Article 83.

NORMAL HOURS
OF WORK
I. NORMAL HOURS OF WORK
Employee shall not exceed 8 hours a day
Reason:
 Safeguard the health and welfare of
the laborer

 Minimize unemployment by utilizing

different shifts

Work Day vs. Calendar Day

WORK DAY CALENDAR DAY
24-hour period 24-hour period
commencing commencing at 12
from the time midnight and ending at
an employee 11:59PM
regularly starts
to work It is possible for an
employee to work for 2
calendar days

(e.g., if X’s work schedule

is from 10PM of Monday
up to 6Am of Tuesday, his
work day covers 2
calendar days)

PART-TIME
 Art. 83 does not prohibit to have less
than 8 hours a day

 Law prohibits exceeding 8 hours

General Rule in Part-Time:
 The wage and the benefits of a part-
timer are in proportion to the number
of hours worked

WORKING HOURS OF HEALTH

PERSONNEL
 Resident physician working 24 hours
a day violates the limitations
prescribe by Art 83.

It would not be permissible even if

the resident physicians were paid
additional compensation.

 8 hours a day
5 days a week, or
40 hours a week, exclusive of time
for meals

ART. 83 PROVIDES:
(1) Regular office hour of 8 hours a
day/5 days per week for health
personnel

(2) Where the exigencies (urgent

need) of service require that health
personnel work for 6 days or 48
hours then such health personnel
shall be entitled to an additional
compensation of at least 30% of
their regular wage

Republic Act No. 7305

  Health personnel in gov’t services are
excluded from coverage of Art. 82 to
96

 Their work hours, night shift

differential pay, and other
employment benefits are specified in
this statue

II. 12 HOUR SHIFT WITH OVERTIME

 Work shift may exceed 8 hours with

overtime pay (thru a contract)

 The 4-hour overtime pay becomes a

contractual commitment

Hence, boycott of the 4-hour

overtime becomes an illegal strike.

Working hours may be changed

 At the discretion of the company,
working hours may change as
necessary for its operations

 12-hour work shift is validated by

consent and its four-hour overtime
work with overtime pay becomes a
contractual commitment

III. COMPRESSED WORK WEEK

(CWW)

 An alternative agreement
  Normal workweek is reduced to less
than 6 days but the total number of
normal hours per week remains at
48 hours.

 Normal workday is increased to more

than 8 hours without corresponding
overtime premium

Applicability:
- Resort of the employer to prevent
serious losses due to causes beyond
his control

To be applicable:
- The workers must agree to the
temporary change of work schedule

- they shall not suffer any loss of

overtime pay, fringe benefits, or their
weekly or monthly take-home
premium

CONDITIONS OF A VALID CWW:

1. Expressly and voluntarily supported
by majority of the employees affected

2. If work is hazardous, a certification is

needed from an accredited safety
organization

3. DOLE is duly notified

EFFECTS OF CWW
 1. Work beyond 8 hours will not be
compensable by overtime
premium provided the total number
of hours worked per day shall not
exceed 12 hours

Exception:
Where there is a more favorable
practice existing in the firm

2. Employees under CWW are entitled to

meal periods of not less than 60
minutes (Art 85)

3. Adoption of the CWW shall in no case

result in diminution of existing
benefits

REVERSION TO 8-HOUR WORKDAY

 Reversion to the normal working hour
from a CWW arrangement, SHALL
NOT constitute a diminution of
benefits

 The reversion shall be considered a

legitimate exercise of management
prerogative

Provided that employer shall give the

employees prior notice within a
reasonable period of time

FLEXIBLE WORK ARRANGEMENT

 Flexible Work Arrangement (FWA) is
considered as a better alternative
 than the outright termination of the
services of employees or the closure
of the establishment

 The effectivity and implementation of

FWA shall be temporary

Flexible Work Schedule

- right granted to a solo parent
employee

- vary his/her arrival and departure

time without the core work hours as
defined by employer

FWAs includes:
1. Broken-time schedule
 Work schedule is not continuous,
but the number of work
hours/week is not reduced

