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Coverage of Labor Standard and 13 Month Pay

Coverage of Labor Standard 13th Month Pay

Retail and service

Government Field Government
establishments
regularly employing
less than 10 workers
G F G
Employee Employee Employee

Managerial Workers Managerial

Employees Paid by Employees
Result
M W M
Other Offices or Persons in the Employee being
Members of a personal paid equivalent
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Managerial service of of 13 month
Staff another pay

O P E
Members of the Domestic Supervisory
Family of the
Employer who are Helpers Employee
dependent of him
for support

M D S

Not more than Less than 10 Receiving an Exempted by

5 employees employees equivalent of 5 paid Law
leave day or more

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Coverage of Labor Standard and 13 Month Pay

LABOR STANDARDS respect the preference of employees as to their weekly

Refers to the minimum requirements prescribed by existing rest day when such preference is based on religion
laws, rules and regulations and other issuances relating grounds.
wages, hours of work, cost of living allowances and other Where however the choice of the employees as to
monetary and welfare benefits, including those set by their rest day based on religious grounds will
occupational safety and health standards. inevitably result in serious prejudice or obstruction to
the operation of the undertaking, the employer may so
1. 8 Hour Work (shall not exceed) schedule the weekday rest day of their choice at least
Hours worked shall include: 2 days in a month. (Sec. 4, Rule III, Book III, IRR’s)
1. All time during which an employee is required
 to be on duty When ER may require Work on rest day [D U A - P N A]
 to be at a prescribed workplace and (Art. 92)
2. All time during which an employee is suffered or a. In case of actual or impending emergency caused by
permitted to work. serious accident, fire, flood, typhoon, earthquake,
epidemic, or other Disaster or calamity to prevent loss of
Rest periods of short duration during working hours life, or imminent danger to public safety.
shall be counted as hours worked.
b. In case of Urgent work, to avoid serious loss which the
2. Meal Pay ER would otherwise suffer;
c. In the event of Abnormal pressure of work due to
3. Holiday Pay special circumstances, where the ER cannot ordinarily
Except: Retail and service establishments regularly be expected to resort to other measures;
employing less than 10 workers
d. To prevent or damage to Perishable goods;
Includes: Employee who is paid by results and she works in
a service establishment employing more than 10 e. Where the Nature of work requires continuous
persons shall be paid holiday pay. (Sec. 8(b), operations and stoppage of the work may result in
Rule IV, Book III, IRR‟s) irreparable injury or loss to the ER; and
f. Analogous (avail of favorable weather) or similar
Regular Holidays circumstances
1. New Years day - January 1
2. Maundy Thursday - Movable Date How much is a worker entitled if he works on a rest day?
3. Good Friday - Movable Date Scheduled rest day – additional compensation of at
4. Eidul Fitr - Movable Date least 30% of his regular wage.
5. Araw ng Kagitingan - Movable Date nearest April 9
6. Labor day - Monday nearest May 1 Scheduled rest day which is a non-working holiday –
7. Independence day - Monday nearest June 12 entitled to additional compensation of at least 50% of his
8. National heroes day - Last Monday of August regular wage.
9. Bonifacio day - Monday nearest November 30
10. Christmas day - December 25 Scheduled rest day which is a regular holiday – entitled
11. Rizal day - Monday nearest December 30 to additional compensation of at least 30% of his regular
holiday rate of 200% based on his regular wage rate.
Nationwide Special Holidays (Sec. 4, Rule III, Book I, IRR‟s)
1. All Saints Day - November 1
2. Last Day of the Year - December 31 6. Service Incentive Leave
3. Ninoy Aquino Day - Monday nearest August 21 Except :
a. Those enjoying vacation leave with pay of at least 5
If required to work on reg. holidays = regular rate x days.
b. Those employed in establishments regularly employing
To receive holiday pay, the EE should not have been less than 10 workers
absent without pay on the working day preceding the c. Exempt establishments.
regular holiday. (Azucena)
can be converted to cash
A legal holiday falling on a Sunday creates no legal
obligation for the ER to pay extra to the EE who does not 5 days incentive leaves with pay for at least 1 year of
work on that day, aside from the usual holiday pay, to its service.
monthly-paid employee. (Wellington vs. Trajano) The term „at least 1 year of service‟ shall mean service
within 12 months, whether continuous or broken,
4. Premium Pay reckoned from the date the EE started working,
Is additional compensation for work rendered by the including authorized absences and paid regular holidays
employee on days normally he should not be working. unless the working days in the establishment as a
matter of practice or policy, or that provided in the
5. Weekly Rest Period employment contract are less than 12 months, in which
It shall be for the duty of every employer, whether case said period shall be considered as 1 year. (Sec. 3,
operating for profit or not, to provide employee a rest Rule V, Book III, IRR’s)
period of not less than 24 consecutive hours after every 6 7. Night Shift Deferential
consecutive normal working days. Every EE shall be paid night shift differential of not less
The employer shall determine and schedule the weekly than 10% of his regular wage for each hour of work
rest day of his employees, however, the employer shall performed between 10:00 p.m. and 6:00 a.m. (Art. 86)

