BOOK THREE: CONDITIONS OF EMPLOYMENT COVERAGE: This Rule shall apply to all employers whether operating for

profit or not, including public utilities operated by private persons.

OVERVIEW OF BOOK III (Section 1, Rule III, Book III, IRR)
Title I – Working Conditions and Rest Periods
Title II – Wages BUSINESS OF SUNDAYS AND HOLIDAYS
Title III – Working Conditions for Special Groups of Employees
All establishments and enterprises may operate or open for business on
Sundays and holidays provided that the employees are given the weekly
TITLE I – WORKING CONDITIONS AND REST PERIODS rest day and the benefits as provided in this Rule. (Section 2, id.)
Chapter I – Hours of work
Chapter II – Weekly rest period OLD RULE (Blue Sunday Law; RA 946)
Chapter III – Holidays, SIL, and Service Charges
Except as herein otherwise provided, no commercial, industrial or
CHAPTER II & III Articles: agricultural enterprise or establishment, including stores and shops of
ART 91 – Right to weekly rest day any kind, shall be open on any Sunday, Christmas Day, New Year's Day,
ART 92 – When employer may require work on a rest day Holy Thursday, and Good Friday, from 12:00 midnight to 12:00 midnight
ART 93 – Compensation for rest day, Sunday or holiday work
ART 94 - Right to holiday pay CHOICE OF REST DAY
ART 95 – Right to service incentive leave
ART 96 – Service charges GR: Employer has the right to choose.

XPN: Employee has the right to choose if his preference is based on

BOOK III, IRR
Rule III – Weekly rest periods
Rule IV – Holidays with pay
Rule V – Service Incentive Leave
Rule Vi – Service Charges
ARTICLE 91. RIGHT TO WEEKLY REST DAY
(a) It shall be the duty of every employer, whether operating for profit or
not, to provide each of his employees a rest period of not less than
twenty-four (24) consecutive hours after every six (6) consecutive
normal work days.
(b) The employer shall determine and schedule the weekly rest day of
his employees, subject to collective bargaining agreement and to such
rules and regulations as the Secretary of Labor may provide. However,
the employer shall respect the preference of employees as to their
weekly rest day when such preference is based on religious grounds.
religious grounds.
XPN to XPN: Where, however, the choice of the employee as to his rest
day based on religious grounds will inevitably result in serious prejudice
or obstruction to the operations of the undertaking and the employer
cannot normally be expected to resort to other remedial measures, the
employer may so schedule the weekly rest day of his choice for at least
two (2) days in a month.
ARTICLE 92. WHEN EMPLOYER MAY REQUIRE WORK ON A REST
DAY
The employer may require his employees to work on any day:
(a) In case of actual or impending emergencies caused by serious
accidents, fire, flood, typhoon, earthquake, epidemic or other disaster or
calamity to prevent loss of life and property, or imminent danger to
public safety; 

(b) In cases of urgent work to be performed on the machinery,
equipment, or installation, to avoid serious loss which the employer (f) When the work is necessary to avail of favorable weather or
would otherwise suffer; 
 environmental conditions where performance or quality of work is
dependent thereon. Under other circumstances analogous or similar to
c) In the event of abnormal pressure of work due to special the foregoing as determined by the Secretary of Labor.
circumstances, where the employer cannot ordinarily be expected to
resort to other measures; 
 LIST UNDER THE IRR IS EXCLUSIVE

(d) To prevent loss or damage to perishable goods; 
 No employee shall be required against his will to work on his scheduled
rest day except under circumstances provided in this Section:
(e) Where the nature of the work requires continuous operations and
the stoppage of work may result in irreparable injury or loss to the Provided, However, that where an employee volunteers to work on his
employer; and 
 rest day under other circumstances, he shall express such desire in
writing, subject to the provisions of Section 7 hereof regarding
(f) Under other circumstances analogous or similar to the foregoing as additional compensation.
determined by the Secretary of Labor. 