2. Forced leave
 Employees are required to go on
leave for several days of weeks,
utilizing their leave credits

3. Flexi-holiday schedule
 Employees agree to avail
themselves of the holidays at
some other days

4. Reduction of workdays
 Normal workdays per week are
reduced but should not last for
more than 6 months
 5. Rotation of workers
 Employees are rotated or
alternatively provided work
within the workweek

6. Compressed Workweek

BROKEN HOURS
 Work does not always mean
continuous and uninterrupted 8 hours
of work

 May be broken hours but the total of

8 hours is accomplished

STAGGERED WORKING TIME

 Valid that may resorted to by
employers

 Individuals have different start and

finish times than other employees

 Refers to the existing 24/7 shifting

schedule and the flexible working
time schedule

ARTICLE 84. HOURS

WORKED
Hours Work Include:
 (1) All time during which employee is
required to be on duty or to be at a
prescribed workplace

(2) All time during which an employee

is suffered or permitted to work

(3) Rest periods of short duration

during working hours which shall
not be more than 20 minutes

Principles in Determining Hours

Worked:
1. All hours are hours worked which the
employee is required to give to his
employer

Regardless of WON such hours are

spent in productive labor or involve
physical or mental exertion

2. An employee need not leave the

premises of the workplace in order
that his rest period shall be counted,
it being enough that he stops
working, may rest completely and
may leave his workplace, to go
elsewhere whether within or outside
the premises of his workplace

3. If the work performed was necessary,

or it benefitted the employer,

or the employee could not abandon

his work at the end of his normal
 working hours because he had no
replacement, all time spent for such
work shall be considered as hours
worked if the work is with the
knowledge of his employer or
immediate supervisor.

RULES ON HOURS WORKED:

1. Waiting Time
Considering as hours worked if:

a. Waiting is an Integral part of his

work

b. The employee is Required or

engaged by the employer to wait

c. When employee is required to

remain on Call in the employer’s
premises

Or so close that he cannot use the

time effectively for his own purpose

COMPENSABILITY OF WAITING TIME

ENGAGE TO WAIT WAITING TO BE
(Employee is ENGAGED
required to wait) (Employee is not
required to wait)
Waiting is an integral Idle time is not
part of the job; working time;

Time spent waiting is It is not

compensable compensable
2. Sleeping Time
 Whether sleeping time is allowed
an employee will be considered
as part of his working time will
depend upon the express or
implied agreement of the
parties.

In the absence of an
agreement, it will depend upon
the nature of the service and its
relation to the working time.

a. Considered working time if

sleeping time is

i. Subject to serious
interruption or

ii. Takes place under

conditions substantially
less desirable than would
be likely to exist at the
employee’s home

b. Not considered as working

time: if there is an
opportunity for comparatively
uninterrupted sleep under
fairly desirable conditions

Note: Sleeping time is compensable

working time if the nature of employee’s
work allows sleeping without interrupting
or prejudicing the performance of his work.
3. Preliminary and Postliminary
Activities

a. Preliminary Activities – before

work (e.g. preparation for business
presentations)

b. Postliminary Activities – after

actual work (e.g. overtime work)

Compensable when:
a. Controlled or required by employer
and

b. Are pursued necessarily and

primarily for the employer’s benefit

Note: The 30-min assembly time practiced

by the employees of the company cannot
be considered “waiting time” since they
are not subject to the absolute control
of the company during this period

Otherwise, their failure to report in the

assembly time would justify the company
to impose disciplinary measures

4. Travel Time
Travel from Home to Work
  Normal travel from home to
work whish is not work time
General Rule:
 Not compensable because it is a
normal incident of employment

Exception:
 Worker is made to work on an
emergency call and travel is
necessary

a. Travel is done through a

conveyance provided by the
employer

b. Travel is done under the

supervision and control of the
employer

c. Travel is done under vexing

and dangerous circumstance

Travel that is All in A Day’s Work

 Time spent by an employee in
travel as part of his principal
activity

Like travel from jobsite to

jobsite during workday

 Compensable and must be

counted as hours worked
 Travel Away from Home
 Travel that keeps an employee
away from home overnight

