LABOR STANDARDS

(Conditions of
Employment pt. 2)

Atty. Stephanie Joy A. Rolusta-Valdez

DMMMSU-MLUC College of Law
Meal Periods

Every Er shall give his Ees not less than 60 minutes

or 1 hour time off for regular meals (LC, Art. 85)

Regular meals can be taken inside or outside

company premises.
Compensable • It is compensable when the lunch period
or mealtime is;
Meal Period 1. When it is predominantly spent for the
Er’s benefit; or
2. When it is less than 60 minutes.
Where Meal Periods are Shortened:
Compensable or Not Compensable

1. Compensable – at the instance of the Er, when:

a. Work is non-manual in nature or does not involve strenuous
physical exertion;
b. Establishment regularly operates less than 16 hours a day;
c. Work is necessary to prevent serious loss of perishable
goods;
d. Actual or impending emergency or there is urgent work to
be performed on machineries and equipment to avoid
serious loss which the Er would otherwise suffer.
Where Meal Periods are Shortened:
Compensable or Not Compensable
2. Not Compensable – Ee requested for shorter mealtime so that
he can leave work earlier than the previously established
schedule.
Requisites:

a. Ees voluntarily agree in writing and are willing to waive OT pay for
the shortened meal period;

b. No diminution in the salary and other fringe benefits of the Ees

which are existing before the effectivity of the shortened meal period;
Requisites:

c. Work of the Ees does not involve strenuous physical exertion and they are provided with adequate
coffee breaks in the morning and afternoon;

d. Value of the benefits derived by the Ees from the proposed work arrangements is equal to or
commensurate with the compensation due them for the shortened meal period as well as the OT pay for
30 min. as determined by the Ees concerned;
Requisites:

e. OT pay will become due and demandable after the

new time schedule;

f. Arrangement is of temporary duration.

If the mealtime is less than 20 minutes, it becomes

only a rest period and is considered working time.
NIGHT SHIFT DIFFERENTIAL

• Every employee shall be paid a night shift differential of

not less than ten percent (10%) of his regular wage for
each hour of work performed between 10:00 PM and 6:00
AM.
 Those of the government and any of its
political subdivisions, including GOCCs;

Those of retail and service establishments

regularly employing not more than five (5)
General Rule: workers;
All employees
are entitled to Domestic helpers and persons in the personal
NSD. service of another;
 4. Managerial employees as defined in Book Three of
this Code;

General
Rule: All 5. Field personnel and other employees whose time and
performance of is unsupervised by the employer
employees including those who are engaged on task or contract
basis, purely commission basis or those who are paid
are entitled with a fixed amount for performing work irrespective of

to NSD. the time consumed in the performance thereof.

Note

Where the nighttime work of an

employee overlaps with overtime work,
the receipt of overtime pay does not
preclude the receipt of night differential
pay. The latter is night pay/ NSD while
the former is payment beyond eight hour
of work.
Overtime Work, Overtime
Pay
Overtime work consists of hours worked on a given day
in excess of the applicable work period, which is eight
(8) hours.

It is not enough that the hours worked fall on

disagreeable or inconvenient hours. In order that work
may be considered as overtime work, the hours worked
must be in excess of and in addition to the eight (8)
hours worked during the prescribed daily work period, or
the forty (40) hours worked during the regular work
week Monday thru Friday.
Article 87. Overtime work.

• Work may be performed beyond eight (8) hours

a day provided that the employee is paid for the
overtime work, an additional compensation
equivalent to his regular wage plus at least
twenty-five percent (25%) thereof. Work
performed beyond eight hours on a holiday or
rest day shall be paid an additional
compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at
least thirty percent (30%) thereof. (Labor Code)
Overtime Pay
Additional compensation of at least (25%) of the regular wage for the
service or work rendered or performed in excess of eight (8) hours.

Based on regular base pay excluding money received by the employee in

different concepts such as Christmas bonus and other fringe benefits.

It is computed by multiplying the overtime hourly rate by the number of

hours in excess of eight.

General Rule: Express instruction from the Er to the Ee to render OT

work is not required for the Ee to be entitled to OT pay; it is sufficient
that the Ee is permitted or suffered to work.

