Monday, January 22, 2018

Basic Labor Code of the Philippines - Overtime

Overtime
Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work.  A work day is also defined as a 24 hours period from the start of work.
The overtime rate for a normal working day in the Philippines is 25% plus the employee’s regular wage. However, if overtime time is performed on a rest day or holiday, the overtime rate shall be increased to 30% plus the employee’s regular wage. 

    Hourly Rate of Overtime
Normal Day
125%
Rest Day
169%
Special Holiday
169%
Regular Holiday
260%
Special Holiday + Rest Day
195%
Regular Holiday + Rest Day
338%


Ex) An employee with Hourly Rate P100 rendered 2 hours overtime work on a Rest Day
 Hourly Rate for 8 Hours Work = (P100 x 130%) = P130
 P130 x 8 Hours = P1,040
 Hourly Rate for 2 Hours Overtime on Rest Day = (P130 x 130%)  = P169
 Total Daily Rate = P1,040 + (P169 x 2 Hours) = P1,378

Notes: It's a taxable income.
Notes: Excluded employees:
● Employees of government, government-owned and/or controlled corporations;
● Kasambahay and persons in the personal service of another;
● Managerial employees including managerial staffs;
● Workers who are paid by results;
● Field personnel and other employees whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

Under-time should not offset by overtime
Under-time work on any particular day shall not be offset by overtime work on any other day. 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 required in this Chapter. 


Emergency overtime work
Any employee may be required / compelled by the employer to perform overtime work in any of the following cases:
● When the country is at war or when any other national or local emergency has been declared by  the National Assembly or the Chief Executive;
● When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, or other disaster or calamity;
● When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature;
● When the work is necessary to prevent loss or damage to perishable goods;
● When the completion or continuation of the work started before the eight hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer;

In cases not falling within any of these enumerated in this Section, no employee may be made to work beyond eight hours a day against the employee’s will. However, if a worker unjustifiably refuses to render compulsory overtime work in the specified circumstances, his refusal may be considered an act of insubordination.

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