COMPENSATION FOR REST DAY WORK
WHEN EMPLOYER MAY REQUIRE WORK ON A REST DAY (IRR)
Except those employees referred to under Section 2, Rule I, Book Three,
The employer may require his employees to work on any day: an employee who is made or permitted to work on his scheduled rest
day shall be paid with an additional compensation of at least 30% of his
(a) In case of actual or impending emergencies caused by serious regular wage.
accidents, fire, flood, typhoon, earthquake, epidemic or other disaster or
calamity to prevent loss of life and property, or in cases of force majeure An employee shall be entitled to such additional compensation for work
or imminent danger to public safety; performed on a Sunday only when it is his established rest day.

(b) In cases of urgent work to be performed on the machinery, REST DAY PREMIUM: Basic Daily Rate (BDR) x 1.30
equipment, or installation, to avoid serious loss which the employer
would otherwise suffer; Compensation for Rest Day Work

(c) In the event of abnormal pressure of work due to special
circumstances, where the employer cannot ordinarily be expected to
resort to other measures;
(d) To prevent serious loss of or damage to perishable goods;
(e)Where the nature of the work is such that the employees have to
work continuously for seven (7) days in a week or more, as in the case of
the crew members of a vessel to complete a voyage and in other similar
cases requires continuous operations and the stoppage of work may
result in irreparable injury or loss to the employer;
(a) Where the nature of the work of the employee is such that he has no
regular work days and no regular rest days can be scheduled, he shall be
paid an additional compensation of at least 30% of his regular wage for
work performed on Sundays and holidays.
(b) Work performed on any special holiday shall be paid with an
additional compensation of at least 30% of the regular wage of the
employees. Where such holiday work falls on the employee's scheduled
rest day, he shall be entitled to additional compensation of at least 50%
of his regular wage.
SPECIAL DAYS (2016) It is also intended to enable the worker to participate in the national
celebrations held during the days identified as with great historical and
 Chinese New Year (Feb 8) cultural significance.
 EDSA People Power Revolution (Feb 25)
 Black Saturday (Mar 26)
 Ninoy Aquino Day (Aug 21)
 All Saints Day (November 1) HOLIDAYS UNDER THE LABOR CODE:

New Year's Day (January 1), Maundy Thursday (Movable Date) 
Good
ADDITIONAL SPECIAL DAYS
Friday (Movable Date), Araw ng Kagitingan (April 9), Labor Day (May 1),
January 2; October 31; December 24; and December 31. Independence Day (June 12), Fil-American Friendship Day (July 4),
Bonifacio Day (November 30), Christmas (December 25) and the day
SPECIAL DAY PREMIUM: BDR x 1.30 designated by law for holding a general election.

REST DAY ON SPECIAL DAY: BDR x 1.50

HOLIDAYS UNDER EO 203:
Regular Holidays
ARTICLE 94. RIGHT TO HOLIDAY PAY
New Year's Day (January 1), Maundy Thursday (Movable Date), Good
(a) Every worker shall be paid his regular daily wage during regular Friday (Movable Date), Araw ng Kagitingan (April 9), Labor Day (May 1),
holidays, except in retail and service establishments regularly independence Day (June 12), National Heroes’ Day (Last Sunday of
employing less than ten (10) workers; August), Bonifacio Day (November 30), Christmas (December 25) and ,
Rizal Day (December 30) 

(b) The employer may require an employee to work on any holiday but
such employee shall be paid a compensation equivalent to twice his NATIONWIDE SPECIAL HOLIDAYS
regular rate; and 

1. All Saints’ Day (November 1) 

(c) As used in this Article, "holiday" includes: New Year's Day, Maundy 2. Last day of the Year (December 31) 

Thursday, Good Friday, the ninth of April, the first of May, the twelfth of HOLIDAYS UNDER RA 9492
June, the fourth of July, the thirtieth of November, the twenty-fifth of Regular Holidays
December and the day designated by law for holding a general election.

