Philippine Labor Laws

Normal Hours of Work

The normal hours of work under the Labor Code is 8 hours in one work day. Work day is
understood to mean one 24-hour cycle which starts from the time the employee is engaged
to work and ends on the same time the following day. For example, if the employee is
engaged to work from 8:00am to 5:00pm, his work day is the 24-hour cycle that starts from
8:00am and ends at 8:00am of the following day.
The employer is free to adopt what time in a day the work shall start as long as the total
number of hours worked will not exceed 8 hours. If the number of hours worked exceed 8
hours, the employee must be paidovertime pay for the excess. How to compute overtime
pay?
Hours worked definition
Hours worked refers to all compensable period of work. Hours work includes:
1.

All the time during which an employee is required to be on duty or to be at a

prescribed workplace; and

2.

All the time during which an employee is suffered or permitted to work.

Meal periods
The employer must give his employees not less than 60 minutes or one hour time-off for
their meals. This period in noncompensable, which means that it is not to be included in the
computation of hours worked. For example, if an employees work is from 8:00am to 5:00
with one hour meal break from 12:00nn to 1:00pm, the total compensable hours of the
employee is 8 hours, i.e., from 8:00am 12:00nn and 1:00pm 5:pm. The period from
12:00nn to 1:00pm is noncompensable.
Shortened meal periods
Under exceptional circumstances, the employer may give the employee a meal period of not
less than 20 minutes, provided that such shorter meal period is credited as compensable
hours worked of the employee.
Shortened meal period may be allowed under the following cases:

1.

Where the work is non-manual work in nature or does not involve strenuous physical
exertion;

2.

Where the establishment regularly operates not less than 16 hours a day;

3.

In case of actual or impending emergencies or there is urgent work to be performed

on machineries, equipment or installations to avoid serious loss; and

4.

Where the work is necessary to prevent serious loss of perishable goods.

Rest periods
The employer may give their employees rest periods or coffee breaks during working hours
in order to beef them up or to make them more productive. Unlike meal periods, rest periods

running from 5 to 20 minutes is compensable as hours worked. Rest period running for more
that 20 minutes may or may not be compensable depending on the situation. See letter (b)
under Principles in determining hours worked.
The giving of rest period, however, is not required under the Labor Code, and is largely a
management prerogative.
Principles in determining hours worked
The following general principles may be used to determine whether the time spent by an
employee is considered hours worked or not:
1.

All hours are hours worked which the employee is required to give his employer,
regardless of whether or not such hours are spent in productive labor or involve physical or
mental exertion.

2.

An employee need not leave the premises of the work place in order that his rest
period shall not be counted, it being enough that he stops working, may rest completely and
may leave his work place, to go elsewhere, whether within or outside the premises of his
work place.

3.

If the work performed was necessary, or it benefited the employer, or the employee
could not abandon his work at the end of his normal working hours because he had no
replacement, all time spent for such work shall be considered as hours worked, if the work
was with the knowledge of his employer or immediate supervisor.

4.

The time during which an employee is inactive by reason of interruptions in his work
beyond his control shall be considered working time either if the imminence of the
resumption of work requires the employees presence at the place of work or if the interval
is too brief to be utilized effectively and gainfully in the employees own interest.
Waiting time
Waiting time spent by an employee shall be considered as working time if waiting is an
integral part of his work or the employee is required or engaged by the employer to wait.
On call duty
An employee who is required to remain on call in the employers premises or so close
thereto that he cannot use the time effectively and gainfully for his own purpose shall be
considered as working while on call. The employee must be required to leave a word where
he may be reached. An employee who is not required to leave word at his home or with
company officials where he may be reached is not working while on call.
Lectures, meetings, training programs
Attendance at lectures, meetings, training programs, and other similar activities shall not be
counted as working time if all of the following conditions are met:

1.

Attendance is outside of the employees regular working hours;

2.

Attendance is in fact voluntary; and

3.

The employee does not perform any productive work during such attendance.
References

1.

Chapter 1, Title I, Book Three, Labor Code of the Philippines (Article 82 to 85)

2.

Rule I, Book Three, Omnibus Rules Implementing the Labor Code.

HOURS OF WORK OF EMPLOYEES

Article 83 of the Labor Code enunciates that the normal hours of work of any employee shall
not exceed eight (8) hours a day. This is exclusive of the one (1) hour lunch break. The
Supreme Court explained the rationale of this provision to safeguard the welfare of
employees and to minimize unemployment.
It must be emphasized that work hours exceeding eight (8) hours can still be done provided
that there is an arrangement between the employer and employee for work beyond 8 hours
and that the corresponding overtime pay is given. An employee who performs work
exceeding eight (8) hours is entitled to an additional compensation equivalent to his regular
wage plus at least 25% thereof.
Under Article 84 of the Labor Code, hours worked shall include (a) all time during which an
employee is required to be on duty or to be at a prescribed workplace; and (b) all time
during which an employee is suffered or permitted to work. Rest periods of short duration
during working hours shall be counted as hours worked.
Under the Implementing Rules of the Labor Code, the following general principles shall
govern in determining whether the time spent by an employee is considered hours worked
for purposes of this Rule:
(a) All hours are hours worked which the employee is required to give his employer,
regardless of whether or not such hours are spent in productive labor or involve physical or
mental
exertion.
(b) An employee need not leave the premises of the work place in order that his rest period
shall not be counted, it being enough that he stops working, may rest completely and may
leave his work place, to go elsewhere, whether within or outside the premises of his work
place.
(c) If the work performed was necessary, or it benefited the employer, or the employee
could not abandon his work at the end of his normal working hours because he had no
replacement, all time spent for such work shall be considered as hours worked, if the work
was
with
the
knowledge
of
his
employer
or
immediate
supervisor.
(d) The time during which an employee is inactive by reason of interruptions in his work
beyond his control shall be considered working time either if the imminence of the