However, WRITTEN AUTHORITY after office hours during rest days and
holidays are required for entitlement to compensation.
 Ee is made to work longer than what is
commensurate with his agreed compensation
for the statutory fixed or voluntarily agreed
hours of labor he is supposed to do.

Law on overtime will ease unemployment

Rationale of problem, for employers will be constrained to

employ additional employees to work in other
Overtime shifts necessary for the operation of the
business.
Pay
 Xpn: Compulsory Overtime
• When the country is at war or when any other
national or when any other national or local
emergency has been declared by Congress or the
General Rule: Chief Executive;

The employee • When overtime work is necessary to prevent loss of

live or property or in case of imminent danger to
may not be
public safety due to actual or impending emergency
compelled to in the locality caused by serious accident, fire,
work for more floods, typhoon, earthquake, epidemic, or other
than eight (8) disaster or calamities;
hours a day.
 Xpn: Compulsory Overtime
• When there is urgent work to be performed on machines,
installations, or equipment, in order to avoid serious loss or
damage to the employer or some other causes of similar
nature;

General Rule: • When the work is necessary to prevent loss or damage to

perishable goods;
The employee
• When the completion or continuation of work started before
may not be the 8th hour is necessary to prevent serious obstruction or
compelled to prejudice to the business or operations of the employer; or

work for more • When overtime work is necessary to avail of favorable

weather or environmental conditions where performance or
than eight (8) quality of work is dependent thereon.
hours a day.
Note:

In cases not falling within any of these enumeration in this Section, no

employee may be made to work beyond eight hours a day against his will.

The employee may still refuse to render overtime even if compelled, although
not without disciplinary consequence for his refusal that could constitute
insubordination, a potential ground for termination of employment.
Overtime Pay Overtime Pay Premium Pay
Additional Additional
v. Premium compensation for work compensation for work
performed beyond performed within eight
Pay eight hours on hours on days when
ordinary days (within normally he should not
the worker’s 24-hour be working (on non-
workday) working days, such as
rest days and special
days). But additional
compensation for work
rendered in excess of
eight hours during
these days is also
considered OT pay.
Overtime Pay Rates
OVERTIME PAY RATES

During a regular working day Additional compensation of 25% of the regular

wage
During a holiday or rest day Rate of the first eight hours worked on plus at
least 30% of the regular wage (RW);

If done on a special holiday OR rest day;

30% of 130% of RW;

If done on a special holiday AND rest day; 30% of

150% of RW

If done on a regular holiday: 30% of 200% of RW

Undertime Not Offset by Overtime

• Article 88. Undertime not offset by overtime . Undertime

work on any particular day shall not be offset by overtime
work on any other day. Permission given to the employee
to go on leave on some other day of the week shall not
exempt the employer from paying the additional
compensation required in this Chapter.
 The rule will prevent the anomalous situation whereby
an employee could schedule his working hours at will
thereby destroying the regular working schedules.

To allow offsetting would prejudice the worker. He

would be deprived of the additional pay for the rest day
work he has rendered and which is utilized to offset his
equivalent time off on regular workdays. To allow
employer to do so would be to circumvent the law on

Rationale payment of premiums for rest day and holiday work.

Emergency
Overtime Work
General Rule: An
Ee may not be
compelled to
render OT work; OT
work is voluntary.
XPNs:
1) When the country is at war or when any other national or when any other national or local emergency has been declared by Congress or
the Chief Executive;

2) When overtime work is necessary to prevent loss of live 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, typhoon, earthquake, epidemic, or other disaster or calamities;

3) When there is urgent work to be performed on machines, 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; or

6) When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is
dependent thereon.
Weekly Rest Day (WRD)

• Every Er shall give his Ees a rest period of not

less than 24 consecutive hours after every 6
consecutive normal work-days.
• Rest day not necessarily Saturday or Sunday.
• All establishments and enterprises may
operate or open for business on Sundays and
holidays provided that the employees are
given the weekly rest day and the benefits
provided under the law.
Persons who
determine the WRD
General Rule: Er shall
determine and schedule the
WRD of his Ee.
Persons who determine the WRD