 Considered as work time when it

cuts across an employee’s
workday

Because it substitutes for the

hours that the employee should
have been in the office

5. Power Interruptions

a. Brownouts of “short duration but not

exceeding 20 minutes shall be
treated as worked or compensable
hours

b. Brownouts running for more than 20

minutes may not be treated as
hours worked provided any of the
following conditions are present:

i. Employees can leave their

workplace or go elsewhere
whether inside or outside the
work

ii. Employees can use the time

effectively for their own interest

6. Semestral Break of Teachers

  Nature of work interruptions
beyond employees control

 Cannot be considered as
absences

 ”No work, no pay” does not

apply

 “no work” means employee

voluntarily absent themselves

 Teachers received their

regular salaries during this
period

7. Lectures, Meetings, and Training

Programs

Not counted as working time is ALL the

following conditions are met:

a. Attendance is outside of the

employee’s regular working hours

b. Attendance is in fact voluntary, and

c. Employee does NOT perform any

productive work during such
attendance
8. Attendance in Labor Relation
Activities
a. CBA Negotiations – not
compensable, except if there is an
agreement for compensability in the
parties Ground Rules

b. Grievance Meeting – generally,

compensable if employees are
required by employer to be on the
premises, except when a bona fide
union is involved and there is a CBA,
policy or practice to the contrary

c. Hearing, Arbitration, Conciliation

– time spent for attendance by union
officers or employees in hearings or
conferences before labor tribunals or
courts in cases or complaints initiated
or filed by them against their
employer is not compensable
working time

9. Work Hours of Seaman

 On board for more than 8 hours

a day is required by the nature
of their service.

 Criterion WON entitled to OT

Pay:
Whether they actually rendered
service in excess of said number
of hours

ARTICLE 85: MEAL PERIODS

Rules on Meal Periods
1. Should not be less than 60 minutes.

It is non-compesable

except where during the so-called

meal period, the laborers are required
to standby for emergency work,

or said meal hour is not one of

complete rest; such period is
overtime

2. May be less than 60 minutes, but

should not be less than 20 minutes
and

the shortened mealtime must be with

full pay, under the following
circumstances:

a. The work is non-manual work in

nature

b. Where the establishment regularly

operates not less than 16 hours a
day

c. There is urgent work to be

performed on machineries,
equipment or instillations to avoid
serious loss which the employer
would suffer
 d. Where the work is necessary to
prevent serious loss of perishable
goods

3. Rest periods or coffee breaks running

from 5-20 minutes shall be
considered as compensable working
time

Shortened Meal Break upon

Employees’ Request
 Employees may request their
meal period be shortened to
leave work earlier

Requisites:
a. Work is NOT physically
strenuous, and they are
provided with adequate coffee
breaks in the morning and
afternoon

b. Value of benefits is equal to

the compensation due to them

c. No Diminution in the salary

and other fringe benefits

d. Overtime pay will become due

and demandable if permitted
to work beyond 4:30pm
 e. The arrangement is of
temporary duration

f. Employees voluntarily agree in

writing and waive the
overtime pay

Note: The 8-hour work period

does not include the meal break.

Nowhere in the law may it be

inferred that employee must
take their meals within the
company.

Employees are not prohibited

from going out of the premises
as long as they return to their
posts on time.

