LABOR STANDARDS

(Conditions of
Employment pt. 2)

Atty. Stephanie Joy A. Rolusta-Valdez

DMMMSU-MLUC College of Law
Meal Periods

Every Er shall give his Ees not less than 60 minutes or 1

hour time off for regular meals (LC, Art. 85)

Regular meals can be taken inside or outside company

premises.
Compensable • It is compensable when the lunch period or
mealtime is;

Meal Period 1. When it is predominantly spent for the Er’s

benefit; or
2. When it is less than 60 minutes.
Where Meal Periods are Shortened:
Compensable or Not Compensable

1. Compensable – at the instance of the Er, when:

a. Work is non-manual in nature or does not involve strenuous
physical exertion;
b. Establishment regularly operates less than 16 hours a day;
c. Work is necessary to prevent serious loss of perishable goods;
d. Actual or impending emergency or there is urgent work to be
performed on machineries and equipment to avoid serious loss
which the Er would otherwise suffer.
Where Meal Periods are Shortened:
Compensable or Not Compensable
2. Not Compensable – Ee requested for shorter mealtime so that he can
leave work earlier than the previously established schedule.
Requisites:

a. Ees voluntarily agree in writing and are willing to waive OT pay for the
shortened meal period;

b. No diminution in the salary and other fringe benefits of the Ees which are
existing before the effectivity of the shortened meal period;
Requisites:

c. Work of the Ees does not involve strenuous physical exertion and they are provided with adequate coffee breaks in
the morning and afternoon;

d. Value of the benefits derived by the Ees from the proposed work arrangements is equal to or commensurate with the
compensation due them for the shortened meal period as well as the OT pay for 30 min. as determined by the Ees
concerned;
Requisites:

e. OT pay will become due and demandable after the new

time schedule;

f. Arrangement is of temporary duration.

If the mealtime is less than 20 minutes, it becomes only a

rest period and is considered working time.
NIGHT SHIFT DIFFERENTIAL

• Every employee shall be paid a night shift differential of not less

than ten percent (10%) of his regular wage for each hour of work
performed between 10:00 PM and 6:00 AM.
 Those of the government and any of its political
subdivisions, including GOCCs;

Those of retail and service establishments regularly

employing not more than five (5) workers;
General Rule:
All employees
are entitled to Domestic helpers and persons in the personal
NSD. service of another;
 4. Managerial employees as defined in Book Three of this
Code;

General Rule: 5. Field personnel and other employees whose time and
performance of is unsupervised by the employer including
All employees those who are engaged on task or contract basis, purely
commission basis or those who are paid with a fixed amount
are entitled to for performing work irrespective of the time consumed in the
performance thereof.

NSD.
Note

Where the nighttime work of an employee

overlaps with overtime work, the receipt of
overtime pay does not preclude the receipt of
night differential pay. The latter is night pay/
NSD while the former is payment beyond
eight hour of work.
Overtime Work, Overtime Pay

Overtime work consists of hours worked on a given day

in excess of the applicable work period, which is eight
(8) hours.

It is not enough that the hours worked fall on

disagreeable or inconvenient hours. In order that work
may be considered as overtime work, the hours worked
must be in excess of and in addition to the eight (8)
hours worked during the prescribed daily work period, or
the forty (40) hours worked during the regular work
week Monday thru Friday.
Article 87. Overtime work. 

• Work may be performed beyond eight (8) hours

a day provided that the employee is paid for the
overtime work, an additional compensation
equivalent to his regular wage plus at least
twenty-five percent (25%) thereof. Work
performed beyond eight hours on a holiday or
rest day shall be paid an additional
compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at
least thirty percent (30%) thereof. (Labor Code)
Overtime Pay
Additional compensation of at least (25%) of the regular wage for the service or
work rendered or performed in excess of eight (8) hours.

Based on regular base pay excluding money received by the employee in different
concepts such as Christmas bonus and other fringe benefits.

It is computed by multiplying the overtime hourly rate by the number of hours in

excess of eight.

General Rule: Express instruction from the Er to the Ee to render OT work is not
required for the Ee to be entitled to OT pay; it is sufficient that the Ee is permitted
or suffered to work.