resumption of work requires the employees presence at the place of work or if the interval
is too brief to be utilized effectively and gainfully in the employees own interest.
Pertinently, waiting time spent by an employee shall also be considered as working time if
waiting is an integral part of his work or the employee is required or engaged by the
employer to wait. For example, a company driver who spends his time waiting for his boss in
the office is considered to be working.
Furthermore, an employee who is required to remain on call in the employers premises or so
close thereto that he cannot use the time effectively and gainfully for his own purpose shall
be considered as working while on call. On the other hand, an employee who is not required
to leave word at his home or with company officials where he may be reached is not working
while on call.
As for travel time, travel from home to office and vice-versa is not compensable. However,
travel away from home on official duty is considered as compensable.
With regard to attendance at lectures, meetings, training programs, and other similar
activities, it shall not be counted as working time if all of the following conditions are met:
(a)
Attendance
is
outside
of
the
employees
regular
working
(b)
Attendance
is
in
fact
voluntary;
(c) The employee does not perform any productive work during such attendance.

hours;
and

Anent employee meal time, the Labor Code mandates that every employer shall give his
employees, not less than one (1) hour time-off for regular meals, except in the following
cases when a meal period of not less than twenty (20) minutes may be given by the
employer provided that such shorter meal period is credited as compensable hours worked
of the employee:
(a) Where the work is non-manual work in nature or does not involve strenuous physical
exertion;
(b) Where the establishment regularly operates not less than sixteen (16) hours a day;
(c) In case of actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise
suffer;
and
(d) Where the work is necessary to prevent serious loss of perishable goods.
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be
considered as compensable working time.
It is worthy to note that the above provisions on the hours of work shall apply to employees
in all establishments and undertakings whether for profit or not. However, it does not cover
government employees, managerial employees, field personnel, members of the family of

the employer who are dependent on him for support, domestic helpers, persons in the
personal service of another, and workers who are paid by results. Managerial employees
refer to those whose primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof, and to other officers or
members of the managerial staff. On the other hand, field personnel shall refer to nonagricultural employees who regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of work in the field cannot
be determined with reasonable certainty.
Nicolas & De Vega Law Offices is a full-service firm located at the 16th Flr., Suite 1607 AIC
Burgundy Empire Tower, ADB Ave., Ortigas Center, Pasig City, Metro Manila, Philippines. You
may call any of our labor lawyers and attorneys at +632 4706126 or visit our
website www.ndvlaw.com.

FAQs: Overtime Policies in the Philippines

Monday, February 17, 2014

Among the many challenges facing a business owner in the Philippines is

learning and applying the Philippine standard labor codes and policies.
Regarding overtime policies - can employees be required to render overtime,
and if so, how much compensation should be given? As a business owner,
you do not want to break the law by overworking and underpaying your
employees, just as you wouldn't want to overpay for a product or service.
To help out entrepreneurs starting a business or currently running one in the
Philippines, we've answered some of the frequently asked questions about
the Philippine Labor Code and its overtime policies:
A. How much should I pay to Filipino employees who work overtime? How is
the overtime pay computed?
Overtime pay computation varies depending on the day that the overtime
was rendered. Here are sample computations given a base pay of Php
18,000 (factor rate of 258, composed of 246 total regular days plus 12 legal
holidays):
1.
Ordinary days (Regular workdays with no government declared
holidays)
Number of hours in excess of 8 hours (125% x hourly rate x number of
hours rendered)

