to the health and safety of workers,
suspension or cessation of the operations affected may be 24 hours from the
issuance of the order to determine whether or not the suspension or cessation of
the operations shall be lifted.

How are these Standards enforced?

These standards are enforced through the inspectorate system. Thus, every
employer shall give to the Secretary or his/her duly authorized representative
access to its premises or records at any time of the day or night when there is
work to determine and effect compliance.

Every establishment or workplace shall be inspected at least once a year.

However, special inspection visits may be authorized by the Regional Office to
investigate work-related accidents, occupational illness or dangerous
occurrences, conduct surveys, follow-up inspection recommendations, or to
conduct an investigations or inspections upon request of an employer, worker or
labor union in the establishment.

If a worker or representative of workers or any concerned person

believes that such a violation of the OSH Standards exists which
threatens physical harm or poses imminent danger to life, what
shall he do to correct the danger?
 The said worker or workers’ representative shall request an inspection with the
Regional Office in their area by giving full particulars or details regarding such
violation or danger.

What does the Regional Office do in such a case?

The Regional Office evaluates the report and conducts a special inspection or
investigation immediately in the subject establishment. The complainant is
notified in writing of the outcome of such investigation.

What are considered hazardous work place?

A workplace is deemed hazardous if:

• The nature of the work exposes workers to dangerous environmental

elements, contaminants or work conditions, including ionizing radiation,
chemicals, fire, flammable substances, noxious components, and the like;
• The workers are engaged in construction work, logging, fire-fighting, mining,
quarrying, blasting, stevedoring, dock work, deep-sea fishing and mechanized
farming;
• The workers use or are exposed to heavy or power-driven machinery or
equipment;
• The workers are engaged in the manufacture or handling of explosives and
other pyrotechnic products;
• The workers use or are exposed to biological agents such as bacteria, viruses
and other parasites.

What are the duties and responsibilities of the employers and the
employees in relation to enforcement and compliance with OSH
Standards in the workplace?

DUTIES OF THE EMPLOYERS

• Adopt administrative policies on safety in accordance with the provisions of

the Standards;
• Report to the Regional Director or his/her duly authorized representative the
policies adopted and the safety organization established;
• Submit report to the Regional Director or his/her duly authorized
representative once in every three months on the safety performance, safety
committee meetings and its recommendations and measures taken to implement
the recommendation;
• Act on recommended safety measures;
• Provide access to appropriate authorities.

DUTIES OF THE EMPLOYEES

• Follow safety policies;
• Report unsafe conditions and practices to the Supervisor;
• Serve as member of the Health and Safety Committee;
• Cooperate with Health and Safety Committee;
• Assist government agencies in the conduct of safety and health inspection.

What is a Safety and Health Committee?

A Safety and Health Committee is a group of employees or workers and

management that plans and makes policies in all matters pertaining to safety and
health in the workplace. All establishments are required to have a Safety and
Health Committee.

When shall an establishment organize a Safety and Health

Committee?

In every workplace, a Safety and Health Committee shall be organized within

sixty days after the Standards take effect, and for new establishments, within one
month from the date business starts operating. In both cases the Safety and
Health Committee shall reorganize every January of the following year:

What are the types and composition of Safety and Health

Committee?

The types and composition of the Safety and Health Committee shall be
organized according to the number of employees or workers in a workplace.

What are the duties of the Safety and Health Committee?

The Safety and Health Committee shall:

• Plan and develop accident prevention programs in the workplace;
• Inspect workplace to detect unsafe conditions;
• Review reports of inspection, results of accident investigations and
implementation of accident prevention program;
• Conduct safety meetings at least once a month;
• Submit report to the manager/owner on its meetings and activities;
• Provide necessary assistance to government inspecting authorities in the
proper conduct of activities relating to enforcement of the provisions of the
Standards;
• Train workers in safe work habits and procedures;
• Develop and maintain a disaster contingency plan and organize such
emergency service units as may be necessary to handle disaster situations
pursuant to the Emergency Preparedness Manual for Establishments of the
Office of Civil Defense.