Who are covered by the OT pay?

All employees in all establishments and undertakings whether for profit or not are entitled to overtime pay for work rendered beyond eight (8) hours. But this does not apply to 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. Employees in the government are also entitled to overtime pay but they are governed by Civil Service laws and rules. Only employees in the private sector are covered by the Labor Code.

Special rules for health personnel

For health personnel in (1)cities and municipalities with a population of at least one million (1,000,000) or in (2)hospitals and clinics with a bed capacity of at least one hundred (100), their normal hours of work are eight (8) hours a day, for five (5) days a week, exclusive of time for meals. (Article 83, LCP) Health personnel includes resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. Overtime work by health personnel included in the two abovementioned instances is, as a rule, not allowed since it involves strenuous physical work considering the number of patients or clients they must attend to. However, they may be compelled to work beyond such hours where the exigencies of the service require that they work for six (6) days or forty-eight (48) hours. But the employer is required to pay an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day.

Can an employee be compelled to render overtime?

Generally, employers cannot compel the employee to render overtime, except in certain instances (Sec 10, Rule I, Bk. III, IRR) to wit: 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, floods, typhoons, earthquake, epidemic or other disaster or calamities; 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 some other causes 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.

Can an employee insist to work overtime?

The employee cannot compel his employer to allow him to work overtime when the circumstances does not require him to do so as when there is actually no work to be performed.

Under time cannot be offset by overtime

Under time work on any particular day shall not be offset by overtime work on any other day (Article 88, LCP). The reason behind this is fairness. If the employee works for less than eight hours, he will be paid only for the corresponding number of hours he had actually worked. If on another day he works beyond the maximum hours, he should be given additional compensation. Non-payment of overtime pay is not only illegal but also contrary to public policy. The employer cannot use the overtime to offset the under time because payment of overtime pay is mandatory. However, he may either deduct the under time from the wage of the employee, or through other approaches. Although these methods are not provided by law, these may be found in company policies or established by company practices.

Computation of wages
The Department of Labor and Employment (DOLE) has set out the following rules in computing overtime pay, pay for work done on holidays, premium on nightshift and 13th month pay: 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.

Sample computation of Overtime Pay per Hour

Let us assume a regular daily wage rate of Php 404.00, what is the overtime rate per hour? On Ordinary days: First, lets compute for the hourly wage rate as follows: Regular hourly rate = Daily wage rate / 8 hours = P404/8 = P50.5 per hour Then, lets compute for the overtime rate per hour as follows: Overtime rate = hourly rate + 25% of hourly rate = P50.5 + (.25 x 50.5) =P50.5 + 12.65 =P63.125 per hour On a rest day and special day Computation of hourly wage rate: Hourly rate = 130% of Regular Hourly Rate = P50.5 x 1.3 = P65.65 per hour Computation of overtime rate: Overtime rate = Hourly rate + 30% of Hourly rate = P65.65 + (30% of P65.65) = P65.65 + P19.695 = P85.345 per hour On a rest day which falls on a special day Computation of hourly wage rate: Hourly rate = 150% of Regular hourly rate =P50.5 x 1.5 =P75.75 per hour Computation of overtime rate: Overtime rate = Hourly rate + 30% of Hourly rate = P75.75 + (30% of P75.75) = P75.75 + 22.725 = P98.475 On a regular holiday Computation of hourly wage rate: Hourly rate = 200% of Regular hourly rate =P50.5 x 2 =P101 per hour Computation of overtime rate:

Overtime rate = Hourly rate + 30% of Hourly rate =P 101 + (30% of P101) =P101 + 30.3 =P131.3 per hour On a rest day which falls on regular holiday Computation of hourly wage rate: Hourly rate = 260% of Regular hourly rate =P50.5 x 2.6 =P131.3 per hour Computation of overtime rate: Overtime rate = Hourly rate + 30% of Hourly rate =P 131.3 + (30% of P131.3) =P131.3 + 39.39 =P170.69 per hour Source: Department of Labor and Employment (DOLE) Philippines