Changing Lunch Break from Paid to

Unpaid
 It does not constitute unfair
labor practice

 Right to fix schedule of the

employee rests principally on
their employer
ARTICLE 86. NIGHT-
SHIFT DIFFERENTIAL
 Additional compensation of NOT
LESS THAN 10% of an
employee’s regular wage for
every hour of work done
between 10:00pm and 6:00am

Whether or not such period is

part of the worker’s regular shift

General Rule: ALL EMPLOYEES

ARE ENTITLED TO NSD

Exceptions:
1. Those provided in Art. 82 of
the Labor Code

2. Employees of retail and

service establishments
regularly employing NOT
more than 5 workers

Note: The COLA shall not be

included in the computation of
night shift pay

NSD in Overtime Work

 If work done between 10PM and
6AM is overtime work, then 10%
 night shift differential should be
based on the overtime rate

Reason:
NSD pay is given as a premium for
working at a time when the
employee is supposed to sleep and
rest in accordance with the law of
nature

NSD not Waivable

 Additional compensation for
nighttime work is founded on
public policy

NIGHT SHIFT DIFFERENTIAL

 Payment for work done during
the night (10:00pm-6:00am)

 10% of basic wage

OVERTIME PAY
 Payment for the excess of the
regular 8-hour work

 25% or 30% of basic wage

Note:
The receipt of overtime pay will not
preclude payment of night shift differential
pay

ARTICLE 87:
OVERTIME PAY
 Additional compensation for
work performed beyond 8 hours
within the worker’s 24-hour
workday regardless whether the
work covers 2 calendar days

Reason:
The employee is given OT pay
because he is made to work longer
than what is commensurate with
his agreed compensation for the
statutorily fixed or voluntarily
agreed hours of labor he is
supposed to do

Overtime Pay
 Work performed beyond 8 hours

 Every employee who is entitled

to premium pay is likewise
entitled to the benefit of
overtime pay

Premium Pay
  Work performed within 8 hours
on non-working days, such as
rest days, and regular and
special holidays.

Basis for computation of Overtime Pay

 Regular Basic Wage includes
cash wage only, without any
deduction on account of facilities
provided by the employer

Note: The Cost-of-Living Allowance

(COLA) shall not be included in the
computation of overtime pay

RATES:
1. Overtime Work on Regular Work
Day

Employee is paid for the overtime

work an additional compensation
equivalent to his regular wage plus at
least 25%

2. Overtime Work on Special Holiday

or Rest Day

Overtime work performed on a special

holiday or rest day not falling on a
regular holiday shall be paid an
additional compensation equivalent to
the rate of the first 8 hours on that
day plus at least 30%
Conditions to be entitled to Overtime
Pay:
1. Establishment to overtime pay must
first be established by sufficient proof

2. Said overtime work was actually

performed

FACTUAL AND LEGAL BASIS FOR

CLAIM
 General Rule: an express
instruction from the employer is
NOT REQUIRED.

It is sufficient that the

employee is permitted or
suffered to work

Exception: On rest days and

holidays, written authority after
office hours is required for
entitlement to compensation

Note: A verbal instruction to

render overtime work prevails
over a memorandum prohibiting
such work

Overtime Pay Integrated in the Basic

Salary (“Built in” Overtime Pay)
  Stipulation between employer
and employee that the latter’s
regular or basic salary already
includes the overtime pay is not
per se illegal

 This is also called composite or

package pay or all-inclusive
salary

Requisites for Validity:

1. Clear and Written agreement
knowingly and freely entered into by
employee

2. Mathematical result shows that

agreed legal wage rate and the OT
Pay, computed separately, are equal
to or higher than the separately, are
equal to or higher than the separate
amounts legally due

Note: where the period of normal

working hours per day was increased
to 12 hours, the employer remains
liable for whatever deficiency in the
amount for OT work in excess of the
first 8 hours after re-computation
shows such deficiency

Waiver of Overtime Pay

 General Rule:
 OT Pay cannot be waived
expressly or impliedly.

Any contrary stipulation is null

and void, as it intended to
benefit laborers and employees

Exceptions:
1. When the waiver is made in
consideration of benefits and
privileges which may be more than
what will accrue to them in overtime
pay

2. Compressed work week

Quitclaim in Relation to Overtime Pay

General Rule: A quitclaim whereby

laborers agree to forego their benefits due
from their employer is null and void in its
entirety since it runs counter with Art. 22
of the Civil Code which provides against
unjust enrichment and is contrary to public
policy

Exception: Petitioner’s education

background and employment stature
render it improbable that he was
pressured, intimidated or inveigled into
signing the subject quitclaim.
This Court cannot permit the petitioner to
relieve himself from the consequences of
his act, when his knowledge and
understanding thereof is expected

Note: Employees whose positions are

reclassified from rank-and-file to
supervisory lose OT Pay and other benefits
under Art. 82-96.

