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The Labor Code of the

Philippines
Date: December 11, 2023
Prepared By: Maricar Q. Alvior (CB Department)
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The Labor Code of the Philippines is a legal code that

determines all employment practices and labor relations in the

Philippines. This is to help protect employees and employers- while

ensuring that neither is subject to unfair treatment or exploitation.

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Below are sets of rules that make up the Labor Code:

Working Hours in the Philippines

No employee in the Philippines must work for over 8 hours a day. He is

worthy of a 1-hour lunch break daily, without fail. However, a worker is only required to
work for a maximum of 8 hours per day from the office.

There are no laws that mandate his working hours from home.

Working hours include the time during which the employer is required to be
at the workplace, all hours that he is asked to work, and the breaks in between to avoid
burnout.
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Employees Exempt from Completing Working Hours

Article 82 of the Labor Code states that employees under all establishments and
undertakings need to complete a certain set of working hours, except:
• Government employees
• Managerial employees
• Field personnel
• Family members of the employer who are dependent for support
• Domestic help
• Individuals who provide personal service to others
• Workers given wages/salary based on the Secretary of Labor regulations
• Meal Times
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The Labor Code dictates that all employers must get no less than a 60-minutes break to
finish their meals. The usual time during day-shifts is 12.00 PM.

Night Shift
In case an employer requires a worker to work during the night- any time
between 10:00 PM and 6:00 AM- he must be paid a minimum of 10% over and above his
regular wage for each hour.
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Rules for Overtime Work

• Since the maximum work hours allowed in the Philippines are 8-hours, in case an
employee works for longer, he must be paid extra. This includes additional
compensation of 25% of his regular work wage.
• The employer is liable to pay an additional compensation equivalent to the average 8-
hour pay, including 30% more if he has asked his employee to work beyond 8-hours on
a holiday or rest day. Working on a rest day may be required in case of an emergency,
urgent work, loss to the business, or as determined by the Secretary of Labor and
Equipment.
• It is essential to note that an employee can be asked to perform overtime work in
national or local emergency cases determined by the state, or if the business is at stake .
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Rules for Under-time Work

• According to the Article 88 of the Labor Code, under-time work on a business day will not influence overtime
work on any given day. This means that if employee leaves work early, he cannot be made to work overtime the
next day to make up for those hours. This is because the rate of overtime per hour is higher than the missed
hours.
• The Labor Code also states that in case an employee receives permission to take leave on a specific day, his
employer is still required to pay for any additional compensation or overtime work done previously or in the
future.
Leaves
• All employers are subject to a weekly rest day of a full 24-hours after every 6 consecutive working days. The
specific rest day can be mutually decided. However, an employee can argue his case if he prefers to be given a
rest day based on a religious event or holiday.
• All workers reserve the right of holiday pay. This will include his regular daily wage. In case they are called into
work on a holiday, they must be paid twice their regular rate.
• If an employee has worked for a minimum of one year for his company, he must be offered a yearly service
incentive leave of five days with regular pay.
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In summary, the Labor Code of the Philippines ensures that no worker is

abused while giving authority to employers to assign overtime work or work on holidays as
long as they pay the wages stated by the law. To learn more about labor and compliance in
the Philippines.
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New minimum wage rates in

Central Visayas, Calabarzon to
take effect
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• EMPLOYERS should take note that the newly approved minimum wage rates in certain sectors and
industries under region 4-A (Calabarzon) and Region 7 (Central Visayas) will take effect on Sept. 24
and Oct. 1, 2023, respectively.
• Wage Order 4A-20, issued on Sept. 1 by the Regional Tripartite Wages and Productivity Board
(RTWPB) in Region 4-A, provides a wage increase ranging from P35 to P50.
• The new minimum wage rates in the region will now range from P385 to P520 in the non-agriculture
sector, P385 to P479 in the agriculture sector, and P385 for retail and service establishments employing
not more than 10 workers.
• Workers in the agriculture sector in the cities of Calaca and Carmona will, however, receive an increase
of P89 due to their reclassification from first-class municipalities to component cities.
• Wage Order 4A-20 was submitted last Sept. 4 to the National Wages and Productivity Commission
(NWPC), which affirmed the decision on Sept. 5. The wage order published on Sept. 8 will take effect
after 15 days from its publication, or on Sept. 24, 2023.
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• The new rates translate to a nine percent to 11 percent increase from the prevailing daily minimum wage
rates in the region and result in a comparable 23 percent increase in wage-related benefits covering 13th-
month pay, service incentive leave (SIL), and social security benefits such as Social Security System,
PhilHealth and Pag-Ibig, said the NWPC.
• Meanwhile, Wage Order RO7-24 was issued by the regional wage board in Central Visayas on Sept. 5,
2023. It provides an increase of P33, bringing the daily minimum wages in Class A to C areas to a range
of P420 to P468 for non-agriculture establishments, and P415 to P458 for agriculture and non-agriculture
establishments with less than 10 workers.
• The wage order was affirmed by the NWPC on Sept. 12. It was published on Sept. 15 and shall take
effect after 15 days or on Oct. 1.
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• Under the NWPC Omnibus Rules on Minimum Wage Determination, retail/service establishments regularly
employing not more than 10 workers and enterprises affected by natural calamities and/or human-induced
disasters may apply to the Regional Tripartite Wages and Productivity Board (RTWPB) for exemption from the
wage increase.
• Barangay micro business enterprises are not covered by the minimum wage law pursuant to Republic Act 9178 of
2002.
• The new rates translate to a 7.6 percent to 8.6 percent increase from the prevailing daily minimum wage rates in
the region and result in a comparable 23 percent increase in wage-related benefits covering 13th-month pay, SIL,
and social security benefits such as SSS, PhilHealth and Pag-Ibig.
• In June this year, minimum wage earners in Metro Manila were granted a P40 daily wage adjustment through
Wage Order NCR-24. The order took effect on July 16.
• The RTWPB-NCR’s decision raised the daily minimum wage in Metro Manila from P570 to P610 for non-
agriculture workers.
• Employees in the agriculture sector, service and retail establishments with 15 or less workers and manufacturing
establishments regularly employing less than 10 workers are now earning P573, up from P533.
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Internal Rate of Return (IRR)

What is the Internal Rate of Return (IRR)?

• The Internal Rate of Return (IRR) is the discount rate that makes the net present value (NPV) of a project
zero. In other words, it is the expected compound annual rate of return that will be earned on a project or
investment.
• When calculating IRR, expected cash flows for a project or investment are given and the NPV equals
zero. Put another way, the initial cash investment for the beginning period will be equal to the present
value of the future cash flows of that investment. (Cost paid = present value of future cash flows, and
hence, the net present value = 0).
• Once the internal rate of return is determined, it is typically compared to a company’s hurdle rate or cost
of capital. If the IRR is greater than or equal to the cost of capital, the company would accept the project
as a good investment. (That is, of course, assuming this is the sole basis for the decision.
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Implementing Rules and Regulations (IRR) of the Philippine Competition Act

The Implementing Rules and Regulations (IRR) shall cover all the mandated
functions and duties of the Philippine Competition Commission to facilitate the
implementation of the provisions of Republic Act 10667, otherwise known as the
Philippine Competition Act.

The IRR shall take effect fifteen (15) days after the date of its posting on 3 June 2016.