 1. New Year's Day (January 1) 

2. Maundy Thursday (Movable Date) 

Asian Transmission Corporation v. Court of Appeals, et al. 3. Good Friday (Movable Date) 

(425 SCRA 478) 4. EidulFitr (Movable Date) (*added by RA 9177) 

5. Araw ng Kagitingan (Monday nearest April 9) 

Its purpose is not merely "to prevent diminution of the monthly income 6. Labor Day (Monday nearest May 1) 

of the workers on account of work interruptions. In other words, 7. Independence Day (Monday nearest June 12) 

although the worker is forced to take a rest, he earns what he should 8. National Heroes’ Day (Last Monday of August) 

earn, that is, his holiday pay." 9. Bonifacio Day (Monday nearest November 30) 

10. Christmas (December 25) and 

11. Rizal Day (Monday nearest December 30) 
 (d) 'Id-ul-Fitr (Hari Raya Pausa) *** commemorating the end of the
Holidays under RA 9849 fasting season; and 

Regular Holidays (e) 'Id-ul-Adha (Hari Raya Haji) ***. 

1. New Year's Day (January 1) 

2. Maundy Thursday (Movable Date) 

3. Good Friday (Movable Date) 
 PROVINCES WHERE MUSLIM HOLIDAYS ARE OBSERVED
4. EidulFitr (Movable Date) 

5. EidulAdha (Movable Date) 
 • Basilan,
• LanaodelNorte, • LanaodelSur,
• Maguindanao,
•
6. Araw ng Kagitingan (Monday nearest April 9) 
 NorthCotabato,
7. Labor Day (Monday nearest May 1) 
 • SultanKudarat,
• Sulu,
• Tawi-Tawi,
• ZamboangadelNorte •
8. Independence Day (Monday nearest June 12) 
 ZamboangadelSur
9. National Heroes’ Day (Last Monday of August) 
 Muslim Holidays Provinces where officially observed
10. Bonifacio Day (Monday nearest November 30) 
 • Basilan,
• LanaodelNorte, • LanaodelSur,
• Maguindanao,
•
11. Christmas (December 25) and 
 NorthCotabato,
12. Rizal Day (Monday nearest December 30) • SultanKudarat,
• Sulu,
• Tawi-Tawi,
• ZamboangadelNorte •

 ZamboangadelSur
HOLIDAYS FOR 2016 (Proclamation1105)
Regular Holidays CITIES WHERE MUSLIM HOLIDAYS ARE OBSERVED
1. New Year's Day (January 1) 
 • Cotabato 

2. Maundy Thursday (March 24) 
 • Iligan 

3. Good Friday (March 25) 
 • Marawi 

4. Araw ng Kagitingan (April 9) 
 • Pagadian 

5. Labor Day (May 1) 
 • Zamboanga 

6. Eid’lFitr (Depends on Islamic Calendar) 
 • and in such other Muslim provinces and cities as may hereafter be
7. Eid’lAdha (Depends on Islamic Calendar) 
 created. (Art. 170, PD 1083) 

8. Independence Day (June 12) 

9. National Heroes’ Day (August29;Last Monday of August) 
 MUSLIM HOLIDAYS
10. Bonifacio Day (November 30) 

11. Christmas (December 25) and 
 Muslims outside of Muslim areas are entitled to Muslim holiday pay
12. Rizal Day (December 30) 
 during Muslim holidays.

Non-Muslims in Muslim areas are also entitled to Muslim holiday pay

MUSLIM HOLIDAYS 
(PD 1083; Code of Muslim Personal Laws of during Muslim holidays.
the Philippines.)