Promotion produces the same effect. But

the promotion and position reclassification
must be done in good faith.
The personnel movement should not be
intended to circumvent the law to deprive
employees of the benefits they used to
receive.

CHINESE OVERTIME AGAINST PUBLIC

POLICY
Chinese overtime is a system of OT
Payment in which salaried employee’s
regular rate is calculated by dividing his
salary by the total number of hours he
works.

Thus, the greater number of hours, the

lower rate of pay per hour, unduly
reducing the take home pay of the
employee. This is prohibited by law.
 ARTICLE 88.
UNDERTIME NOT
OFFSET BY OVERTIME
 Prohibited by law

 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

Reason:
 The undertime hours represent
only the employee’s hourly rate
of pay

Overtime hours reflect both

the employee’s hourly rate of
pay and the appropriate
overtime premium

Offsetting the undertime hours

against the overtime hours
would result in undue
deprivation of the employee’s
overtime premium

The proper method should be to

deduct the undertime from the
accrued leave, but pay the
employee the overtime pay to
which he is entitled.
 ARTICLE 89.
EMERGENCY OVERTIME
WORK

General Rule: Employees cannot be

compelled to render overtime work
against their will

Exceptions:
1. In times of War or any national or
local emergency declared by the
Congress or the Chief Executive

2. When it is necessary to avail of

favorable weather or environmental
conditions where performance or
quality of work is dependent

3. When work is necessary to preserve

perishable goods

4. When there is urgent work needed on

machines and equipment

5. To prevent loss or damage to life or

property due to emergencies and
force majeure

6. To prevent serious obstruction or

prejudice to the business
 Note: in the event that any of the
circumstances enumerated in the law
exists and the worker refuses to
perform emergency overtime work,

the employer may validly terminate his

employment on the ground of
insubordination or willful disobedience
by the employee of the lawful order of
his employer in connection with his work
provided

ARTICLE 90:
COMPUTATION OF
ADDITIONAL
COMPENSATION

Regular Wage shall include cash wage

only, without deduction on account of
facilities provided by the employer, for
purposes of computing OT and other
additional remunerations

Note: This provision should be clarified or

modified.

The “regular wage” includes the cash wage

plus value of facilities
Regular wage is bigger than cash wage.
The OT rate should be based on the
regular wage, not on the cash wage only.

ARTICLE 91. WEEKLY

REST PERIOD
Duration: Not less than 24 consecutive
hours after 6 consecutive normal work
days

Note: 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.

Who Determines Weekly Rest Days

The employer determines and schedules
the weekly rest period subject to the
following:

1. Collective Bargaining Agreement

 2. Rules and Regulations issued by
the Secretary of Labor

3. Employees preference based on

religious grounds

The employer shall respect the

preference of employees as to their
weekly rest day when such preference is
based on religious grounds.

Note: when such preference will

prejudice the business operations of the
employer and no other remedial
measures are available, the weekly rest
period may be schedule to meet the
employee’s choice for at least 2 days a
month.

ARTICLE 92. WHEN

EMPLOYER MAY
REQUIRE WORK ON
REST DAY

General Rule: Employer may not require

the employees to work on a rest day

Exceptions:
1. Urgent work to be performed on the
machinery, equipment, or instillation
2. Prevent loss or damage to perishable
goods

3. In case of Actual or impending

emergencies caused by force majeure
to prevent loss of life and property, or
imminent danger to public safety

4. Necessary to avail of favorable

weather or environmental conditions
where performance or quality of work
is dependent

5. Where the nature or the work

requires continuous operations and
the stoppage of work may result in
irreparable injury or loss to the
employer

