If you are running a business in the Philippines, you must know the policies regarding overtime pay computation, or shift differentials.Knowing the level of compensation your employees should receive if they work the extra hours on regular workdays and holidays helps you establish a reputable image for your business. Night shift differential is from 10pm to 6am the following day. Deduction of undertime must be based on the employee’s tardiness and salary. An employee is entitled to night pay for those hours that must be worked between 6 p.m. and 6 a.m. to complete an 8-hour daily tour of duty. 87. On an ordinary day, the overtime rate per hour is determined as follows: Weekends–Saturday and Sunday–are usually allotted as rest days. Further, the daily hours’ limit in the Labour Code does not apply to government employees, managerial employees, field personnel, employer’s family members, domestic helpers, and personal service providers. How many hours are allowed for overtime work?Employees can render up to eight (8) hours of overtime work. Women and young persons are prohibited from night work. Source: §82, 83, 84, 87, 88 and 89 of the Labour Code, as amended; §12A of the Special Protection of Children against Child Abuse, Exploitation and Discrimination Act; Department Advisory No. 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 ten o'çlock in the evening and six o'clock in the morning. The working hours for kasambhay (domestic helpers) are 10 hours a day, exclusive of one hour breaks for each regular meal of the day. – 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 ten oclock in the evening and six oclock in the morning. Monthly rate: Php10,000Daily rate (20 working days/month): 10,000/20= Php500Hourly rate (8 hours): 500/8= Php 62.50, 110% x number of hours in excess of 8 hours (130% x hourly rate)Night shift overtime hourly rate: 1.1 x (1.30 x 112.5)= Php 89.375/hour. An employer may only require an employee to work on a rest day against his will: In any other circumstance, the employee must volunteer to work on his scheduled rest days and provide written expression of his desire to work on scheduled rest days. 4 Simple Charts to explain Philippines Premium Pay Rate FIND OUT THE OVERTIME PAY RATE, NIGHT SHIFT DIFFERENTIAL PAY RATE, REST DAY PAY RATE AND HOLIDAY PAY RATE. Under certain conditions and circumstances, however, employers may require overtime work: Can an employee offset his or her filed undertime with overtime work?The undertime cannot be offset with overtime. Shift differentials aren’t required by federal law, but many companies, especially in the manufacturing industry, offer them as a way of encouraging employees to take an “undesirable” shift such as the night shift or a weekend shift. Overtime Pay and Night Shift Differential in the Philippines. Overtime pay, on the other hand, is additional pay for work performed beyond 8 hours in a day. Is this in compliance with the FLSA overtime standard? N ight Shift Differential (NSD) refers to the additional compensation of ten percent (10%) of an employee’s regular wage for each hour of work performed between 10 p.m. and 6 a.m. Generally, all employees are entitled to night shift differentials, except the following: How to Compute Overtime Pay All employees required to work beyond the normal 8 hours are entitled to overtime. Overtime is beyond 8 hours in a single workday, except in flexible work arrangements such as compressed work week. Rest periods of short duration during working hours are regarded as hours worked. Can employers/business owners require their employees to render overtime work?The law does not encourage employers/business owners to ask their employees to do overtime work. Notably, the MWE’s earnings from overtime, night shift differential, and hazard pay are not anymore exempt. Every employee shall be paid a night shift premium of not less than 10% of their regular wage for each hour of work performed between 10:00 PM and 6:00 AM. However, kasambahay under the age of 18 years are not allowed to work more than 8 hours a day, 5 days a week, exclusive of 1 hour breaks for each regular meal of the day. The maximum working hours on such days cannot exceed 12 hours per day. Moreover, under time work on a day cannot be offset by overtime work on another day. Employees extending their work hours during in the night shift will be given an additional 25% as his overtime rate with their regular hourly rate, plus ten percent 10% for every hour of working between the covered period. Retail and services 4. Most businesses will outline how shift differentials work, if they’re offered, in the employee handbook.Usually, however, differential Cottage and handicraft For example, on average, the minimum daily payroll in the Phili… 86. Ordinary day Overtime. Powered by the WageIndicator Foundation - Share and compare wages, understand Labour Laws and spot career opportunities. These rates are set by the Wage Rationalization Act, Republic Act No. Mywage.org/Philippines is connected to the WageIndicator Network. 6727, and vary depending on the sales of the company as well as the number of employees. 86. Regular holidays, such as Labor Day and Independence Day, tend to have fixed dates and are present ye… Basic Labor Code of the Philippines - Night Shift Differential (NSD) Night Shift Differential For work performed from 10:00 p.m. to 6:00 a.m. the following day, the employee is entitled to a night shift differential pay of not less than 10% of his regular wage for each hour of work rendered. Employees who work between 10:00 PM and 6:00 AM are entitled to night shift differential. The list includes managers, field personnel, domestic helpers, workers who are hired for personal service of another, members of the employer's family who depend on employees for support, and workers whose compensation is results-based. If you find this site useful and want to show your support, feel free to … Can an employee demand overtime work from the employer?The employee cannot urge or oblige the employer to let him or her to render overtime work if it is not required by the circumstance or there is no extra work to be done. What is the overtime pay computation for employees working on a night shift during a rest day? An employee shall be paid night shift differential of no less than ten percent (10%) of his regular wage for each hour of … Is it a rest day, a regular holiday, or a special non-working day? Read also: Can Employees Be Compelled To Render Overtime Work? Article 86 of Philippine Labor Code states, “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 ten o’clock in the evening and six o’clock in the morning.” 