Labor Standards

Scope: minimum requirements pursuant

to provisions of Labor Code, OSHS, and

other allied legislations and their rules and regulations. Include GLS wages, wage-related benefits, hours as well as General Occupational Safety and Health.

WAGES
Wage paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or or to be done, or for services rendered and this includes the fair and reasonable value as determined by the Secretary of Labor, of board and lodging & other facilities customarily furnished by an employer to the employee.

Fair and Reasonable Value

Meals and snacks not more than 70% of the value of the meals and snacks enjoyed by the employees. The remaining 30% has to be subsidized by the employer. Ex. P50.00 x 70% = P35.00 P35.00 x 3 meals = P105.00 P105.00 x 26 days = P2,730.00 Lodging the cost of operation and maintenance,

including adequate depreciation plus reasonable

allowance (but not more than 5% interest of the depreciated amount of capital OR the fair rental value.

Who will determine the fair and reasonable value of the facilities?
Sec. 3, Rule VII-A, Book III of the IRR The Secretary of Labor and Employment, or his duly authorized representative, may from time to

time fix in appropriate issuances the fair and

reasonable value of board, lodging and other facilities customarily furnished by an employer. Art. 97 (f) . . . . . . . . as determined by the Secretary of Labor and Employment.

Covered Workers
All Minimum Wage Earners in the private sector in the National Capital Region regardless of their position, designation or status and irrespective of the method by which their wages are paid.

Exclusions
Household or domestic helpers Persons in the personal service of another, including family driver Workers of registered Barangay Micro Business Enterprises (BMBEs) with Certificate of Authority

Exemptible Categories
Retail/ service establishments employing not more than 10 workers Distressed establishments Establishments facing potential losses Establishments with total assets (including from loans but exclusive of the land on which the particular business entitys office, plant and equipment are situated) are not more than P3,000,000.00
EXEMPTION IS FOR A MAXIMUM PERIOD OF ONE YEAR FROM EFFECTIVITY OF THE WAGE ORDER

Creditable Increase
Unorganized Establishments Increase granted within five (5) months prior to effectivity of the Wage Order shall be creditable as compliance Organized Establishments Creditability provision of the CBA will prevail In both cases: should not include anniversary, merit increase and those resulting from the regularization or promotion of employees. should the increase granted be less than the prescribed adjustment, the employer shall pay the difference.

Payment of Wages
Forms of payment legal tender, check, ATM Time of payment once every 2 weeks or twice a month at intervals of not exceeding 16 days

Place of payment workplace

Direct payment of wages directly to the workers to whom they are due

Workers Paid by Result

Are those workers whose pay is calculated not on

the basis of time spent on the job but according to

the quantity and quality or the kind of work they turn out. The applicable Minimum Wage of workers paid by results including those who are paid on piecework, takay, pakyaw and task basis should not be less than the applicable minimum wage rates for normal working hours.

Payment by Results
Article 101 of LC: The Secretary of Labor shall regulate the payment of wages by results, including pakyaw, piecework and other non-time work, in order to ensure the payment of fair and reasonable wage rates, preferably through time and motion studies or in consultation with the reps of workers and employers organizations. Par. (a), Sec. 8, Rule VII, Book III of the IRR: On petition of any interested party, or upon its initiative, the DOLE shall use all available resources, including the use of time and motion studies x x x x x to determine whether the employees x x x x x are being compensated in accordance with the prescribed minimum wage.

Two Kinds of Workers Paid by Results

1. Those whose time and performance is supervised by the employer. (Piece rategenerally done in the company premises as is practiced in garment factories.) 2. Those whose time and performance is unsupervised. (Pakyaw and takay which is commonly practiced in the agricultural industry, e.g. in sugar plantations.)

Apprentices/ Learners
Are those covered by Apprenticeship/ Learnership Program duly approved by the Technical Education and Skills Development Authority (TESDA). The applicable minimum wage should not be less than seventy five (75%) of the applicable statutory wage rates.

13th Month Pay

A. Coverage:
All employers are required to pay their rank and file
employees - regardless of the nature of their employment; and - irrespective of the method by which their wages are paid

- provided they worked for at least one (1) month

during a calendar year.

B. Minimum Amount of 13th Month Pay

Shall not be less than 1/12 of the total basic salary earned by an employee within a calendar year.
basic salary
services rendered. - does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary.

all remunerations or earnings for

C. Time of Payment
Shall be paid not later than December 24 of each year. An employer, however, may give to his employees one half (1/2) of the required 13th month pay before the opening of the regular school year and the other half on or before the 24th of December of every year.