ARTICLE 169. Official Muslim holidays. — The following are hereby

recognized as legal Muslim holidays: RULES GOVERNING HOLIDAYS

(a) 'AmunJadid (New Year) ***; 
 (a) Every employer shall pay his employees their regular daily wage for
(b) Maulid-un-Nabi (Birthday of the Prophet Muhammad) ***; 
 any unworked regular holidays.
(c) LailatulIsraWalMi'raj (Nocturnal Journey and Ascension of the
Prophet Muhammad) ***; 
 [BDR x 1]
This is holiday pay.
(b) Any employee who is permitted or suffered to work on any regular
holiday, not exceeding eight (8) hours, shall be paid at least two hundred
percent (200%) of his regular daily wage.
[BDR x 2]
The second 100% is holiday premium.
(c) If the holiday work falls on the scheduled rest day of the employee,
he shall be entitled to an additional premium pay of at least 30% of his
regular holiday rate of 200% based on his regular wage rate.
[BDR x 2.6]
(d) For work performed in excess of eight hours on a regular holiday, an
employee shall be paid an additional compensation for the overtime
work equivalent to his rate for the first eight hours on such holiday work
plus at least 30% thereof.
st
[1 8 hours = BDR x 2] [Beyond 8 hours = BHR x 2.60]
(e) Where the regular holiday work exceeding eight hours falls on the
scheduled rest day of the employee, he shall be paid an additional
compensation for the overtime work equivalent to his regular holiday-
rest day for the first 8 hours plus 30% thereof. The regular holiday rest
day rate of an employee shall consist of 200% of his regular daily wage
rate plus 30% thereof.
st
[1 8 hours = BDR x 2.60] [Beyond 8 hours = BHR x 3.38]
(f) WherearegularholidayfallsonaSunday,the following day shall be
considered a special holiday for purposes of the Labor Code, unless said
day is also a regular holiday. (IRR)
– E.g. December 25, 2016 falls on a Sunday
(g) If the holiday falls on a Sunday, the holiday will be observed on the
Monday that follows. (RA 9492)
(h) All covered employees shall be entitled to the benefit provided
herein when they are on leave of absence with pay.
(i) 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 he has not worked on such regular holiday.
(j) 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.
(k) Where there are two (2) successive regular holidays, like Holy
Thursday and Good Friday, an employee may not be paid for both
holidays if he absents himself from work on the day immediately
preceding the first holiday, unless he works on the first holiday, in which
case he is entitled to his holiday pay on the second holiday.
(l) 2 simultaneous holidays.
Araw ng Kagitingan and Maundy Thursday in 1998.
“Since a worker is entitled to ten [now 12] paid regular holidays, the fact
that two holidays fall on the same date should not operate to reduce to
nine the ten holiday pay benefits a worker is entitled to receive.” (Asian
Transmission Corp. v. CA; GR 144664; March 15, 2004)
(m) 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 this Rule.
(n) The regular holiday during the cessation of operation of an
enterprise due to business reverses as authorized by the Secretary of
Labor and Employment may not be paid by the employer.
HOLIDAY PAY OF SOME EMPLOYEES
(a) Private school teachers, including faculty members of colleges and
universities, may not be paid for the regular holidays during semestral
vacations. They shall, however, be paid for the regular holidays during
Christmas vacation. [Non-hourlypaid]
(b) Employers of hourly paid teachers are exempted from paying the
latter their pay for regular holidays, whether the same be during the
regular semesters of the school or during semestral, Christmas, of Holy
Week vacations. (JRC v. NLRC; GR 65482, December 1, 1987.)
(c) Hourly paid teachers are entitled to their regular hourly rate on days
declared as special holidays or for some reason classes are called off or
shortened for the hours they are supposed to have taught, whether
extension days be ordered or not. In case of extensions, said faculty
teachers shall likewise be paid their hourly rates should they teach
during said extensions. (JRC v. NLRC; GR 65482, December 1, 1987.)
(d) Where a covered employee, is paid by results or output, such as
payment on piece work, 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.
(e) Seasonal workers may not be paid the required holiday pay during
off-season when they are not at work.
(f) Workers who have no regular working days shall be entitled to the
benefits provided in this Rule.
MONTHLY PAID EMPLOYEES
SECTION 2. Status of employees paid by the month. — Employees who
are uniformly paid by the month, irrespective of the number of working
days therein, with a salary of not less than the statutory or established
minimum wage shall be presumed paid for all days in the month
whether worked or not. 

