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LABOR STANDARDS

LABOR STANDARDS

Refers to the minimum requirements prescribed by existing laws, rules and regulations and
other issuances relating wages, hours of work, cost of living allowances and other monetary
and welfare benefits, including those set by occupational safety and health standards.

1. 8 Hour Work (shall not exceed)


Hours worked shall include:
1. All time during which an employee is required
to be on duty
to be at a prescribed workplace and
2. 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.

2. Meal Pay

3. Holiday Pay
Except: Retail and service establishments regularly employing less than 10 workers

Includes: Employee who is paid by results and she works in a service establishment employing more
than 10 persons shall be paid holiday pay. (Sec. 8(b), Rule IV, Book III, IRRs)

Regular Holidays
1. New Years day - January 1
2. Maundy Thursday - Movable Date
3. Good Friday - Movable Date
4. Eidul Fitr - Movable Date
5. Araw ng Kagitingan - Movable Date nearest April 9
6. Labor day - Monday nearest May 1
7. Independence day - Monday nearest June 12
8. National heroes day - Last Monday of August
9. Bonifacio day - Monday nearest November 30
10. Christmas day - December 25
11. Rizal day - Monday nearest December 30

Nationwide Special Holidays


1. All Saints Day - November 1
2. Last Day of the Year - December 31
3. Ninoy Aquino Day - Monday nearest August 21

If required to work on reg. holidays = regular rate x

To receive holiday pay, the EE should not have been absent without pay on the working day
preceding the regular holiday. (Azucena)

A legal holiday falling on a Sunday creates no legal obligation for the ER to pay extra to the
EE who does not work on that day, aside from the usual holiday pay, to its monthly-paid
employee. (Wellington vs. Trajano)

4. Premium Pay
Is additional compensation for work rendered by the employee on days normally he should
not be working.
5. Weekly Rest Period
It shall be for the duty of every employer, whether operating for profit or not, to provide
employee a rest period of not less than 24 consecutive hours after every 6 consecutive
normal working days.
The employer shall determine and schedule the weekly rest day of his employees, however,
the employer shall respect the preference of employees as to their weekly rest day when
such preference is based on religion grounds.
Where however the choice of the employees as to their rest day based on religious grounds
will inevitably result in serious prejudice or obstruction to the operation of the undertaking,
the employer may so schedule the weekday rest day of their choice at least 2 days in a
month. (Sec. 4, Rule III, Book III, IRRs)

When ER may require Work on rest day [D U A - P N A] (Art. 92)


a. In case of actual or impending emergency caused by serious accident, fire, flood, typhoon,
earthquake, epidemic, or other Disaster or calamity to prevent loss of life, or imminent
danger to public safety.

b. In case of Urgent work, to avoid serious loss which the ER would otherwise suffer;

c. In the event of Abnormal pressure of work due to special circumstances, where the ER
cannot ordinarily be expected to resort to other measures;

d. To prevent or damage to Perishable goods;

e. Where the Nature of work requires continuous operations and stoppage of the work may
result in irreparable injury or loss to the ER; and

f. Analogous (avail of favorable weather) or similar circumstances

How much is a worker entitled if he works on a rest day?


Scheduled rest day additional compensation of at least 30% of his regular wage.

Scheduled rest day which is a non-working holiday entitled to additional compensation of


at least 50% of his regular wage.

Scheduled rest day which is a regular holiday entitled to additional compensation of at


least 30% of his regular holiday rate of 200% based on his regular wage rate. (Sec. 4, Rule
III, Book I, IRRs)

6. Service Incentive Leave


Except :
a. Those enjoying vacation leave with pay of at least 5 days.
b. Those employed in establishments regularly employing less than 10 workers
c. Exempt establishments.

can be converted to cash

5 days incentive leaves with pay for at least 1 year of service.


The term at least 1 year of service shall mean service within 12 months, whether continuous or
broken, reckoned from the date the EE started working, including authorized absences and paid
regular holidays unless the working days in the establishment as a matter of practice or policy, or that
provided in the employment contract are less than 12 months, in which case said period shall be
considered as 1 year. (Sec. 3, Rule V, Book III, IRRs)

7. Night Shift Deferential


Every EE shall be paid night shift differential of not less than 10% of his regular wage for
each hour of work performed between 10:00 p.m. and 6:00 a.m. (Art. 86)

Except: Employer with not more than 5 employees

8. Overtime Pay
Is additional compensation for work done beyond the normal work hours on ordinary
working days.
Regular work day plus 25% basic hourly rate
Special days, holiday or rest day plus 30% of the regular hourly rate on said days.

Emergency Overtime Work - Any EE may be required by the ER to perform overtime work in
any of the following cases: [WED-UPS]
a. When the country is at War

b. When any other national or local Emergency has been declared

d. When it is necessary to prevent loss of life or property or in case of imminent Danger to the
public safety due to an actual or impending emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake, epidemic or other Disaster or calamity.

e. When there is Urgent work to be performed on machines and installations in order to avoid
serious loss or damage to the ER or some other cause of similar nature.

f. When the work is necessary to prevent loss or damage to Perishable goods.

g. Where the completion or continuation of the work started before the 8th hour is necessary
to prevent Serious obstruction or prejudice to the business operations of the ER.

The EEs refusal to obey the order of the EE constitutes insubordination for which he may be
subjected to disciplinary action. (Alcantara)

Undertime work in any particular day shall not be offset by overtime work on another day
BUT not on someday.
Permission given to the EE to go on leave on some other day of the week shall not exempt
the ER from paying the additional compensation required. (Art. 88)

For purposes of computing overtime and other additional remuneration as required by this
Chapter the regular wage of an EE shall include the cash wage only, without deduction on
account of facilities provided by the ER. (Art. 90)

COVERAGE OF LABOR STANDARD


Applies to ALL employees in all establishments and undertakings whether for profit or not.