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Coverage of Labor Standard and 13 Month Pay

Except: Employer with not more than 5 employees b. Customarily or regularly direct the work of 2 or more
employees therein;
8. Overtime Pay c. Has the authority to hire or fire other employees of lower
Is additional compensation for work done beyond the rank; or their suggestions and recommendations as to
normal work hours on ordinary working days. the hiring and firing and as to the promotion or any
change of status of other employees are given particular
Regular work day – plus 25% basic hourly rate weight. [Sec 2(b), Rule I, Book III]

Special days, holiday or rest day – plus 30% of the O – Other Offices or Members of a Managerial Staff
regular hourly rate on said days. a. Primary duty consists of the performance of work
directly related to management policies of the employer;
Emergency Overtime Work - Any EE may be required by
the ER to perform overtime work in any of the following b. Customarily and regularly, exercise discretion and
cases: [WED-UPS] independent judgment;
a. When the country is at War
c. Regularly directly assist a proprietor or managerial
employee or execute under general supervision work
b. When any other national or local Emergency has been
along specialized or technical lines requiring special
declared
training, experience or knowledge; or execute under
general supervision special assignment and tasks; and
d. When it is necessary to prevent loss of life or property or
in case of imminent Danger to the public safety due to d. Do not devote more than 20% of their hours worked to
an actual or impending emergency in the locality caused activities which are not directly and closely related to the
by serious accidents, fire, flood, typhoon, earthquake, performance of the work described in the preceding
epidemic or other Disaster or calamity. paragraphs.

e. When there is Urgent work to be performed on M – Members of the Family of the Employer who are
machines and installations in order to avoid serious loss dependent of him for support
or damage to the ER or some other cause of similar It refers not only to the real “immediate” members of he
nature. family of the employer but also to those who are
considered as family members in its loose sense, that is,
f. When the work is necessary to prevent loss or damage those who are living with the employer and dependent on
to Perishable goods. him for support

g. Where the completion or continuation of the work G – Government Employee

started before the 8th hour is necessary to prevent Whether employed by the National Government or any of
Serious obstruction or prejudice to the business its political subdivisions, including those employed in
operations of the ER. GOCC‟s with original charters. (Sec. 2, Rule I, Book III,
IRR‟s)
The EE‟s refusal to obey the order of the EE constitutes
insubordination for which he may be subjected to F – Field Employee
disciplinary action. (Alcantara) Non-agricultural EE‟s who regularly perform their duties
away from the principal place of business or branch office
Undertime work in any particular day shall not be offset of the ER whose actual hours of work in the field cannot
by overtime work on another day BUT not on someday. be determined with reasonable certainty (Art. 82)
 Permission given to the EE to go on leave on some
other day of the week shall not exempt the ER from W – Workers Paid by Result
paying the additional compensation required. (Art. 88) Compensation computed on the basis of work
accomplished and not on time spent in accomplishing the
For purposes of computing overtime and other additional work.
remuneration as required by this Chapter the “regular a. Paid by Task (wholesale) – those who are
wage” of an EE shall include the cash wage only, without compensated on the basis of the completion or
deduction on account of facilities provided by the ER. accomplishment of a certain specified task.
(Art. 90)
b. Paid by Piece – those who are compensated on the
COVERAGE OF LABOR STANDARD basis of units or piece of work they produced and
Applies to ALL employees in all establishments and accomplished. The work process involved is usually
undertakings whether for profit or not. repetitive and the compensation is uniform per unit or
per piece.
c. Paid Purely on Commission
P – Persons in the personal service of another
Same as the Domestic Helper but includes not only
domestic servants or house helpers but drivers, valets and
Except the following: (MOM –GF – WPD) bodyguards as well.
M – Managerial Employees D – Domestic Helpers
a. Their primary duty consists of the management of the Perform such services:
establishment in which they are employed or of a
department or sub-division thereof;