For this purpose, the monthly minimum wage shall not be less than the
statutory minimum wage multiplied by 365 days divided by twelve. 
 ARTICLE 95. RIGHT TO SERVICE INCENTIVE LEAVE
Section 2, Rule IV, Book III of the IRR had already been declared null and
void as early as 1984.
Monthly-paid employees are entitled to holiday pay benefits.
The divisor (“x”) assumes an important role in determining whether or
not holiday pay is already included in the monthly paid employee's
salary and in the computation of his daily rate. (Union of Filipro
Emplyees v. Vivar, Jr.; GR 79256)
(Monthly rate x 12 months)/x = daily rate
[Daily Rate] x [No. of Paid Days] = [Annual Rate]
* If divisor is:
– 365 = paid for all the days of the year.
– For a 5-day workweek:

261 = holidays are paid (365 less 104 Saturdays and
Sundays)

249 = holidays are unpaid (261 less 12 Holidays).
– For a 6-day workweek:

313 = holidays are paid

301 = holidays are unpaid.
[The full monthly] salary is due and payable regardless of the
declaration of any special holiday in the entire country or a particular
place therein, or any fortuitous cause precluding work on any particular
day or days (such as transportation strikes, riots or typhoons or other
natural calamities), or cause not imputable to the worker. (Wellington
Investment and Mfg. Corp. v. Trajano; GR 114698)
(a) Every employee who has rendered at least one year of service shall
be entitled to a yearly service incentive leave of five days with pay. 

(b) This provision shall not apply to those who are already enjoying the
benefit herein provided, those enjoying vacation leave with pay of at
least five days and those employed in establishments regularly
employing less than ten employees or in establishments exempted from
granting this benefit by the Secretary of Labor after considering the
viability or financial condition of such establishment. 
• (c) The grant of
benefit in excess of that provided herein shall not be made a subject of
arbitration or any court of administrative action. 

COVERAGE:
(a) Same inclusions and exclusions except for:
– Those who are already enjoying the benefit herein provided;
– Those enjoying vacation leave with pay of at least five days; and
– Those employed in establishments regularly employing less than ten
employees.
(b) Supervised piece rate workers are entitled to SIL.
ONE YEAR OF SERVICE
The term "at least one-year service" shall mean service for not less than
12 months, whether continuous or broken reckoned from the date the
employee started working, including authorized absences and paid
regular holidays
If the working days in the establishment is less than 12 months -- as a
matter of practice or policy, or as provided in the employment contract -
- the said shorter period shall be considered as one year. (Sec. 3, Rule IV,
Book III, IRR)
USE AND CONVERSION
May be used for sick and vacation leave purposes.
Unused SIL 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
conversion. 

The use and conversion of this benefit may be on a pro rata basis. 

PRO RATA USE AND CONVERSION
OTHER LEAVES
 Maternity Leave (60 days for normal deliveries; 78 days for
Caesarian deliveries) 

 Paternity Leave (7 days) 

 Solo Parent’s Leave (7 working days) 

 VAWC Leave (10 days) 

 Special leave benefits for women (2 months) 

PATERNITY LEAVE
Every married male employee in the private sector shall be entitled to
paternity leave benefits of seven (7) days with full pay for the first four
deliveries by his lawful spouse under subject to the following conditions:
 he is an employee at the time of delivery of his child; 

 he is cohabiting with his spouse at the time she gives birth or
suffers a miscarriage. 

 he has applied for paternity leave; and 

 his wife has given birth or suffered a miscarriage. 