Except the following: (MOM GF WPD)

M Managerial Employees
a. Their primary duty consists of the management of the establishment in which they are
employed or of a department or sub-division thereof;

b. Customarily or regularly direct the work of 2 or more employees therein;

c. Has the authority to hire or fire other employees of lower rank; or their suggestions and
recommendations as to the hiring and firing and as to the promotion or any change of status
of other employees are given particular weight. [Sec 2(b), Rule I, Book III]
O Other Offices or Members of a Managerial Staf
a. Primary duty consists of the performance of work directly related to management policies of
the employer;

b. Customarily and regularly, exercise discretion and independent judgment;

c. Regularly directly assist a proprietor or managerial employee or execute under general


supervision work along specialized or technical lines requiring special training, experience or
knowledge; or execute under general supervision special assignment and tasks; and

d. Do not devote more than 20% of their hours worked to activities which are not directly and
closely related to the performance of the work described in the preceding paragraphs.

M Members of the Family of the Employer who are dependent of him for support
It refers not only to the real immediate members of he family of the employer but also to
those who are considered as family members in its loose sense, that is, those who are living
with the employer and dependent on him for support

G Government Employee
Whether employed by the National Government or any of its political subdivisions, including
those employed in GOCCs with original charters. (Sec. 2, Rule I, Book III, IRRs)

F Field Employee
Non-agricultural EEs who regularly perform their duties away from the principal place of
business or branch office of the ER whose actual hours of work in the field cannot be
determined with reasonable certainty (Art. 82)

W Workers Paid by Result


Compensation computed on the basis of work accomplished and not on time spent in
accomplishing the work.
a. Paid by Task (wholesale) those who are compensated on the basis of the completion or
accomplishment of a certain specified task.

b. Paid by Piece those who are compensated on the basis of units or piece of work they
produced and accomplished. The work process involved is usually repetitive and the
compensation is uniform per unit or per piece.

c. Paid Purely on Commission


P Persons in the personal service of another
Same as the Domestic Helper but includes not only domestic servants or house helpers but
drivers, valets and bodyguards as well.

D Domestic Helpers
Perform such services:
a. In the ERs home which are usually necessary or desirable for the maintenance or
enjoyment thereof;

b. Or minister to the personal comfort, convenience, or safety of the ER as well as the


members of his ERs household (Sec. 2, Rule I, Book III, IRRs)

However, house personnel hired by a ranking company official, but paid for by the company
itself, to maintain a staff house provided for the official, are not the latters domestic helpers
but regular EEs of the company. (Cadiz vs. Philippine Sinter)
13TH MONTH PAY
All land-based employers are required to pay all their rank-and- file employees a 13 th month
pay not later than December 24 of every year.
o 1/12 of the total basic salary earned by an EE within a calendar year.

o To be paid only to rank-and file employees regardless of the amount of their basic salary.

o Paid not later than December 24.

To be entitled to the 13th month pay benefit, it is imposed as a minimum service


requirement that employees, regardless of their designation or employment status and
irrespective of the method by which their wages are paid, should have worked r at for least
one (1) month during the calendar year.

It is possible that of the payment of 13 th month pay be given to employees before the
opening of the regular school year and the other half on or before 24 th day of December of
every year. The frequency of the payment of this monetary benefit may be subject of
agreement between the employer and the recognized CBA of the employees.

OFW is no entitled to 13th month pay in the absence of any provision in his employment
contract granting the payment thereof (Petroleum Shipping Limited v. NLRC, G.R. No.
148130, June 16, 2006)

An employee who has resigned or whose services were terminated at any time before the
time for payment of the 13th month pay is entitled to this monetary benefit 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 of service.
(Monthly Salary x # of months he worked during he year) / 12

Basic Salary (For purposes of computing the 13th month pay)


include remuneration or earnings paid by this ER for services rendered
but 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 or 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 the individual or collective agreement, company practice or
policy, the same are treated as part of the basic salary of the EEs.

The following are not entitled to 13th month pay:


(WPD G MES)

W Workers Paid by Result


Except: Paid by Piece Employee
D Domestic Helpers
P Persons in the personal service of another

G Government Employee
The government and any of its political subdivisions, including GOCCs, except those corporations
operating essentially as private subsidiaries of the government.

M Managerial Employees
E Employee being paid equivalent of 13th month pay
ERs already paying their EEs a 13 th month pay or more in a calendar year or its equivalent at the time
of this issuance.
The term its equivalent shall include Christmas bonus, mid-year bonus, cash bonuses and other
payments but shall not include cash and stock dividends, cost of living allowances and other
allowances regularly enjoyed by the EE, as well as non-monetary benefits. Where an ER pays less than
required 1/12th of the EEs basic salary, the ER shall pay the differences.

S Supervisory Employee
Have the following duties and functions:
a. Assist the department superintendent in various aspects of management such as in the
planning of systems and procedures;
b. Recommends disciplinary action against erring subordinates or promotion of deserving
personnel, train and guide subordinates;
c. Communicate and coordinate with other supervisors;
d. Recommend measures to improve work method; and
e. Other related tasks as may be assigned by his immediate superior.
They discharge duties and responsibilities which qualify them as members of the managerial
staff.

A distressed ER may qualify for exemption for the 13 th month pay if there is prior authorization from
the DOLE. (Dentech vs. NLRC)