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Coverage of Labor Standard and 13 Month Pay

a. In the ER‟s home which are usually necessary or W – Workers Paid by Result
desirable for the maintenance or enjoyment thereof; Except: Paid by Piece Employee
D – Domestic Helpers
b. Or minister to the personal comfort, convenience, or P – Persons in the personal service of another
safety of the ER as well as the members of his ER‟s
household (Sec. 2, Rule I, Book III, IRR‟s) G – Government Employee
The government and any of its political subdivisions,
However, house personnel hired by a ranking company including GOCC‟s, except those corporations operating
official, but paid for by the company itself, to maintain a essentially as private subsidiaries of the government.
staff house provided for the official, are not the latter‟s
domestic helpers but regular EE‟s of the company. (Cadiz M – Managerial Employees
vs. Philippine Sinter) E – Employee being paid equivalent of 13th month pay
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ER‟s already paying their EE‟s a 13 month pay or more in
13TH MONTH PAY a calendar year or its equivalent at the time of this
All land-based employers are required to pay all their rank-and- issuance.
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file employees a 13 month pay not later than December 24 of
every year. The term “its equivalent” … shall include Christmas bonus,
o 1/12 of the total basic salary earned by an EE within a mid-year bonus, cash bonuses and other payments but
calendar year. shall not include cash and stock dividends, cost of living
allowances and other allowances regularly enjoyed by the
o To be paid only to rank-and file employees regardless of EE, as well as non-monetary benefits. Where an ER pays
the amount of their basic salary. th
less than required 1/12 of the EE‟s basic salary, the ER
o Paid not later than December 24. shall pay the differences.
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To be entitled to the 13 month pay benefit, it is imposed as S – Supervisory Employee
a minimum service requirement that employees, regardless Have the following duties and functions:
of their designation or employment status and irrespective of a. Assist the department superintendent in various
the method by which their wages are paid, should have aspects of management such as in the planning of
worked r at for least one (1) month during the calendar year. systems and procedures;
b. Recommends disciplinary action against erring
It is possible that ½ of the payment of 13th month pay be subordinates or promotion of deserving personnel,
given to employees before the opening of the regular school train and guide subordinates;
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year and the other half on or before 24 day of December of c. Communicate and coordinate with other supervisors;
every year. The frequency of the payment of this monetary d. Recommend measures to improve work method; and
benefit may be subject of agreement between the employer e. Other related tasks as may be assigned by his
and the recognized CBA of the employees. immediate superior.
They discharge duties and responsibilities which qualify
OFW is no entitled to 13th month pay in the absence of any them as members of the managerial staff.
provision in his employment contract granting the payment
thereof (Petroleum Shipping Limited v. NLRC, G.R. No. A distressed ER may qualify for exemption for the 13th month
148130, June 16, 2006) pay if there is prior authorization from the DOLE. (Dentech vs.
NLRC)
An employee who has resigned or whose services were
terminated at any time before the time for payment of the
13th month pay is entitled to this monetary benefit proportion
to the length of time he worked during the year, reckoned
from the time he started working during the calendar year up
to the time of his resignation or termination of service.
(Monthly Salary x # of months he worked during he year) / 12

Basic Salary (For purposes of computing the 13th month pay)

 include remuneration or earnings paid by this ER for
services rendered
 but does not include allowances and monetary benefits
which are not considered or integrated as part of the
regular or basic salary, such as the cash equivalent or
unused vacation and sick leave credits, overtime, premium,
night-differential and holiday pay, and cost-of-living
allowances.
However, these salary-related benefits should be
included as part of the basic salary in the computation of
the 13th month pay if the individual or collective
agreement, company practice or policy, the same are
treated as part of the basic salary of the EE‟s.

The following are not entitled to 13th month pay:

(WPD – G – MES)