22009 Guidelines on the Adoption of Flexible Work Arrangements Part III, point 1. In line with that, you should pay for their rendered service in … Art. 87. The Trade Union Congress of the Philippines (TUCP) has thrown its support behind two House bills seeking to exclude from income taxes all overtime and graveyard shift differential pay received by salaried employees, including the country’s 1.1 million business process outsourcing (BPO) workers who perform jobs all day and all night. Art. Employees who work between the hours of 10 p.m. to 6 a.m. are entitled to night shift differential pay also known as Night Shift Pay to compensate them for the hazards and inconvenience of working at odd hours when the body is normally asleep. Knowing the level of compensation your employees should receive if they work the extra hours on regular workdays and, helps you establish a reputable image for your business. No. Art. Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am; To determine the employee Night Differential pay: Special Holiday Rest day Night Differential = (Hourly … However, the following employees are NOT entitled to … One of the reasons is the night shift differential pay. Night Shift Differential in the Philippines WHAT IS NIGHT SHIFT DIFFERENTIAL Article 86 of our labor provides that 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 ten o’clock in … The undertime can be deducted through his or her wage or through other means. Source: §86 of the Labour Code, as amended. The worker should be paid overtime pay, equivalent to 125% of his usual rate per hour. Women and young persons are prohibited from night work. The employer cannot use the offset to keep the company from compensating the employee with required overtime rates. Under R.A. 9504 overtime pay, night shift differential pay and hazard pay received by such minimum wage earners are exempt from income tax (Section 2, R.A. 9504). *same monthly rate applied in the computation, special day: 110% x (130% x basic pay)10,000 x 1.3 = Php 13,000Special day premium pay, night shift: (i.e., 20 working days/month): 1.1 x (13,000/20)= Php 715/day, Special day that coincided on a scheduled rest day: 110% x (150% x basic pay)10,000 x 1.5 = Php 15,000Special and rest day premium pay (i.e., 20 working days/a month): 1.1 x (15,000/20)= Php 825/day, What is the overtime pay computation for employees working on a night shift during a regular holiday? Under R.A. 9504 overtime pay, night shift differential pay and hazard pay received by such minimum wage earners are exempt from income tax (Section 2, R.A. 9504). However, not all employees are entitled to night shift differential. OVERTIME PAY • An employee is entitled to overtime pay for each hour of work done beyond normal working hours • The overtime rate on normal day is 25% • The overtime rate on rest day and holiday is 30%. Knowing the level of compensation your employees should receive if they work the extra hours on regular workdays and holidays helps you establish a reputable image for your business. ..- - When the schedule of working hours fall; partly within 6:00 PM to 6:00 AM, the night-shift differential pay shall be paid only for the hours within 6:00 PM to 6:00 AM of the following day.- DEPARTMENT OF LABOR AND EMPLOYMENT. However, suppose the employee also earns a shift differential for working weekends or the night shift, or a performance bonus, or a commission. Labour Code (Presidential decree No. Overtime work. Where an employee is made or permitted to work on his scheduled rest day or a special day, he is paid an additional compensation of at least 30% of his regular wage (130% of the normal wage rate). Article 86 - Night shift differential; Article 87 - Overtime work; Article 88 - Undertime not offset by overtime; Article 89 - Emergency overtime work; Article 90 - Computation of additional compensation; Article 91 - Right to weekly rest period; Article 92 - When employer may require work on a rest day; If work is performed on a rest day which is also a special day, worker is paid 150% of the normal wage rate. Working hours in the Philippines cannot exceed eight hours in a day, not including the mandatory one-hour lunch break. Under Philippine labor laws, an employee who works between 10 p.m to 6:00 a.m. should be paid a night shift differential of not less than ten percent (10%) of his regular wage. Calculating for your employees’ overtime, holiday, rest day, and/or night differential premiums is not a walk in the park. However, suppose the employee also earns a shift differential for working weekends or the night shift, or a performance bonus, or a commission. Agricultural 3. What is the overtime pay computation for employees working on a night shift during a rest day? In line with that, you should, If the country is at war or declared to be under national or local emergency, If overtime work can help save lives or properties in face of danger to public safety due to emergencies caused by fire, natural disasters, or serious accidents, If work started before the 8th hour needs to be completed or continued to avoid grave obstruction or to prevent prejudice to the business or operations, If overtime work is needed to achieve good weather or environmental conditions and the quality of work and performance depend on these conditions, If urgent work needs to be done on equipment, installations, and machinery to avoid loss or damage, If work is required to preserve perishable goods or prevent its loss. For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. This website does not show any ads or advertising materials for an ad-free reading experience of the readers. Source: Article 86, Labor Code of the Philippines The employee will be paid according to the hours of work or rendered service. If your employee works beyond eight hours, you must pay overtime wages. If work is performed on a rest day which is also regular holiday, worker is paid 260% of the normal wage rate. Night-shift differential pay may be granted to government personnel at a rate not exceeding 20% of the hourly basic rate of the employee.