6. In the event of abnormal pressure of

work due to special circumstances,
where the employer cannot ordinarily
be expected to resort to other
measures

7. Under other circumstances analogous

to the foregoing as determined by the
Secretary of Labor

Note: failure to work during an

employee’s rest day does not justify the
disciplinary sanction of outright
dismissal from employment
 When an employee volunteers to
work on his rest day under other
circumstances, he may be allowed to do
so, provided he expresses such desire
in writing and he is paid the
additional compensation for working
on his rest day

ARTICLE 93:
COMPENSATION FOR
REST DAY, SUNDAY, OR
HOLIDAY WORK
DAY PREMIUM PAY
Work on a 30% of regular
schedules rest day wage

No regular 30% of regular

workdays and no wage for work
specific rest days performed on
Sundays and
holidays

Work on Sundays 30% of regular

when it is his wage
established rest day

Work on special 30% of regular

holiday wage

Work on special 50% of regular wag

holiday falling on
scheduled rest day

Work on regular 260% of regular

holiday falling on wage
scheduled rest day

Note: employee shall be entitled to

additional compensation on Sunday only
when it is his established rest day

ARTICLE 94. RIGHT TO

HOLIDAY PAY

Holiday Pay refers to the payment of the

regular daily wage for any unworked
regular holiday

Note: In addition to the exceptions in Art.

82. Holiday Pay does not apply to
employees of retail and service
establishments regularly employing less
than 10 workers

Reason: prevent diminution of the

monthly income of the workers on account
of work forced to take a rest, he earns
what he should earn, that is his holiday
pay.
 LIST OF REGULAR
HOLIDAYS
E.O. 292 as amended by R.A. 9492
1. New Year’s Day – Jan 1

2. Maundy Thursday – movable date

3. Good Friday – movable date

4. Araw ng Kagitingan – Monday

nearest Apr. 9

5. Labor Day – Monday nearest May 1

6. Independence Day – Monday

nearest June 12

7. National Heroes Day – Last Monday

of August

8. Bonifacio Day – Monday nearest

November 20

9. Christmas Day – December 25

10. Rizal’s Day – Monday nearest

December 30
11. Eid’l Fitr – movable date

12. Eid’l Adha – movable date

SPECIAL (NON-
WORKING) HOLIDAYS
1. Chinese New Year – Feb 1

2. ESDA People Power – Feb 25

3. Black Saturday – April 16

4. National and Local Election – May

9

5. Ninoy Aquino Day – August 21

6. All Saints’ Day – Nov 1

7. Feast of the Immaculate

Conception Mary – Dec 8

SPECIAL (WORKING)
HOLIDAYS
1. All Souls’ Day – Nov 2

2. Christmas Eve – Dec 24

3. Last Day of the Year – Dec 31

Note: the date set for regular national
election is a holiday. Holiday pay should be
paid by employer.

Rule on Compensability
Employee is entitled to at least 100% of
his minimum wage rate even is he did not
report for work

He is present or is on leave of absence

with pay on the work day, immediately
preceding the holiday

Note: Legal Holiday falling on a Sunday

does not create additional workday nor
create a legal obligations for the employer
to pay extra

Work performed on that day merits at least

twice (200%) the daily wage of the
employee

Holiday Pay of Monthly Paid

Employees
The divisor assumes an important rule in
determining whether or not holiday pay is
already included in the monthly salary

Additional Compensation for Work on

a Rest Day, Sunday, or Holiday
 1. General Rule, the company with 6-
day working schedule, the divisor 314
days in a year already means that the
legal holidays are included in the
monthly pay of the employee

2. General Rule for a company with 5-

day working schedule, the divisor 261
means that the holiday pay is already
included in the monthly salary of the
employee

Rule on Holiday Pay of Teaching

Personnel Paid Per Lecture Hour
For faculty members paid by the hour
by virtue of their teaching contracts:
1. They are NOT entitled to payment of
holiday pay because they are paid
only for work actually done.