e.g. Monthly rate: 18,000

Daily rate: 18,000 x 12 / 258= Php837.21
Hourly rate (8 hours): 837.21 / 8= Php 104.65
Overtime hourly rate: 1.25 x 104.65= Php 130.81/hour
2.
Rest days (Weekends or days when the employee should be off-duty)
First eight hours is 130%, in excess of 8 hours is 169% per hour
e.g. Monthly rate: 18000
Daily rate: 18,000 x 12 / 258= Php 837.21
First eight hours: ((18,000 x 12) / 258) x 1.3 = 1,088.37
In excess of eight hours: [((18,000 x 12) / 258) x 1.69]/8 = 176.86 per
hour
3.
Special days (Non-working days declared in observance of tradition
usually: All Saints' Day, Last Day of the Year, and Ninoy Aquino Day)
a. A special day (130% x basic pay)
e.g. Monthly rate: 18000 x 1.3 = Php 23400
Special day premium pay: (assuming there are 20 working days in a
month): 23400/20 working days= Php 1170/day
b. A special day, which is also a scheduled rest day (150% x basic pay)
e.g. Monthly rate: 18000 x 1.5 = Php 27000
Special and rest day premium pay (assuming there are 20 working days in
a month): 27000/20 working days= Php 1350/day
4.
Regular holidays (These are non-working days which are usually
observed nationwide i.e. Christmas Day, New Year's Day, Holy Week, etc.)
a. A regular holiday (200% x basic pay)
e.g. Monthly rate: 18000 x 2 = Php 36000
Holiday pay (assuming there are 20 working days in a month): 36000/20
working days= Php 1800/day
b. A regular holiday, which is also a scheduled rest day (260% x basic pay)
e.g. Monthly rate: 18000 x 2.6 = Php 46800
Premium pay (assuming there are 20 working days in a month): 46800/20
working days= Php 2340/day
B. How do you compute overtime for Filipino employees working the night
shift?
Night shift overtime is higher, especially since working at night poses more
risk on the employee's safety and health. Here are sample computations
given a basic pay of Php18,000:
1.
Ordinary days (Regular workdays with no government declared
holidays)
110% x Number of hours in excess of 8 hours (130% x hourly rate)

e.g. Monthly rate: 18000

Daily rate (assuming there are 20 working days in a month): 18000/20=
Php900
Hourly rate (8 hours): 900/8= Php 112.5
Night shift overtime hourly rate: 1.1 x (1.30 x 112.5)= Php 160.88/hour
2.
Rest days (Weekends or days when the employee should be off-duty)
110% x Number of hours in excess of 8 hours (130% x hourly rate)
e.g. Monthly rate: 18000
Daily rate (assuming there are 20 working days in a month): 18000/20
working days= Php900
Hourly rate (8 hours): 900/8= Php 112.5
Night shift overtime hourly rate: 1.1 x (1.30 x 112.5)= Php 160.88/hour
3.
Special days (Non-working days declared in observance of tradition
usually: All Saints' Day, Last Day of the Year, and Ninoy Aquino Day)
a. A special day 110% x (130% x basic pay)
e.g. Monthly rate: 18000 x 1.3 = Php 23400
Special day premium pay, night shift: (assuming there are 20 working days
in a month): 1.1 x (23400/20)= Php 1287/day
b. A special day, which is also a scheduled rest day 110% x (150% x basic
pay)
e.g. Monthly rate: 18000 x 1.5 = Php 27000
Special and rest day premium pay (assuming there are 20 working days in
a month): 1.1 x (27000/20)= Php 1485/day
4.
Regular holidays (These are non-working days which are usually
observed nationwide i.e. Christmas Day, New Year's Day, Holy Week, etc.)
a. A regular holiday (200% x basic pay)
e.g. Monthly rate: 18000 x 2 = Php 36000
Holiday pay (assuming there are 20 working days in a month): 1.1 x
(36000/20) = Php 1980/day
b. A regular holiday, which is also a scheduled rest day (260% x basic pay)
e.g. Monthly rate: 18000 x 2.6 = Php 46800
Premium pay (assuming there are 20 working days in a month): 1.1 x
(46800/20) = Php 2574/day
C. Can employers require overtime?
Generally, the law discourages employers from requiring overtime because it
puts undue stress on their employees - aside from exerting additional
physical and mental effort, the employee is also unable to maintain work-life
balance if he spends too much time in the office. However, employers are
allowed to require overtime during the following circumstances:

1.

When the country is at war or when any other national or local

emergency has been declared by the National Assembly or the Chief
Executive;

2.

When overtime work is necessary to prevent loss of life or property, or

in case of imminent danger to public safety due to actual or impending
emergency in the locality caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster or calamity;

3.

When there is urgent work to be performed on machineries,

installations, or equipment, in order to avoid serious loss or damage to the
employer or something of similar nature;

4.

When the work is necessary to prevent loss or damage to perishable

goods;

5.

When the completion or continuation of work started before the 8th

hour is necessary to prevent serious obstruction or prejudice to the
business or operations of the employer;

6.

When overtime work is necessary to avail of favorable weather or

environmental conditions where performance or quality of work is
dependent thereon.

D. Is there a limit to allowable overtime hours?

Yes, all employees can render only up to eight (8) overtime hours except
those who are in the managerial positions, field personnel, persons in
personal service of another, members of the employer's family who are
dependent on them for support, domestic helpers, and employees who are
paid by the results.
E. Can an employee insist on working overtime?
No. The employee cannot compel his employer to allow him to work overtime
when the circumstance does not require that or when there is actually no
work to be performed.
F. If an employee filed for undertime, can he offset it with overtime?
No. If the employee works for less than eight hours, he will be paid only for
the corresponding number of hours he actually worked. Employers cannot
avoid paying overtime rates through offset. However, they may either deduct
the undertime from the wage of the employee, or through other approaches.
Does this seem too overwhelming or complicated to you? You need to invest
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can compute your employees' overtime pay and monthly salary within
minutes.
This entry was written by vincent, posted on Monday, February 17, 2014 Bookmark the permalink.