EMPLOYEE BENEFITS AND SERVICES (PHILIPPINES)

Objectives of Benefit Programs

To Improve Morale
To Meet Health and Safety Needs
To Attract Good Employees
To Reduce Turnover
To Maintain a Competitive Position
To Enhance the Organization's Image The main objective is to attract (recruit) and to retain employees.
Types of Benefits
Insurance benefits
Health benefits (and services)
Security benefits
Time-off benefits
Work scheduling benefits
Retirement benefits
Disability benefits

MANDATORY GOVERNMENT BENEFITS AND CONTRIBUTIONS

COVERED BY THE PHILIPPINE LABOR CODE

1. Social Security System (SSS) Contributions

Republic Act No. 8282 or otherwise known as the Social Security Act of 1997

The social security system is aimed at providing protection for the SSS member against socially recognized hazard
conditions such as sickness, disability, maternity, old age and death, or other such contingencies not stated but
resulted in loss of income or results to financial burden.

The employee and his/her employer(s) are to contribute for the social security benefits of the said employee in
accordance to a given schedule by the Philippine Social Security System.

2. Contribution to National Health Insurance Program (NHIP)

The employee and his/her employer(s) are to contribute to the medical insurance of the said employee in
accordance to the Republic Act 7835 on Medicare Program which is administered by the Philippine Health
Corporation (PhilHealth). Monthly employee contribution depends on the employee’s monthly salary. The monthly
schedule is provided by Philhealth

3. Contribution to Home Development and Mutual Fund (HDMF/Pag-IBIG)

Home Development Fund Law of 2009, employer(s) is required to contribute per month not less than 100.00₱ to
the employees Home Development and Mutual Fund. In accordance to the periodic remittance schedule provided
by HDMF, employers will remit this contribution, in addition to that of the employees, which is to be deducted from
his/her payroll.

 4. The 13th Month Pay

As mandated by the Presidential Decree No. 851, the employee shall receive a bonus salary equivalent to one (1)
month, regardless the nature of his/her employment, not later December 24 of every year.

5. Service Incentive Leave

Book III, Chapter III of the Labor Code of the Philippines covers the employee benefits for Incentive Leaves.
According to Article 95, an employee who has rendered atleast one year of service is entitled to a yearly five days
service incentive leave with pay.

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6. Meal and Rest periods

Under Article 83, the employee is provided one-hour employee benefit for regular meals, when working on an eight-
hour (8-hours) stretch. Employees are also provided adequate rest periods in the morning and afternoon which shall
be counted as hours worked.

All these provisions apply in addition to every new employee benefits furnished that are in excess of what is
stipulated by the Philippine Labor Code.

COMPENSABILITY OF ILLNESS OR INJURY

UNDER EMPLOYEE’S COMPENSATION PROGRAM (ECP)

Employee’s Compensation Program (ECP) - is a government program designed to provide a compensation

package to public and private employees or their dependents in the event of work-related
sickness, injury, or death.

1. Occupational Diseases - For an occupational disease and the resulting disability or death to be compensable,
all of the following conditions must be satisfied:

The employee’s work and/or the working conditions must involve risk/s that caused the development of the
illness;
The disease was contracted as a result of the employee’s exposure to described risks;
The disease was contracted within a period of exposure and under such factors necessary to contract it; and
There was no deliberate act on the part of the employee to disregard the safety measures or ignore
established warning or precaution.

2. Work-related Injuries - For the injury and the resulting disability or death to be compensable, the injury must be
the result of an accident arising out of and in the course of employment.

Injuries resulting from an accident which happened at the workplace.

Injuries resulting from an accident which happened while the employee is performing his official function.
Injuries resulting from an accident which happened while going to or coming from the place of work.
Injuries resulting from an accident which happened while ministering to personal comfort
Injuries resulting from an accident while the employee is inside the company shuttle bus
Injuries resulting from an accident which occurred during a company-sponsored activity.
Death of an Employee Due to Assault

PHILIPPINES BENEFIT SUMMARY

UNDER THE PHILIPPINE LABOR CODE (PRESIDENTIAL DECREE NO. 442)
TERMS AND CONDITIONS OF EMPLOYMENT

1. Minimum Wage
The Wage Rationalization Act, Republic Act No. 6727, sets the minimum wage rates applicable per region, province
and industry sector.

Workers that render services for a total of 40 hours per week (8 hours per day, 5 days per week) are entitled to
receive at least the daily minimum wage.

National Capital Region - the minimum gross basic wage is ₱512.00 per day (as of October 2017).

2. Night Shift Differential

This refers to additional compensation of at least 10 percent of an employee’s applicable wage rate, payable to
employees (except exempt employees) who perform work between 10 p.m. to 6 a.m. of the following day.