XPNs:
1. CBA;
2. Rules and regulations as the Secretary of Labor and Employment provides;
3. Preference of the Ee based on religious grounds. Ee shall make known his preference in writing
at least seven (7) days before the desired effectivity of the initial rest day so preferred.
XPN to the XPN no. 3:
- Er may schedule the WRD of his choice for at least two (2) days in a month if the presence of the
Ee will inevitably result in:
a. Serious prejudice to the operations of the undertaking; and
b. The Er cannot normally b expected to resort to other remedial measures.
Emergency Rest Day Work General Rule: The Ee cannot
be compelled by the Er to
work on his rest day.
 In case of actual or impending
emergencies caused by serious accident,
fire, flood, typhoon, earthquake, epidemic
or other disaster or calamity to prevent
loss of life and property, or imminent
danger to public safety;
In cases of urgent work to be performed
on the machinery, equipment, or
installation, to avoid serious loss which
the employer would otherwise suffer;

In the event of abnormal pressure of work

due to special circumstances, where the To prevent loss or damage to perishable
employer cannot ordinarily be expected to goods;
resort to other measures;

Where the nature of the work requires

Under other circumstances analogous or
continuous operations and the stoppage
similar to the foregoing as determined by
of work may result in irreparable injury or
the Secretary of Labor and Employment.

XPNs:
loss to the employer; and
It is the additional compensation for the work
rendered by the Ee on days when normally he
Premium Pay
should not be working such as special holidays
and WRDs.

Refers to the additional compensation required

by law to be paid for work performed within the
regular eight (8) hours on non-working days
such as rest days and special holidays.

Refers to the regular wage combined with the

additional compensation of 30% under Art. 93
and under 100% under Art. 94.
 INSTANCES RATES OF ADDITIONAL COMPENSATION

Work on a scheduled rest day +30% premium pay of 100% regular wage
(IRR, Book III, Rule III, Section 7)
Work performed on Sundays and Holidays +30% premium pay of 100% regular wage
by an Ee who has no regular workdays (IRR, Book III, Rule III, Section 7)
and rest days
Work on a Sunday (If Ee’s scheduled rest +30% premium pay of 100% regular wage
day) IRR, Book III, Rule III, Section 7)
Work performed on any Special Holiday 1st eight (8) hours + 30% premium pay of
100% regular wage (IRR, Book III, Rule III,
Section 7)
Rates of Work performed on a Special Holiday and
same day as the scheduled rest day
1st eight (8) hours + 50% premium pay of
100% regular wage

Compensation Excess of eight (8) hours + 30% of hourly

rate on said date (M.C. No. 10, Series of

for Rest Day, 2004)

Work performed on a Special Working Day Ee is only entitled to his basic rate. No

Sunday or premium pay required.

Reason: for work performed is considered

Holiday Work work on ordinary working days (IRR, Book III,

Rule III, Section 7)
Holiday Pay

One pay given by law to an employee even if he does not work on

a regular holiday.

The payment of the regular daily wage for any unworked regular
holiday.

It is a premium given to Ees pursuant to the law even if he has

not been suffered to work on a regular holiday. It is limited to
the 12 regular holidays, also called legal holidays listed by law.

The Ee should not have been absent without pay on the working
day proceeding the holiday.
Persons Entitled to
Holiday Pay
• General Rule: All Ees are entitled.
(Sec. 1, Rule IV, Book III, IRR)
XPNs:

Government Ees and any of Retail and service

Domestic helpers and Ee engaged on task or
its political subdivisions establishments regularly
persons in the personal contract basis or purely
including GOCCs (with employing less than 10
service of another; commission basis;
original charter); workers;

Ee paid fixed amount for

Field personnel and other
Members of the family of Managerial Ee and other performing work
Ee whose time and
the Er who are dependent members of the managerial irrespective of the time
performance are
upon him for support; staff; consumed in the
unsupervised by the Er; and
performance thereof.
Retail
establishments
• They are engaged in the sale
of goods to end users for
personal or household use.
(grocery store)
Service
Establishments
• They are engaged in the sale
of service to individuals for
their own or household use.
(TV repair shop)
Purpose of Holiday Pay
To secure the payment of undiminished
monthly monthly income undisturbed by any
work interruption. In other words, although
the worker is forced to take a rest, he earns
what he should earn, that is his holiday pay.
Aimed at benefitting daily-paid workers
whose income is circumscribed by the
principle of “no work no pay. Prior to the
enactment of the Labor Code, daily paid
workers were not paid for unworked regular
holidays.
The law on holiday pay is thus conceived to
be the countervailing measure to partially
offset the disadvantages inherent in the
daily compensation system of employment.
Legal Holiday

• It is a day designated or set apart by the legislature for a

purpose within the meaning of the term “holiday” to
commemorate an important event.
 GR: They are compensable whether worked
or unworked subject to certain conditions.
They are also called legal holidays.