D. Formula
Total Basic Salary 12 Months

= 13th Month Pay

Overtime Pay
Additional compensation for work or service

rendered or performed in excess of 8 hours;

25% - ordinary working days; 30% - rest days, special days, and regular holidays; No Overtime Pay if Compressed Workweek Scheme is voluntarily adopted; Undertime work not offset by overtime work.

Night Shift Differential Pay

Not applicable to employees of retail and service establishments regularly employing not more than 5 employees, managerial & field employees. Not less than ten percent (10%) of the EEs regular wage for each hour of work performed between ten oclock in the evening and six oclock in the morning. Sample computation: P275.00/ 8 hrs. = P34.38 x 10% = P3.44 P3.44 + P34.38 = P37.82

Regular Holiday Pay

Not applicable to employees of retail and service

establishments regularly employing less than ten (10)

employees; Domestic helpers & persons in the personal service

of another;
Managerial employees; and Field Personnel and other employees whose time and

performance is unsupervised by the employer like

task or contract basis, purely commission basis.

Regular Holidays
Regular Holidays Under Republic Act 9492 New Years Day Maundy Thursday Good Friday Eidul Fitr Araw ng Kagitingan Labor Day Independence Day National Heroes Day Bonifacio Day Christmas Day Rizal Day January 1 Movable Date Movable Date Movable Date Monday nearest April 9 Monday nearest May 1 Monday nearest June 12 Last Monday of August Monday nearest Nov. 30 December 25 Monday nearest Dec. 30

Payment of Holiday Pay

If worked - 200% of the regular wage If unworked - 100% of the regular wage Condition for entitlement: the employee should not have been absent without pay on the last working day preceding the regular holiday

Special Holidays Premium Pay

Special Holidays under RA 9492:
Ninoy Aquino Day ----- Monday nearest August 21
All Saints Day ------------ November 1 Last Day of the Year --- December 31

Payment:
30% based on the EEs regular wage 50% if the special day falls on the EEs rest day

Daily Paid EEs :

No Work, No Pay applies

Rest Day Premium Pay

It shall be the duty of every employer, whether operating for profit or not, to provide each employee a rest period of not less than twenty-four (24) hours after every six (6) consecutive normal work days.

Payment:
30% based on the EEs regular wage 50% if the rest day is at the same time

a special day
Daily Paid EEs: No

Work, No Pay applies

Service Charges (Art. 96)

Applies to all employees of covered employers, regardless of their positions, designations or employment status, and irrespective of the method by which their wages are paid, except managerial employees. Distribution: 85% - shall be distributed equally among the covered employees and 15% for the management. Frequency of distribution. Permanency of service charges.

Meal Periods
Not less than sixty (60) minutes (not compensable) If less than sixty (60) minutes, compensable but, in no case, be less than twenty (20) minutes and only in the following cases:
1.

Non-manual work or does strenuous physical exertion;

not

involve

2.

Operation not less than sixteen (16) hours a day; Emergencies, urgent work - to avoid serious losses; and Necessary - to prevent serious losses of perishable goods.

3.

4.

Five (5) Days Service Incentive Leave Pay

Applies only to employees who have rendered at

least one (1) year service;

Exceptions:
Those who are already enjoying the benefit; Those enjoying vacation leave with pay for at

least five (5) days;

Those employed in establishments regularly

employing less than ten (10) employees.

Five (5) Days Service Incentive Leave Pay

Commutable to its money equivalent if not used or exhausted at the end of the year; The basis of conversion shall be the salary rate

at the date of commutation;

Vacation mandatory Leave or and legally Sick Leave are not

required;

voluntary;

employers discretion.

Maternity Leave
(Republic Act. No. 1161 as amended by R. A. No. 8282 otherwise known as the Social Security Law of 1997 took effect on May 24, 1997.) A female employee who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of her childbirth, or miscarriage shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her average salary credit for sixty (60) days or seventy-eight (78) days in case of caesarean delivery.

Paternity Leave
Coverage

Every married male employee in the private sector shall be entitled to paternity leave

benefits of seven (7) days with full pay for the

first four (4) deliveries by his lawful spouse.

Condition for Entitlement of Paternity Leave Benefits

A married male employee shall be entitled to

paternity benefits provided that:

He is an employee at the time of delivery of his child;

He is cohabiting with his spouse at the time she gives birth or suffers a miscarriage;
He has applied for paternity leave in accordance with company rules after notification; and His wife has given birth or suffered a miscarriage.

