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    Overtime Pay - Philippine Labor Laws

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    AJ Quim
    The document discusses Philippine labor laws regarding overtime pay. It states that employees are entitled to overtime pay for any work performed beyond eight hours in a workday according to Article 87 of the Labor Code. It provides the formulas for calculating overtime rates on ordinary workdays as well as holidays and rest days. The document also discusses exceptions for emergency overtime work and notes that managerial employees are not entitled to overtime pay.

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    Overtime Pay - Philippine Labor Laws

    Uploaded by

    AJ Quim
    4K views4 pages
    The document discusses Philippine labor laws regarding overtime pay. It states that employees are entitled to overtime pay for any work performed beyond eight hours in a workday according to Article 87 of the Labor Code. It provides the formulas for calculating overtime rates on ordinary workdays as well as holidays and rest days. The document also discusses exceptions for emergency overtime work and notes that managerial employees are not entitled to overtime pay.

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    Overtime Pay _ Philippine Labor Laws

    Original Title

    Overtime Pay _ Philippine Labor Laws

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    The document discusses Philippine labor laws regarding overtime pay. It states that employees are entitled to overtime pay for any work performed beyond eight hours in a workday according to Article 87 of the Labor Code. It provides the formulas for calculating overtime rates on ordinary workdays as well as holidays and rest days. The document also discusses exceptions for emergency overtime work and notes that managerial employees are not entitled to overtime pay.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    4K views4 pages

    Overtime Pay - Philippine Labor Laws

    Uploaded by

    AJ Quim
    The document discusses Philippine labor laws regarding overtime pay. It states that employees are entitled to overtime pay for any work performed beyond eight hours in a workday according to Article 87 of the Labor Code. It provides the formulas for calculating overtime rates on ordinary workdays as well as holidays and rest days. The document also discusses exceptions for emergency overtime work and notes that managerial employees are not entitled to overtime pay.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    PhilippineLaborLaws

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    Feb
    23

    OvertimePay
    EmployeeWagesandBenefits20100223

    Basis.

    Allemployeesrequiredtoworkbeyondeighthoursinoneworkdayisentitledtoovertimepay.Thebasis
    ofovertimepayisfoundinArticle87oftheLaborCode.

    Article87.Overtimework.Workmaybeperformedbeyondeighthoursadayprovidedthat
    theemployeeispaidfortheovertimeworkanadditionalcompensationequivalenttohis
    regularwageplusatleasttwentyfivepercentthereof.Workperformedbeyondeighthours
    onaholidayorrestdayshallbepaidanadditionalcompensationequivalenttotheratefor
    thefirsteighthoursonaholidayorrestdayplusatleast30percentthereof.

    Terminology.

    OvertimePay.

    Overtimepayistheadditionalcompensationpayabletoemployeeforservicesorworkrenderedbeyond
    thenormaleighthoursofwork.Itiscomputedbymultiplyingtheovertimeratewiththenumberofhours
    inexcessoftheregulareighthoursofwork.

    OvertimeWork.

    Anyworkperformedbeyondthenormal8hoursofworkinoneworkdayisconsideredasovertimework.

    Workday.

    Aworkdayistheconsecutive24hourperiodwhichcommencesfromthetimetheemployeestartsto
    workandendsatthesametimethefollowingday.Toillustrate,iftheemployeeregularlyworksfrom
    8AMto4PM,hisregularworkdayisthe24hourperiodfrom8AMto8AMofthefollowingday.
    Workdaysdonotnecessarilycorrespondstocalendardays.

    OvertimePayRates.

    Overtimepayratesdependuponthedaytheworkisperformed,whetheritisordinaryworkingday,
    specialday,holidayorrestday.

    Forordinaryworkingday,anadditionalcompensationequivalenttohisregularhourlyrateplusatleast
    25%thereof.

    Forholiday,specialdayandrestday,anadditionalcompensationequivalenttotherateforthefirsteight
    hoursonaholidayorrestdayplusatleast30%thereof.

    ComputationofOvertimePay

    AssumingthatthemininumwagerateisP250,howmuchistheovertimerateperhour?

    Onordinaryday

    Onanordinaryday,theovertimerateperhourisdeterminedasfollows:

    First,computethehourlyrateoftheemployee:

    Regularhourlyrate=Minumumwagerate8hours
    =P2508hours
    =P31.25perhour

    Nowtodetermineovertimerateperhour:

    Overtimerate=Regularhourlyrate+25%ofRegularhourlyrate
    Overtimerate=P31.25+(25%ofP31.25)
    =P31.25x1.25
    =P39.06perhour

    Onrestdayandspecialday

    Computethehourrateoftheemployeeonarestdayorspecialday:

    Hourlyrate=130%ofRegularhourlyrate
    =P31.25x1.30
    =P40.625perhour
    (Note:Thehourlyrateonrestdayandspecialdayis130%oftheregularrate.)