 For purposes of the PL, "cohabiting" means the obligation of the
husband and wife to live together.
  If the spouses are not physically living together because of the
workstation or occupation, the male employee is still entitled to
the paternity leave benefit.
 2012 Handbook on Workers’ Statutory Monetary Benefits
• Usage of the paternity leave shall 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) calendar days for each covered
delivery.
SOLO PARENTS LEAVE
A solo parent employee shall be entitled to the parental leave, provide
that:
 He/she has rendered at least one year (1) year of service,
whether continuous or broken; 
 cervix, uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor, as
 He/she has notifies his/her employer that he she will avail
himself/herself of it, within a reasonable period of time; and 
 ovariectomy and mastectomy.
 He/she has presented to his/her employer a Solo Parent
Identification Card, which may be obtained from the DSWD office
of the city or municipality where he/she resides. 
 with full pay based on her gross monthly compensation. Gross
• 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.
VAWC LEAVE
In addition to other paid leaves under existing labor laws, company
policies, and/or collective bargaining agreements, 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. 

The said leave shall be extended when the need arises, as specified in the
protection order issued by the barangay or the court. 

SPECIAL LEAVE BENEFIT FOR WOMEN
Any female employee regardless of age and civil status shall be entitled
to a special leave benefit subject to the following conditions:
 She has rendered at least six (6) months continuous aggregate
employment service for the last twelve (12) months prior to
surgery;
 She has filed an application for special leave with her employer
within a reasonable period of time from the expected date of
surgery or within such period as may be provided by company
rules and regulations or collective bargaining agreement; and
 She has undergone surgery due to gynecological disorders as
• “Gynecological disorders” refers to disorders that would require
surgical procedures such as, but not limited to dilatation and curettage
and those involving female reproductive organs such as the vagina,
certified by a competent physician. It shall also include hysterectomy,
 The employee is entitled to special leave benefit of two (2) months
monthly compensation refers to the monthly basic pay plus
mandatory allowances fixed by the regional wage boards. 

 The special leave shall be granted to the qualified employee after
she has undergone surgery without prejudice to an employer
allowing an employee to receive her pay before or during the
surgery. 

• The special leave shall be non-cumulative and non-convertible to cash
unless otherwise provided by a collective bargaining agreement
(CBA). 

Suguev. Triumph International (Phils), Inc.GR 164804 & 164784,
January 30, 2009
It is worth stressing that in the grant of vacation and sick leave
privileges to an employee, the employer is given leeway to impose
conditions on the entitlement to the same as the grant of vacation and
sick leave is not a standard of law, but a prerogative of management. It is
a mere concession or act of grace of the employer and not a matter of
right on the part of the employee. Thus, it is well within the power and
authority of an employer to deny an employee's application for leave
and the same cannot be perceived as discriminatory or harassment.
ARTICLE 96 SERVICE CHARGES
All service charges collected by hotels, restaurants and similar
establishments shall be distributed at the rate of eighty-five percent
(85%) for all covered employees and fifteen percent (15%) for
management.
The share of the employees shall be equally distributed among them. 
In
case the service charge is abolished, the share of the covered employees
shall be considered integrated in their wages. 
 employees not less than once every two (2) weeks or twice a month at
COVERED EMPLOYEES:
• This rule shall apply only to establishments collecting service charges
such as hotels, restaurants, lodging houses, night clubs, cocktail lounge,
massage clinics, bars, casinos and gambling houses, and similar
enterprises, including those entities operating primarily as private
subsidiaries of the Government.
• This rule shall apply to all employees of covered employers, regardless
of their positions, designations or employment status, and irrespective
of the method by which their wages are paid except to managerial
employees.
• As used herein, a "managerial employee" shall mean 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 shall
be considered rank-and-file employees.
DISTRIBUTION OF SERVICES CHARGED
• All service charges collected by covered employers shall be
distributed at the rate of 85% for the employees and 15% for the
management. 

• The 85% shall be distributed equally among the covered
employees. 

• The 15% shall be for the disposition by management to answer
for losses and breakages and distribution to 
managerial
employees at management in the latter case.
• The shares referred to herein shall be distributed and paid to the
intervals not exceeding sixteen (16) days.
INTEGRATION OF SERVICE CHARGES
In case the service charge is abolished the share of covered employees
shall be considered integrated in their wages. The basis of the amount to
be integrated shall be the average monthly share of each employee for
the past twelve (12) months immediately preceding the abolition of
withdrawal of such charges.
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.