However, WRITTEN AUTHORITY after office hours during rest days and
holidays are required for entitlement to compensation.
 Ee is made to work longer than what is
commensurate with his agreed compensation for the
statutory fixed or voluntarily agreed hours of labor he
is supposed to do.

Law on overtime will ease unemployment problem,

for employers will be constrained to employ
additional employees to work in other shifts
Rationale of necessary for the operation of the business.

Overtime Pay
 Xpn: Compulsory Overtime
• When the country is at war or when any other national or
when any other national or local emergency has been
declared by Congress or the Chief Executive;
• When overtime work is necessary to prevent loss of live or
property or in case of imminent danger to public safety due
to actual or impending emergency in the locality caused by
General Rule: The serious accident, fire, floods, typhoon, earthquake,
epidemic, or other disaster or calamities;
employee may not
be compelled to
work for more than
eight (8) hours a
day.
 Xpn: Compulsory Overtime
• 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 causes of similar nature;
• When the work is necessary to prevent loss or damage to perishable
goods;
• When the completion or continuation of work started before the 8 th
hour is necessary to prevent serious obstruction or prejudice to the
business or operations of the employer; or
General Rule: The • When overtime work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is
employee may not dependent thereon.
be compelled to
work for more than
eight (8) hours a
day.
Note:

In cases not falling within any of these enumeration in this Section, no employee may be
made to work beyond eight hours a day against his will.

The employee may still refuse to render overtime even if compelled, although not
without disciplinary consequence for his refusal that could constitute insubordination, a
potential ground for termination of employment.
Overtime Pay v. Overtime Pay Premium Pay
Additional compensation Additional compensation
Premium Pay for work performed
beyond eight hours on
for work performed within
eight hours on days when
ordinary days (within the normally he should not be
worker’s 24-hour working (on non-working
workday) days, such as rest days
and special days). But
additional compensation
for work rendered in
excess of eight hours
during these days is also
considered OT pay.
Overtime Pay Rates
OVERTIME PAY RATES

During a regular working day Additional compensation of 25% of the regular wage

During a holiday or rest day Rate of the first eight hours worked on plus at least 30% of
the regular wage (RW);

If done on a special holiday OR rest day;

30% of 130% of RW;

If done on a special holiday AND rest day; 30% of 150%

of RW

If done on a regular holiday: 30% of 200% of RW

Undertime Not Offset by Overtime

• Article 88. Undertime not offset by overtime. Undertime 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.
 The rule will prevent the anomalous situation whereby an
employee could schedule his working hours at will thereby
destroying the regular working schedules.

To allow offsetting would prejudice the worker. He would be

deprived of the additional pay for the rest day work he has
rendered and which is utilized to offset his equivalent time off
on regular workdays. To allow employer to do so would be to
circumvent the law on payment of premiums for rest day and
holiday work.

Rationale
Emergency
Overtime Work
General Rule: An Ee
may not be compelled
to render OT work;
OT work is voluntary.
 XPNs:
1) When the country is at war or when any other national or when any other national or local emergency has been declared by Congress or the Chief Executive;

2) When overtime work is necessary to prevent loss of live or property or in case of imminent danger to public safety due to actual or impending emergency in
the locality caused by serious accident, fire, floods, typhoon, earthquake, epidemic, or other disaster or calamities;

3) 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
causes of similar nature;

4) When the work is necessary to prevent loss or damage to perishable goods;

5) When the completion or continuation of work started before the 8 th hour is necessary to prevent serious obstruction or prejudice to the business or operations
of the employer; or

6) When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.
Weekly Rest Day (WRD)

• Every Er shall give his Ees a rest period of not less

than 24 consecutive hours after every 6 consecutive
normal work-days.
• Rest day not necessarily Saturday or Sunday.
• 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 provided under the law.
Persons who determine
the WRD
General Rule: Er shall determine
and schedule the WRD of his Ee.
Persons who determine the WRD