    Todetermineovertimerateperhour:

    Overtimerate=Hourlyrateonrestday+30%Hourlyrateonrestday
    =P40.625+(30%ofP40.625)
    =P40.625x1.30
    =P52.81perhour
    Onrestdaywhichfallsonaspecialday

    Computethehourlyrateoftheemployeeonarestdaywhichfallsonaspecialday:

    Hourlyrate=150%ofRegularhourlyrate
    =P31.25x1.50
    =P46.875perhour

    Todetermineovertimerateperhour:

    Overtimerate=Hourlyrate+30%ofHourlyrate
    =P46.875+(30%ofP46.875)
    =P46.875x1.30
    =P60.94perhour

    Onaregularholiday

    Computethehourlyrateonregularholiday:

    Hourlyrate=200%ofRegularhourlyrate
    =P31.25x2
    =P62.5perhour

    Todetermineovertimerateperhour:

    Overtimerate=Hourlyrate+30%ofHourlyrate
    =P62.50+(30%ofP62.50)
    =P62.50x1.30
    =P81.25perhour

    Onarestdaywhichfallsonaregularholiday

    Computethehourlyrate:

    Hourlyrate=260%ofRegularhourlyrate
    =P31.25x2.60
    =P81.25perhour

    Todetermineovertimerateperhour:

    Overtimerate=Hourlyrate+30%ofHourlyrate
    =P81.25+(30%ofP81.25)
    =P81.25x1.30
    =P105.625perhour

    WorkneednotbeContinuous.

    Workperformedbytheemployeeneednotbecontinuousaslongasitfallswithinthesameworkday.
    Forexample,anemployeewhoworksintwoshifts,onefrom8AMto12AM(fourhours),andanother
    from4PMto8PMofthesameworkday(anotherfourhours),suffersatotalof8hoursofwork.Ifheis
    requiredtoworkforanotherhourwithinthesameworkday(from8AMto8AMofthefollowingday),
    thensuchworkissubjecttoovertimepay.

    UndertimecannotbeOffsetbyOvertime.

    Someemployershasthepracticeofoffsettingundertimeandovertime.Forexample,ifanemployee
    workforonly7hoursonanygivenday(onehourundertime),hewillberequiredtomakeupforhis
    undertimebyrequiringhimtorenderadditionalonehourworkonanotherday.Thispracticeis
    prohibitedunderArticle87oftheLaborCode,viz:

    Article87.Undertimenotoffsetbyovertime.Undertimeworkonanyparticulardayshallnot
    beoffsetbyovertimeworkonanyotherday.xxx

    Therationaleforprovisionisquiteobvious.Offsettingundertimeagainstovertimeisimproperbecause
    theemployeewouldbedeprivedoftheadditionalcompensationfortheovertimeworkhehasrendered.
    Notethatundertimeiscoveredonlybytheregularhourlyratewhereasovertimeissubjecttoadditional
    overtimerate.Ifthetwoaretobeoffset,theemployeelosesovertimepaytowhichheisentitled.

    EmergencyOvertimeWork.

    Asageneralrule,employeesmaynotbecompelledtoworkinexcessofeighthoursortorender
    overtimeworkonanygivendayagainsthiswill.

    TheexceptiontothisruleisfoundinArtile89oftheLaborCode.Underthesaidarticle,employeesmay
    becompelledtoperformovertimeworkinanyofthefollowingcases:

    1. Whenthecountryisatwarorunderanynationalorlocalemergency
    2. Whenovertimeworkisnecessarytopreventlossoflifeorproperty,orincaseofimminentdanger
    topublicsafety
    3. Whenthereisurgentworktobeperformedonmachines,etc.,inordertoavoidseriouslossor
    damagetotheemployer
    4. Whentheworkisnecessarytopreventlossordamagetoperishablegoods
    5. Whenthecompletionorcontinuationofworkisnecessarytopreventseriousobstructionor
    prejudicetothebusinessor
    6. Whenovertimeworkisnecessarytoavailoffavorableweatherorenvironmentalconditions.

    ManagerialEmployeesnotEntitledtoOvertimePay.

    Article82oftheLaborCodestatesthattheprovisionsoftheLaborCodeonworkingconditionsandrest
    periodsshallnotapplytomanagerialemployees.Thisincludesovertimepayforovertimework.Thus
    managerialemployeesarenotentitledtoovertimepayforservicesrenderedinexcessofeighthoursa
    day.

    Cases

    1. Supervisoryemployeesareconsideredasofficersormembersofthemanagerialstaff,andhence
    arenotentitledtoovertime,restdayandholidaypay.(NatlSugarRefineriesCorp.vs.NLRC,
    G.R.No.101761.March24,1993)

    LastEdited:Friday,August19,2011

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