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3. Overtime pay
The normal working hours is 8 hours per day.

An employee who renders work in excess of eight hours a day is entitled to overtime pay equivalent to the
applicable wage rate plus at least 25 percent thereof. The overtime rate will vary if the overtime work is rendered on
a rest day, regular holiday or special day.

Under Rest day: regular/special holiday – plus 30% of the regular daily salary.

“Exempt employees” are not entitled to such overtime pay.

4. Rest Days

Employees, except exempt employees, are entitled to a rest period without pay of not less than 24 consecutive
hours for every six consecutive normal working days (i.e. Sunday).

Work done on rest days = plus 30% of the regular daily compensation

5. Holidays

Unworked regular holiday (except exempt employees) = regular daily wage

Work on regular holiday = 200% or Double pay
Work on Special Holiday = regular daily pay + 30%
Rest day + Work on Special holiday = regular daily pay + 50%

6. LEAVES

Maternity Leave 60 days leave in case of normal delivery, abortion or miscarriage

78 days for caesarean delivery maternity benefit = 100% of her average salary credit

Paternity Leave
Paternity leave benefit is granted to all married male employees first 4 deliveries of lawful wife
7 days leave = full pay (consisting of his basic salary) 

Solo-parent Leave
Solo Parents Welfare, Republic Act No. 8972
Employee must have been working for atleast 1 year
7 working days of leave in a year (with pay)

Leave due to Domestic Violence

Leave for women and their children who are victims of violence
paid leave for up to 10 days (extendible when the necessity arises as specified in the protection order)

Leave due to Gynecological Disorders

Women employees who have rendered continuous aggregate employment service of at least six
months for the last 12 months are entitled to the special leave benefit of up to two months with full
pay following surgery caused by gynecological disorders.

7. 13th Month pay (Presidential Decree No. 851)

all “rank and file” employees

13th month pay = 1/12 (or 1 month) of the total basic salary
Regardless the nature of his/her employment, he/she will be paid not later December 24 of every
year.

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8. Retirement Benefits

Section 1. Article 287 of Presidential Decree No. 442

60 years of age (but not beyond 65) and served for at least 5 years
Benefits = 15 days salary + service incentive leave (cash equivalent) + 13th month pay

9. Separation Pay

Basis of separation pay:

1. Introduction of labor-saving devices

2. Redundancy
3. Retrenchment
4. Closure or Cessation of business
5. Disease the employee found to be suffering and whose continued employment is prohibited by law or is
prejudicial to his health as well as the health of his co- employees.

10. 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.

 11. DISABILITY BENEFITS

 Temporary Total Disability ( TTD )
income benefit = 90% of his average daily salary

coverage = continuous benefit pay must not exceed 129 working days

 Permanent Total Disability ( PTD )

income benefit = equivalent to his monthly income benefit + 10% for each dependent child (not
exceeding 5 dependents).

guaranteed monthly benefit = five years

12. Mid-year Bonus (14th month pay)  

Shall apply to all personnel occupying regular, or contractual positions, rendering full- time basis,
covered by the Compensation and Position Classification System (CPCS) under RA No. 6758, as
amended by Congress Joint Resolution No.1, Series of 1994, and No.4, Series of 2009.

Equivalent to 1 month basic pay = given not earlier than May 15 (of current year)

EMPLOYEE SERVICES

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 Employee services can include anything an employer deems necessary to provide as a perk for employees.
No real limit exists as to what can be included as an employee service.  Common Types of Employee
Services

COMMON TYPES OF EMPLOYEE SERVICES

Flexible Work Schedules

These programs are arranged to meet an organization's goals while assisting employees with their personal
lives.

Example:

Because of technological advances, some employers allow employees to work from home one or
several days per week.

This gives employees some flexibility to maintain a balanced personal life and continue to successfully
complete their work responsibilities.

Wellness Program

In 2008, the Harvard School of Public Health noted a national study by Harris Interactive showing that 91%
of employers "believed they could reduce their health care costs by influencing employees to adopt healthier
lifestyles.“
Many employers offer wellness programs to improve employees' health. These programs can be applied in
a variety of ways, including reimbursable gym membership costs, on-site fitness facilities, and events to
promote healthy living and eating.

Child Care Services

Working parents having access to a work-site child care center positively affects their ability to successfully
concentrate on the job and be productive.

Product/Service Discounts

Most individuals clip coupons and shop for sales to save money. Some employers work with local and
national retail product and service providers to offer employees discounts for their personal needs.

These types of programs can include everything from discounts on groceries to purchasing a vehicle at a
lower cost. Free or discounted on-site food and drink services such as lunch, snacks and coffee can also
assist employees by saving them time and money.

These types of services are often appreciated by employees and can be implemented at little or no cost.