XPNs: A legal holiday falling on a Sunday

creates no legal obligation for the employer
to pay extra, aside from the usual holiday
Regular pay, to its monthly-paid employees.
Holidays
Regular New Year’s Day January 1

Holidays Araw ng Kagitingan

Maundy Thursday
Monday nearest April 9
Movable Date
Good Friday Movable Date
Labor Day May 1
Independence Day June 12
National Heroes Day Last Monday of August
Eidl Fitr Movable Date
Eidl Adha Movable Date
Bonifacio Day November 30
Christmas Day December 25
Rizal Day December 30
NINOY AQUINO DAY AUGUST 21
Special
All Saints Day November 1
(Non-
Feast of Immaculate December 8
Working)
Conception of Mary (RA Holiday
10966)
Last Day of the Year December 31

Other holidays declared

by law or ordinance
Regular v. Regular Special
Holiday Holiday
Special If unworked: Compensable Not compensable
subject to certain
Holiday conditions

If worked: Compensable Rate Additional 30% of

is 200% of the premium pay of 100%
regular rate Regular Wage

Limited to the 12 Not exclusive; law or

holidays provided in ordinance may
the Labor Code provide for other
special holidays
I mporta nt condi ti on tha t s hould
be met i n order to a v a i l / recei v e
the s i ngle holi da y pa y

• The Ee should not have

been absent without
pay on the working day
immediately preceding
the regular holiday.
13 th Month Pay

It is a form of monetary benefit equivalent to the monthly basic compensation

received by an employee, computed pro-rata according to the number of
months within a year that the employee has rendered service to the employer.

Additional income based on wage required by PD 851 requiring all Ers to pay
their Ees a 13th month pay which is equivalent to 1/12 of the total basic salary
earned by an Ee within a calendar year.
Basic Salary

• Includes all remunerations or earnings paid by the employer to an

employee for services rendered including cost -of-living allowances.
• It does not include all allowances and monetary benefits which are
not considered or integrated as part of the regular or basic salary
such as:
1. Cash equivalent of unused vacation and sick leave credits;
2. pay;
3. Premium pay;
4. Night shift differential;
5. Holiday Pay;
6. Commissions.
Time of Payment of 13 th
month pay
• Under PD 851, all employers are
required to pay all their rank-and-file
employees a 13 th month pay not later
than Dec. 24 of every year.
Nature of 13 th
month pay Such is in the nature of additional
income granted to employees who
are not receiving the same.

It is based on wage but not part of

wage.
Minimum Period of
Service Required

• It is imposed as a
minimum service
requirement that the
employee should have
worked for at least one
(1) month during a
calendar year.
Equivalent forms of the 13 th month pay

1. Christmas bonus
2. Midyear bonus
3. Profit sharing scheme
4. Other cash bonuses amounting to not less than ½ of its basic
salary

Note: It must always be in the form of legal tender.

 Free rice

Electricity
Things not
proper Cash and stock dividends
substitutes
for 13 th Cost of living allowance.

month pay
Service Charges

• These are charges

collected by hotels,
restaurants and similar
establishments
distributed completely
and equally among the
covered workers except
managerial employees.
Covered
employees
• GR: All employees are
covered regardless of
their position,
designation, and
employment status,
irrespective of the method
by which their wages are
paid.
• XPN: Managerial Ees.
Frequency of
Distribution
• RA 11360 amended Art. 96 of the Labor
Code wherein the former provides that
all service charges collected by hotels,
restaurants and similar establishments
shall be distributed completely and
equally among the covered workers
except managerial employees.
• The period is not less than once every 2
weeks or twice a month at intervals not
exceeding 16 days. (RA 11360, IRR)
Service
Charge v.
Tips Service Charge Tips

Collected by the Voluntary payments made

management from by the customers to the
customers. Ees for excellent service.