-- uno. NIGHT SHIFT DIFFERENTIAL . The main question you have to ask is: what kind of non-working day is this? If you are running a business in the Philippines, you must know the policies regarding overtime pay computation, or shift differentials. Industry sectors are segmented as follows: 1. When working overtime, RNs are paid time-and-one-half of their basic hourly rate of $22. Art. 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 ten o’clock in the evening and six o’clock in the morning. 2. Overtime Work Work may be performed beyond eight hours a day provided that the employee is paid for the overtime work, which consists of an additional compensation equivalent to his regular wage plus at least 25% thereof. Regional Office No. The Law does not provide a limit on overtime work. In line with that, you should pay for their rendered service in accordance with the labor codes. 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 ten o’clock in the evening and six o’clock in the morning. For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. Overtime work may cause unnecessary stress to workers, making it difficult for them to achieve and maintain work-life balance. Overtime pay rates are covered under the Labour Code. The Department of Labor and Employment has published advisory guidelines on the adoption of flexible work arrangements which includes compressed workweeks among a range of flexible arrangements which employers may consider implementing in times of economic difficulty or national emergency. Category My PayrollHero Account, Payroll, Philippine Payroll Regulations and Information Every employee is entitled to a Night Differential or Night shift pay of not less than 10% of his regular wage for each hour of work performed between 10pm and 6am. Overtime pay rates depend upon the the day the work is performed, whether it is ordinary working day, special day, regular holiday or rest day. “This is pursuant to our existing policy to recognize voluntary work arrangements between companies and their employees that is mutually beneficial and does not diminish existing standards and benefits such as overtime pay premium and night shift differential,” Labor Secretary Silvestre H. Bello III said. *same monthly rate applied in the computation, Regular holiday (200% x basic pay)10,000 x 2 = Php 20,000Holiday pay (i.e., 20 working days/month): 1.1 x (20,000/20) = Php 1,100/day, Regular holiday that coincided on a scheduled rest day (260% x basic pay)10,000 x 2.6 = Php 26,000Premium pay (i.e., 20 working days/a month): 1.1 x (26,000/20) = Php 1,430/day, How a PEZA-Accreditation Can Benefit Your Business, 15-Minute Team Building Activities You Can Apply in the Workplace, The Pros and Cons of Working in a Call Center in Manila, Overtime Pay Computations And Policies In The Philippines, , you must know the policies regarding overtime pay computation, or, . (When an employee is required to work beyond the normal 8 hours, they are entitled to receive Overtime Pay) If the employee’s overtime reaches overnight or the night differential time frame, the night differential would affect the overtime rate of the employee. Employees working anytime from 10 o’clock in the evening to 6 o’clock in the morning qualifies for the Night Shift Differential (NSD). Gross salary is how much the employee earned, including overtime, night shift differential and other additional compensation, based on actual number hours of work. Night shift differential. Night shift overtime hourly rate: 1.1 x (1.30 x 112.5)= Php 89.375/hour. *same monthly rate applied in the computationRegular holiday: (200% x basic pay)18,000 x 2 = Php36,000Holiday pay (i.e., 20 working days/month): 36,000/20 = Php1,800/day, Regular holiday that coincided on a scheduled rest day: (260% x basic pay)18,000 x 2.6 = Php46,800Premium pay (i.e., 20 working days/month): 46,800/20= Php 2,340/day. The amount of 13 th month pay shall at least be 1/12 of the total basic salary earned for the year which shall n include all earnings paid by his/her employer for services rendered but does not include allowances and other monetary benefits such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night shift differential, holiday pay and COLA. This extra pay needs to be added into the Regular Rate to make the overtime rate bigger. *same values used in the computation, First 8 hours = 130%; beyond 8 hours = 169% /hourFirst 8 hours: ((18,000 x 12) / 258) x 1.3 = Php1,088.37Beyond 8 hours: [((18,000 x 12) / 258) x 1.69]/8 = Php176.86/hour, What is the computation for overtime pay on a special day? Since differential pay is company policy, not something regulated by the government, there’s no standard way to pay it. *same monthly rate applied in the computation, Special day: (130% x basic pay)18,000 x 1.3 = Php23,400Special day premium pay: (i.e., 20 working days/month): 23,400/20=Php 1,170/day, Special day that coincided with a scheduled rest day: (150% x basic pay)18,000 x 1.5 = Php 27,000Special and rest day premium pay (i.e., 20 working days/month): 27,000/20= Php 1,350/day, What is the computation for overtime pay on a regular holiday? The normal hours of work of any employee cannot exceed eight (8) hours a day. When they work the night shift they are paid a shift differential of $2 an hour. Will be adjusted accordingly favorable weather or environmental conditions where performance or quality work. Rns are paid a shift differential for the excess hours worked understand Labour Laws and spot opportunities. 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