Is Your Company Compliant With Philippine Labor Law?

by | Jul 28, 2021

4 - MINUTE READ

The Labor Code of the Philippines stands as the law governing employment practices and labor relations in the Philippines. This is to help protect employees and employers while ensuring that neither is subject to unfair treatment or exploitation.

The Labor Code contains several provisions which are beneficial to labor. Below are sets of rules that make up the Labor Code:

Working Hours in the Philippines

No employee in the Philippines must work for over 8 hours a day. Employees entitled to a 1-hour lunch break daily, without fail. However, a worker is only required to work for a maximum of 8 hours per day from the office. There are no laws that mandate employees to render working hours from home. Working hours include the time during which the employer requires to be at the workplace. All hours that the employee is asked to work, and the breaks in between to avoid burnout.

Employees Exempt from Completing Working Hours

Article 82 of the Labor Code of the Philippines states that employees under all establishments and undertakings need to complete a certain set of working hours, except:

  • Government employees
  • Managerial employees
  • Field personnel
  • Family members of the employer who are dependent for support
  • Domestic help
  • Individuals who provide personal service to others
  • Workers given wages/salary based on the Secretary of Labor regulations
Meal Times

The Labor Code dictates that all employers must get no less than a 60-minutes break to finish their meals. The usual time during day shifts is 12:00 PM.

Night Shift

The employee must pay in case an employer requires a worker to work during the night. The employee must pay a minimum of 10% over and above the regular wage for each hour.

Rules for Overtime Work

The Maximum work hours are 8 hours in the Philippines. If the employee works longer, the employer is mandated to pay extra. This includes additional compensation of 25% of his regular work wage. The employer is liable to pay an additional compensation equivalent to the average 8-hour pay. This includes 30% more if the employer asked the employee to work beyond 8-hours on a holiday or rest day.

Working on a rest day may require in case of an emergency, urgent work, loss to the business, or as determined by the Secretary of Labor and Equipment. It is essential to note that an employee can ask to perform overtime work in national or local emergency cases determined by the state, or if the business is at stake.

Rules for Under-time Work

According to Article 88 of the Labor Code of the Philippines, under-time work on a business day will not influence overtime work on any given day. This means that if an employee leaves work early. The employer cannot oblige the employee made to work overtime the next day to make up for those hours. This is because the rate of overtime per hour is higher than the missed hours. The Labor Code also states that in case an employee receives permission to take leave on a specific day. The employer is still required to pay for any additional compensation or overtime work done previously or in the future.

Leaves

All employers are subject to a weekly rest day of a full 24-hours after every 6 consecutive working days. The specific rest day can be mutually decided. However, an employee can argue. The case is if the employee prefers to give a rest day based on a religious event or holiday. All workers deserve the right to holiday pay. This will include his regular daily wage. In case they are called into work on a holiday, they must pay twice their regular rate. If an employee has worked for a minimum of one year for his company, he must be offering a yearly service incentive leave of five days with regular pay.

Nowadays, conformity to the Labor Code of the Philippines is getting to be more relevant than it ever was. With more employees reaching their boiling point and the government chasing down erring employers. The time to be compliant is now, and here are the reasons why:

Penalty, Fines, and/or Imprisonment

Depending on which government department the Philippine labor code violation is applicable to, the penalty amount or punishment may vary. For the Social Security System of the Philippines, the violation may lead to the seizure of personal estates, bank accounts, and others. In the worst-case scenario, employers may even face imprisonment for not paying the withholding taxes of their employees properly.

High Employee Attrition Rate

More so with Millennials and Gen Z’ers. Employees who were subject to unfair treatment and wages are not afraid to leave and find work elsewhere. With more job opportunities currently opening, bouncing to another employer is easier than it was before. Having a big number of employees leaving is not only costly. It also damages the morale of the remaining employees and the reputation of the company.

Promote Malpractices for the Next Generation

There is a high chance that it will carry over to the next generation, and possibly the generation after them, for every activity that is deem “normal” or accepted by this generation. The more wicked consequence that comes out of this is that each wrongful act makes room for more wrongful activities to propagate, much like the quote “evil begets evil.”

When it comes to abiding by the employment laws of the Philippines, being proactive is a better choice. Not only would it be fair for employees, but it also encourages the success of the business. 

The sad truth is, plenty of companies are more reactive than proactive in complying with the local labor laws. Meaning, many would only take action to properly adhere to the regulation. When the spotlight of the authorities is on them, and not anytime before. While many employers purposely neglect the law to swindle their employees out of their hard-earned wages. There are those who simply do not know that they are non-compliant with the local labor laws.

Whether the employers know that they are abiding by the local labor code or not, it is the responsibility and moral duty of each company to understand and adhere to the Philippine regulations, which are to promote fair labor practices. While adhering to the different aspects of the Philippine labor code could get complicated. Being compliant on the part that affects the company’s payroll doesn’t have to be.

Also read the article The Philippine Data Privacy Act (Republic Act 10173): What You Need To Know?

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