REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS (Lecture)

LABOR STANDARDS
BS ACCOUNTANCY I JUSI I DR. TALLION I SEM 1 I MIDTEMS I 2022

“Labor standards law” is that part of labor law which  Premium pay refers to the additional
prescribes the minimum terms and conditions of compensation required by law for work
employment which the employer is required to grant to performed within eight (8) hours on non-
its employees working days, such as rest days and regular and
special holidays
LABOR STANDARDS  Special day/special non-working holidays
1. Basic pay  Regular holiday
2. Overtime premium  Rest day – at least 24 continuous hours
3. Night shift differential
4. Holiday premium PREMIUM PAY
5. 13th month pay • Basic Rate X Premium Rate X Number of
6. Leaves Hours
7. Service incentive leave • Premium Rates:
8. Maternity leave ➢ Special day = 1.3 or plus 30%
9. Paternity leave ➢ Rest day = 1.3 or plus 30%
10. Parental leave for solo parent ➢ Rest day and Special day = 1.5 or plus
50%
Who are covered by the labor standards provisions of ➢ Regular Holiday = 2 or plus 100%
the Labor Code? ➢ Regular Holiday and Rest Day = 2.6 or
Employees in all establishments, whether operated for plus 160%
profit or not, are covered by the law on labor ➢ Double holiday = 3 or plus 200%
standards. ➢ Double Holiday and Rest Day = 3.9 or
plus 290%
Who are excluded?
GoMaFiFaDOR EXAMPLE:
 Government Employees How much basic pay will A receive if he
 Managerial Employees worked on the following days?
 Non-agricultural Field Personnel • Rate per hour = P10 Daily Rate = P800
 Members of the Family of the Employer 1. Special day
 Domestic Workers or Kasambahay and Persons 2. Rest day
in the Personal Service of Another 3. SD and RD
 Other Officers or Members of the Managerial 4, RH
Staff 5. RH and RD
 Workers paid by Results
OVERTIME PAY RATES
1BASIC PAY • Basic/Premuim pay x OT rate x Number of
Basic pay is the initial salary paid to an employee, not Hours
including benefits, bonuses, or raises. It is the rate of • OT Rates:
compensation an employee receives in exchange for ➢ Normal day = 1.25
services. An employee's base pay can be expressed as ➢ Special day = 1.3 or plus 30%
an hourly rate or as a weekly, monthly, or annual salary. ➢ Rest day = 1.3 or plus 30%
✓ Normal Working Hours – 8 hours a day, 40 ➢ Rest day and Regular Holiday = 1.3
hours a week. or plus 30%
✓ Meal Break – 1 hour; 20 mins. ➢ Regular Holiday = 1.3 or plus 30%
✓ Waiting Time – integral part of his work = ➢ Regular Holiday and Rest day = 1.3
benefit of the employer or plus 30%

2OVERTIME PAY EXAMPLE:

 “Overtime pay“ means the additional How much OT pay will A receive if he
compensation for work performed beyond worked on the following days?
eight (8)hours. • Rate per hour = P100 Daily Rate = P800

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 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS (Lecture)
LABOR STANDARDS
BS ACCOUNTANCY I JUSI I DR. TALLION I SEM 1 I MIDTEMS I 2022