Retirement Pay
Coverage
Employees shall be retired upon reaching the age of 60 years or more but not beyond 65 years old.
The retirement benefits pursuant to Article 287 of the LC, as amended under RA 7641 and RA 8558 are distinct and separate from the benefits provided by the SSS law. The minimum retirement pay shall be equivalent to one-half month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.

 For the purpose of computing retirement pay, onehalf month salary shall include all of the following: a. 15 days salary based on the latest salary; b. cash equivalent of 5 days of SIL; and

c. one-twelfth (1/12 of the 13th month pay)

Other benefits may be included in the computation of the retirement pay upon agreement of the employer and the employee or if provided in CBA. To illustrate:
Minimum Retirement Pay = number of years in service x one-half month salary

Retirement under a Collective Bargaining Agreement (CBA) Any employee may retire or be retired by his employer upon reaching the retirement age established in the CBA or other applicable agreement/contract and shall receive the retirement benefits granted therein; provided, however, that such retirement benefits shall not be less than the retirement pay required under RA 7641 and provided further that if such retirement benefits under the agreement are less, the employer shall pay the difference.

Weekly Rest Periods

Not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days; Employer shall determine and schedule the weekly rest day of his employees; The employer shall respect the preference of the employees based on religious grounds.

Normal Hours of Work

Shall not exceed eight (8) hours a day. Does not always mean continuous and uninterrupted eight hours of work (broken hours).

Coverage
Employees in all establishments and undertakings whether for profit or not.

Exception
Government employees, managerial employees, other officers or members of the managerial staff, domestic servants, non-agricultural field personnel, and members of the family of the employer.

Compressed Workweek
Is a scheme where the generally observed six (6) days workweek of eight (8) hours per day is shortened to five (5) days only. The Saturday or 6th day work may either be evenly distributed over the five (5) working days from Monday to Friday.

In the adoption of the compressed workweek, the following concurring conditions should be met:
1. The employees voluntarily agree to work more than eight hrs./day, the total in a week of which shall not exceed their normal weekly hours of work, prior to adoption of the CWW arrangements.

ContinuationCompressed Workweek

2. There will be no diminution whatsoever in the weekly or monthly take-home pay and fringe benefits of the employee.

3. If an employee is permitted or required to work in excess of his normal weekly hours of work prior to the adoption of the CWW scheme, all such excess hours shall be considered overtime work and shall be compensated in accordance with the provisions of the LC or applicable CBA.
4. Appropriate waivers with respect to overtime premium pay for work performed in excess of eight (8) hours a day may be devised by the parties to the agreement. 5. The effectivity and implementation of the new working time arrangements shall be by agreement of the parties.

ContinuationCompressed Workweek

EMPLOYERS adopting the compressed workweek

scheme provided herein shall submit a REPORT to the Department of Labor and Employment or to its nearest Regional Office not later than ten (l0) days from the adoption of the scheme.

Registration of Contractor/ Sub-contractor (D.O. 18-02)

Issuance governing contracting and subcontracting arrangements. These rules apply to all parties of contracting and sub-contracting arrangements where employer-employee relationship exists. D.O. 18-02 requires registration of contractors and sub-contractors for purposes of establishing effective labor market information and marketing. This registration is different from registration of establishment under Rule 1020 of Occupational Safety and Health Standards.

Separation Pay (Art. 283-284)

Separation pay is given to employees in instances

covered by Articles 283 and 284 of the Labor Code. An employees entitlement to separation pay depends on the reason or ground for the termination of his services. An employee may be terminated for just cause i.e. gross and habitual neglect of duty, fraud or commission of a crime, and other similar causes as enumerated under Art. 282 of the Labor Code and generally may not be entitled to separation pay. On the other hand, where the termination is for authorized causes, separation pay is due.

A. One month pay or one-half month pay per year of service

An employee is entitled to receive as separation pay the equivalent to one (1) month pay, or one-half (1/2) month pay whichever is higher for every year of service, a fraction of at least six months being considered as one (1) whole year, if his separation from the service is due to any of the following causes: 1. Retrenchment to prevent losses, i.e. reduction of personnel effected by management to prevent losses; 2. Closure or cessation of operation of operation of an establishment not due to serious losses or financial reverses; and

3.

When the employee is suffering from a disease not curable within a period of six (6) months and his continued employment is prejudicial to his health or to the health of his co-employees.