XPNs:
1. CBA;
2. Rules and regulations as the Secretary of Labor and Employment provides;
3. Preference of the Ee based on religious grounds. Ee shall make known his preference in writing at least
seven (7) days before the desired effectivity of the initial rest day so preferred.
XPN to the XPN no. 3:
- Er may schedule the WRD of his choice for at least two (2) days in a month if the presence of the Ee will
inevitably result in:
a. Serious prejudice to the operations of the undertaking; and
b. The Er cannot normally b expected to resort to other remedial measures.
 General Rule: The Ee cannot be
compelled by the Er to work on
Emergency Rest Day Work his rest day.
 In case of actual or impending emergencies
In cases of urgent work to be performed on the
caused by serious accident, fire, flood, typhoon,
machinery, equipment, or installation, to avoid
earthquake, epidemic or other disaster or
serious loss which the employer would
calamity to prevent loss of life and property, or
otherwise suffer;
imminent danger to public safety;

In the event of abnormal pressure of work due

to special circumstances, where the employer
To prevent loss or damage to perishable goods;
cannot ordinarily be expected to resort to other
measures;

Where the nature of the work requires

Under other circumstances analogous or similar
continuous operations and the stoppage of work
to the foregoing as determined by the Secretary
may result in irreparable injury or loss to the
of Labor and Employment.
employer; and

XPNs:
It is the additional compensation for the work rendered
by the Ee on days when normally he should not be
Premium Pay
working such as special holidays and WRDs.

Refers to the additional compensation required by law

to be paid for work performed within the regular eight
(8) hours on non-working days such as rest days and
special holidays.

Refers to the regular wage combined with the

additional compensation of 30% under Art. 93 and
under 100% under Art. 94.
 INSTANCES RATES OF ADDITIONAL COMPENSATION

Work on a scheduled rest day +30% premium pay of 100% regular wage (IRR,
Book III, Rule III, Section 7)

Work performed on Sundays and Holidays by an +30% premium pay of 100% regular wage (IRR,
Ee who has no regular workdays and rest days Book III, Rule III, Section 7)

Work on a Sunday (If Ee’s scheduled rest day) +30% premium pay of 100% regular wage IRR,
Book III, Rule III, Section 7)

Work performed on any Special Holiday 1st eight (8) hours + 30% premium pay of 100%
regular wage (IRR, Book III, Rule III, Section 7)

Rates of Work performed on a Special Holiday and same

day as the scheduled rest day
1st eight (8) hours + 50% premium pay of 100%
regular wage

Compensation Excess of eight (8) hours + 30% of hourly rate on

said date (M.C. No. 10, Series of 2004)

for Rest Day, Work performed on a Special Working Day Ee is only entitled to his basic rate. No premium
pay required.

Sunday or Reason: for work performed is considered work on

ordinary working days (IRR, Book III, Rule III,

Holiday Work
Section 7)
Holiday Pay
One pay given by law to an employee even if he does not work on a regular
holiday.

The payment of the regular daily wage for any unworked regular holiday.

It is a premium given to Ees pursuant to the law even if he has not been
suffered to work on a regular holiday. It is limited to the 12 regular
holidays, also called legal holidays listed by law.

The Ee should not have been absent without pay on the working day
proceeding the holiday.
Persons Entitled to Holiday
Pay
• General Rule: All Ees are entitled. (Sec.
1, Rule IV, Book III, IRR)
XPNs:

Government Ees and any of its Retail and service Ee engaged on task or contract
Domestic helpers and persons in
political subdivisions including establishments regularly basis or purely commission
the personal service of another;
GOCCs (with original charter); employing less than 10 workers; basis;

Ee paid fixed amount for

Members of the family of the Er Managerial Ee and other Field personnel and other Ee
performing work irrespective of
who are dependent upon him for members of the managerial whose time and performance are
the time consumed in the
support; staff; unsupervised by the Er; and
performance thereof.
Retail establishments

• They are engaged in the sale of

goods to end users for personal or
household use. (grocery store)
Service Establishments

• They are engaged in the sale of

service to individuals for their
own or household use. (TV repair
shop)
Purpose of Holiday Pay

To secure the payment of undiminished monthly Aimed at benefitting daily-paid workers whose The law on holiday pay is thus conceived to be the
monthly income undisturbed by any work income is circumscribed by the principle of “no countervailing measure to partially offset the
interruption. In other words, although the worker is work no pay. Prior to the enactment of the Labor disadvantages inherent in the daily compensation
forced to take a rest, he earns what he should earn, Code, daily paid workers were not paid for system of employment.
that is his holiday pay. unworked regular holidays.
Legal Holiday

• It is a day designated or set apart by the legislature for a purpose within

the meaning of the term “holiday” to commemorate an important event.
 GR: They are compensable whether worked or
unworked subject to certain conditions. They are
also called legal holidays.