Since regular holidays are known to

both school and faculty members as
“no class day”, certainly, the latter do
not expect payment for said
unworked days, and this was clearly
in their minds when they entered into
the teaching contracts

2. They are, however, entitled to their

regular hourly rate on days declared
as special holidays or when classes
are called off or shortened on account
of typhoons, floods, rallies, and the
like because the faculty member,
although forced to take a rest, does
 not earn what he should earn on that
day.

Holiday Pay of Certain Employees

1. Where the covered employee is paid
on piece-rate basis, his/her holiday
pay shall not be less than his average
daily earnings for the last 7 actual
workdays preceding the regular
holiday, provided, that in no case
shall the holiday pay be less than the
applicable statutory minimum wage
rate

2. Seasonal workers may not be paid

the required holiday pay during off
season when they are not at work

3. Workers who do not have regular

working days, such as stevedores,
shall be entitled to this benefits

Regular Holiday
- Compensable even if unworked
subject to certain conditions

- Limited to the 12 enumerated by the

Labor Code

- Rate is 200% of the regular rate if

worked
Special Holiday
- No work, no pay

- Not exclusive since a law or ordinance

may provide for other special holidays

- Rate is 130% of the regular wage if

worked

DOUBLE HOLIDAY PAY (i.e. Araw ng

Kagitingan and Good Friday falls on the
same day)

1. 200% of the basic wage

a. Entitled even if said holiday is

unworked

b. To give employee only 100%

would reduce the number of
holidays

2. 300% if he worked on 2 regular

holidays falling on the same day.

390% if he reported for work on a

double holiday which is also his rest
day, where he is now entitled to an
additional 30% based on the rate of
300% for that day
SINGLE HOLIDAY RULE
Provided that the employee:

1. Worked
2. Was on leave with pay
3. Was on authorized absence on the
day prior to the regular holiday

Note: employees who are on leave of

absences without pay on the day
immediately preceding a regular holiday
may not be paid the required holiday pay if
they do not work on such regular holiday
Wed Thurs Fri Holiday
Pay
Present Rest Day Regular YES
Holiday
Absent Rest Day Regular YES
w/ Pay Holiday
Absent Rest Day Regular NO
w/o Pay Holiday
Present Special Regular YES
Day Holiday
Absent Special Regular YES
w/ Pay Day Holiday
Absent Special Regular NO
w/o Pay Day Holiday

Successive Regular Holidays

To be entitled to Holiday Pay in case of 2
successive holidays, the employee must:
1. Be present on the day immediately
preceding the first holiday

2. Be on leave with pay

Note: he must work on the 1st holiday
to be entitled to holiday pay on the 2nd
regular holiday

Wed Maundy Good Holiday

Thursday Friday Pay
Present Not Not Yes -
worked Worked Both
Absent Not Not Yes -
w/ Pay worked Worked Both
Absent Not Not No - Both
w/o worked Worked
pay
Absent Worked Not Yes – But
w/o Worked Only to
pay The
Holiday
Pay on
Friday

ARTICLE 95: RIGHT

TO SERVICE
INCENTIVE
Service Incentive Leave (SIL) is a 5-
day leave with pay for every employee
who has rendered at least 1 year of
service

Purpose: To serve as a motivation for

the employee to stay longer with the
employer
Note: Part-time workers are entitled to
SIL. The reason is that provisions of Art.
95 and its implementing rules speak of
the number of months in a year for
entitlement to said benefit.
Part-time employees are entitled to
the full five days SIL benefit and not on
a pro-rate basis

SIL does not apply to the following:

1. Employees of the government

2. Managerial employees as defined in

Book III

3. Field personnel whose performance is

unsupervised or those who are paid a
fixed amount for performing work
irrespective of the time consumed in
the performance

4. Those already enjoying vacation leave

with pay for at least 5 days

5. Those already enjoying the said

benefits

6. Those employed in establishments

regularly employing less than 10
employees

7. Persons in the personal service of

another
Note: Employees under a contract basis or
purely commission based are not
automatically exempted from the
grant of SIL unless classified as field
personnel

CONVERSION TO MONETARY
EQUIVALENT

General Rule: SIL is commutable or

convertible to cash is not used or
exhausted at the end of the year

Exception: Kasambahay Law, a

domestic worker who has rendered at least
1 year of service shall be entitled to an
annual service incentive leave of 5 days
with pay.
Unused leaves shall NOT be
convertible to cash.