In no case will an employee get less than one (1) month separation pay if the separation is due to the above stated causes, and he has served for at least six months.
Thus, if an employee had been in the service for at least six (6) months but less than a year, he is entitled to one (1) full months pay if his separation is due to any of the causes enumerated above. Service of one year and above entitles the employee month pay for every year of service, a fraction of at least 6 months considered one year.

B. One (1) month pay per year of service An employee is entitled to separation pay

equivalent to

his one (1) month pay for every year

of service, a fraction of at least six (6) months being considered as one whole year, if his separation from service is due to any of the following: a. Installation by employer of labor-saving devices. b. Redundancy, as when the position of the employee has been found to be surplusage or unnecessary in the operation of the enterprise.

c. Impossible reinstatement of the employee to his former or to a substantially equivalent position for reasons not attributable to the fault of the employer, as when the reinstatement ordered by a competent authority cannot be implemented due to closure or cessation of operations of the establishment/ employer, or the position to which he is to be reinstated no longer exists and there is no substantially equivalent position in the establishment to which he can be assigned (per Supreme Court Decision).

Alien Employment Permit

Alien Employment Permit refers to the certificate
issued by the Director of the Regional Office authorizing a resident alien to work in the

Philippines.
Copy of the AEP, if employing aliens shall be

kept at the workplace.

Work Permit (for Children)

Before an employer engages a child for

employment, he must first secure a work permit

from the Regional Office of the DOLE having jurisdiction over the workplace. Copy of Work Permit, if employing children less than 15 years of age in the entertainment industry shall be kept in the workplace.

Payrolls/ Daily Time Records

The payroll must show the names, sex, wage or

salary, allowances and other salary related

benefits such as overtime pay, premium pay, deductions for withholding tax, SSS premiums,

PAG-IBIG premium and other legal deductions,

and the signature of the employees;

Must be kept for a period of at least three (3)

years at the workplace.

List of Labor Component

Pursuant to RA 6727, employers are required

to submit to the Natl. Wages and Productivity Board a list of their employees and the

corresponding

information

like

length

of

employment, status of employment and the corresponding salary.

Registration with SSS

All employers must remember that their employees are members of the SSS from the first day of employment, hence they must keep copies of Registration of Employees at the workplace. All employers who failed to register their employees with the SSS will deprive their employees the benefits due them other than the maternity leave, such as: Cash income benefits for TTD, PP and PTD; sickness benefit; lifetime monthly pension of members; dependent in case of death of member; death benefit; funeral benefit; entitlement to salary loan, housing loan and calamity loan. All employers must remember that their failure to register their employees to the SSS and to remit the corresponding premiums of said employees will make them criminally liable under the SSS law.

Coverage under the PAG-IBIG Fund Program

All employers shall remit to the PAG-IBIG Fund

Office the required contribution to the PAG-IBIG Fund Office as provided by law.

Relationship between Core Labor Standards, ILO Conventions, International and National Legislation/ Practice

Core Labor Standards

Bureau of Working Conditions

Core Labor Standards

ILO Conventions on

Four Core Labor Standards

1.
2. 3. 4.

Freedom of association and right to collective bargaining; ILO Convention 87 & 98

Elimination of all forms of forced labor;
ILO Convention 29 & 105

Effective abolition of Child Labor;

ILO Convention 138 & 182

Elimination of discrimination in respect of employment and occupation; ILO convention 100 & 111
Source: ILO Handbook on Core Labor Standards

Bureau of Working Conditions

Coverage of International Labor Standards

1. Occupational Health and Safety (OHS)

2.
3. 4.

Employment Promotion
Minimum Wages Social Security

5.
6. 7.

Labor Administration
Protection of Migrant Workers Working Hours for Young Workers

8.
9.

Industrial Relations
Specific Economic Sectors.
Source: ILO Handbook on Core Labor Standards

Bureau of Working Conditions

National Legislation
1. 2. 3. Labor Code of the Philippines Occupational Safety and Health Standards R.A. 9231 for the elimination of worst forms of Child Labor and affording stronger protection for the working child 4. R.A. 6275 for strengthening the prohibition on

discrimination against women with respect to

terms and conditions of employment.

Bureau of Working Conditions

Importance of Respect and Compliance to LS

1.
2. 3.

Promotes decent work;

Has productivity-increasing effect; Generates positive impact on economic and social development, and good governance;

4.

Contributes to poverty reduction.

Source: ILO Handbook on Core Labor Standards

Bureau of Working Conditions