XPNs: A legal holiday falling on a Sunday

creates no legal obligation for the employer to
pay extra, aside from the usual holiday pay, to its
Regular monthly-paid employees.

Holidays
Regular New Year’s Day January 1

Holidays Araw ng Kagitingan

Maundy Thursday
Monday nearest April 9
Movable Date
Good Friday Movable Date
Labor Day May 1
Independence Day June 12
National Heroes Day Last Monday of August
Eidl Fitr Movable Date
Eidl Adha Movable Date
Bonifacio Day November 30
Christmas Day December 25
Rizal Day December 30
 Special
(Non-
NINOY AQUINO DAY AUGUST 21

All Saints Day November 1

Working)
Feast of Immaculate
Conception of Mary (RA
December 8
Holiday
10966)

Last Day of the Year December 31

Other holidays declared by

law or ordinance
Regular v.
Special If unworked:
Regular Holiday Special Holiday
Compensable subject to Not compensable

Holiday certain conditions

If worked: Compensable Rate is Additional 30% of

200% of the regular premium pay of 100%
rate Regular Wage

Limited to the 12 Not exclusive; law or

holidays provided in ordinance may provide
the Labor Code for other special
holidays
Important condition that should be
met in order to avail / receive the
single holiday pay

• The Ee should not have

been absent without pay on
the working day
immediately preceding the
regular holiday.
13 th Month Pay

It is a form of monetary benefit equivalent to the monthly basic compensation received by

an employee, computed pro-rata according to the number of months within a year that the
employee has rendered service to the employer.

Additional income based on wage required by PD 851 requiring all Ers to pay their Ees a
13th month pay which is equivalent to 1/12 of the total basic salary earned by an Ee within
a calendar year.
Basic Salary
• Includes all remunerations or earnings paid by the employer to an employee
for services rendered including cost-of-living allowances.
• It does not include all allowances and monetary benefits which are not
considered or integrated as part of the regular or basic salary such as:
1. Cash equivalent of unused vacation and sick leave credits;
2. pay;
3. Premium pay;
4. Night shift differential;
5. Holiday Pay;
6. Commissions.
Time of Payment of 13 th
month pay
• Under PD 851, all employers are required to
pay all their rank-and-file employees a 13 th
month pay not later than Dec. 24 of every
year.
Nature of 13 th
month pay Such is in the nature of additional
income granted to employees who are
not receiving the same.

It is based on wage but not part of

wage.
Minimum Period of
Service Required

• It is imposed as a
minimum service
requirement that the
employee should have
worked for at least one (1)
month during a calendar
year.
Equivalent forms of the 13 th month pay

1. Christmas bonus
2. Midyear bonus
3. Profit sharing scheme
4. Other cash bonuses amounting to not less than ½ of its basic salary

Note: It must always be in the form of legal tender.

 Free rice

Electricity
Things not
proper Cash and stock dividends

substitutes for
13 th month Cost of living allowance.

pay
Service Charges

• These are charges collected

by hotels, restaurants and
similar establishments
distributed completely and
equally among the covered
workers except managerial
employees.
Covered employees

• GR: All employees are

covered regardless of their
position, designation, and
employment status,
irrespective of the method by
which their wages are paid.
• XPN: Managerial Ees.
Frequency of
Distribution
• RA 11360 amended Art. 96 of the Labor Code
wherein the former provides that all service
charges collected by hotels, restaurants and
similar establishments shall be distributed
completely and equally among the covered
workers except managerial employees.
• The period is not less than once every 2
weeks or twice a month at intervals not
exceeding 16 days. (RA 11360, IRR)
Service
Charge v.
Tips Service Charge

Collected by the
Tips

Voluntary payments made by

management from the customers to the Ees for
customers. excellent service.