1. Special day VACATION AND SICK LEAVE

2. Rest day • 1 day vacation leave and 1-day sick leave for
3. SD and RD every 24 days of actual service or a total of 15
4, RH days vacation leave and 15 days sick leave
5. RH and RD annually with full pay.
• Cumulative and any part thereof which may
3NIGHT SHIFT DIFFERENTIAL not be taken within the calendar year may be
• Night shift differential refers to the additional carried over to the succeeding years.
compensation for work performed from 10:00 • If you have accumulated at least 15 days
O’clock in the evening to 6:00 O’clock in the vacation leave credits, you may be allowed to
morning. monetize a minimum of 10 days, subject to
• NSD = 1.1 or plus 10% the availability of funds. Monetization of 50%
or more of vacation/sick leave credits may be
ACTIVITY allowed for valid and justifiable reasons.
How much OT pay, NSD pay, and total pay will A receive
if he worked on the following days? 10am to 7pm SIL
normal hours. Worked until 11pm.  Every covered employee who has rendered at
 Rate per hour = P100 Daily Rate = P800 least one (1) year of service is entitled to a
1. Special day yearly service incentive leave of five (5) days
2. Rest day with pay.
3. SD and RD  at least one year of service – 12 months,
4, RH continuous or broken.
5. RH and RD  Additional exclusions: 1. Those who are
6. Normal day already enjoying the benefit provided in the
TH
law; 2. Those enjoying vacation leave with
513 MONTH PAY
th
pay of at least five (5) days; 3. Those
The amount of 13 month pay shall at least be 1/12 of
employed in establishments regularly
the total basic salary earned for the year which shall
employing less than ten (10) employees
include all earnings paid by his/her employer for
 Commutable
services rendered but does not include allowances and
other monetary benefits such as the cash equivalent of
8MATERNITY LEAVE
unused vacation and sick leave credits, overtime,
• Maternity leave is the period of time which
premium, night shift differential, holiday pay and COLA. may be availed of by a woman employee,
• Only rank-and-file employees, regardless of married or unmarried, to undergo and
their designation or employment status and recuperate from live childbirth, miscarriage
irrespective of the method by which their and emergency termination during which she
wages are paid, are entitled to the 13th month is permitted to retain her rights and benefits
pay benefit. flowing from her employment.
• Employee must have worked for at least one • Period
(1) month during a calendar year, ➢ 105 days with pay – live birth , option
to extend additional 30 days without
6LEAVES
pay; additional 15 days if a qualified
1. Vacation Leave
solo parent;
2. Sick Leave ➢ 60 days - miscarriage and emergency
3. Service incentive leave
termination
4. Maternity leave
• Maximum of 2 consecutive contingencies, 1
5. Paternity leave
benefit per mother.
6. Parental leave for solo parent
• To be eligible:
➢ Must have at least 3 monthly
contributions in the twelve-month

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 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS (Lecture)
LABOR STANDARDS
BS ACCOUNTANCY I JUSI I DR. TALLION I SEM 1 I MIDTEMS I 2022

period immediately preceding the 7. Parent left solo or alone with the responsibility
semester of the contingency of parenthood due to abandonment of spouse
➢ Notify employer of the pregnancy for at least one (1) year;
and probable date of childbirth. 8. Unmarried mother/father who has preferred
to keep and rear her/his child/children instead
9PATERNITY LEAVE of having others care for them or give them up
• “Paternity leave” covers a married male to a welfare institution;
employee allowing him not to report for work 9. Any other person who solely provides parental
for seven(7) calendar days but continues to care and support to a child or children;
earn the compensation therefor, on the 10. Any family member who assumes the
condition that his spouse has delivered a child responsibility of head of family as a result of
or suffered miscarriage for purposes of the death, abandonment, disappearance or
enabling him to effectively lend support to his prolonged absence of the parents or solo
wife in her period of recovery and/or in the parent.
nursing of the newly-born child.
• First four deliveries only
• Not convertible

10PARENTAL LEAVE
• “Parental leave” is the leave benefit granted to
a male or female solo parent to enable him/her
to perform parental duties and responsibilities
where physical presence is required
• Not more than 7 working days
• At least 1 year of service

WHO IS A SOLO PARENT?

1. A woman who gives birth as a result of rape
and other crimes against chastity even without
a final conviction of the offender: Provided,
That the mother keeps and raises the child;
2. Parent left solo or alone with the responsibility
of parenthood due to death of spouse;
3. Parent left solo or alone with the responsibility
of parenthood while the spouse is detained or
is serving sentence for a criminal conviction for
at least one (1) year;
4. Parent left solo or alone with the responsibility
of parenthood due to physical and/or mental
incapacity of spouse as certified by a public
medical practitioner;
5. Parent left solo or alone with the responsibility
of parenthood due to legal separation or de
facto separation from spouse for at least one
(1) year, as long as he/she is entrusted with the
custody of the children;
6. Parent left solo or alone with the responsibility
of parenthood due to declaration of nullity or
annulment of marriage as decreed by a court
or by a church as long as he/she is entrusted
with the custody of the children;

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