Note: basis of conversion shall be the

salary rate at the date of commutation.
The availment and commutation of the
service incentive leave benefit may be on a
pro-rata basis

An employee, who is illegally dismissed,

is entitled to service incentive leave
benefits computed 1 year from the start of
her work until her actual reinstatement.

RULE ON PRESCRIPTION OF CLAIM

FOR SIL
Art 306 of the Labor Code is not a
prescription of a period of time for the
computation of money claims but is a
prescription of filing an action upon
monetary claims from the time the cause
of action accrued.

The employee may use his service

incentive leave benefits as leave days or
he may collect its monetary value. To limit
the award to 3 is to unduly restrict such
right

As to Piece-rate workers, they are

divided into two:

1. Piece-rate workers working inside

the premises of the employer and
thus are under the direct supervision
of the employer are entitled to SIL

2. Piece-rate workers working outside

the premises of the employer whose
hours spent in premises of the
employer whose hours spent in the
performance of their work cannot be
ascertained with reasonable
certainty and thus are not under the
 direct supervision of the employer are
not entitled to SIL

Piece-rate employees are not

entitled to service incentive leave
pay. SIL pay shall not apply to
employees whose performance is
unsupervised by the employer

EMPLOYEES WITH SALARIES ABOVE

MINIMUM WAGE

The difference between the minimum

wage and the actual salary received by
the employees cannot be deemed as
their 13th month pay and service
incentive leave pay as such difference is
not equivalent to or of the same import
as the said benefits contemplated by law

VACATION AND SICK LEAVE

VL AND SL are not statutorily
required. They are a:

1. Matter of management discretion

2. Product of collective bargaining

agreement
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.

Service Incentive Leave

- Mandatory legally required

- Intended to alleviate the economic

condition of the workers for it acts as
replacement for regular income that
would not be earned during such
instance

- Cannot be waived; commutable

Vacation/Sick Leave
- Voluntary grant results from
employer’s discretionary policy or
from the CBA

- Intended to afford the laborer a

chance to get a much needed rest to
replenish his worn out energies
and acquire new vitality to enable him
to efficiently perform his duties and
not merely to give him additional
salary

- Must be demanded in its opportune

time, otherwise, silence would equate
 to waiver, the same being a mere
concession or act of grace of
employer. Not commutable

ARTICLE 96. SERVICE

CHARGES

All service charges collected by hotels,

restaurants and similar establishments
shall be distributed as follows:

1. 85% for all covered employees (to

be equally distributed)

2. 15% for disposition by management

to answer for losses and
breakages and at the discretion of
discretion of the management,
distribution to managerial
employees

Coverage
 Apply only to hotels, restaurants
and similar establishments
collecting service charges

 All employees are covered

except managerial
employees
Frequency of Distribution
 Shares referred to herein shall
be distributed and paid to
employees not less than once
every 2 weeks or twice a
month at intervals not
exceeding 16 days

Rule in case of Abolition

 If service charge is abolished,
the share of the covered
employees shall be considered
integrated in their wages

 Basis of the amount to be

integrated shall be the average
share of each employee for the
past 12 months immediately
preceding the abolition or
withdrawal of such charges

POOLED TIPS:
 Establishment does not collect
service charges but has a
practice or policy of pooling tips
given voluntarily by its
customers.

Pooled tips should be monitored,

accounted for, and distributed
in the same manner as the
service charges
 NSD 10% hourly wage
rate
OT (normal 25%
working hours)

OT (holiday or 30%
rest day)

Regular Holiday 200%

Rest day or 130%

special holiday

Rest day and 150%

special holiday

Rest day and 260%

regular

Double holiday 300%

Double holiday 390%

and rest day
`