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All employees required to work beyond eight hours in one workday is entitled to overtime
pay. The basis of overtime pay is found in Article 87 of the Labor Code.
Article 87. Overtime work. Work may be performed beyond eight 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 thereof. Work performed beyond eight hours
on a holiday or rest day shall be paid an additional compensation equivalent to the rate for
the first eight hours on a holiday or rest day plus at least 30 percent thereof.
Terminology.
Overtime Pay.
Overtime pay is the additional compensation payable to employee for services or work
rendered beyond the normal eight hours of work. It is computed by multiplying the overtime
rate with the number of hours in excess of the regular eight hours of work.
Overtime Work.
Any work performed beyond the normal 8 hours of work in one workday is considered as
overtime work.
Workday.
A workday is the consecutive 24-hour period which commences from the time the employee
starts to work and ends at the same time the following day. To illustrate, if the employee
regularly works from 8AM to 4PM, hisregular workday is the 24-hour period from 8AM to 8AM
of the following day. Workdays do not necessarily corresponds to calendar days.
Overtime Pay Rates.
Overtime pay rates depend upon the day the work is performed, whether it is ordinary
working day, special day, holiday or rest day.
For ordinary working day, an additional compensation equivalent to his regular hourly rate
plus at least 25% thereof.
For holiday, special day and rest day, an additional compensation equivalent to the rate for
the first eight hours on a holiday or rest day plus at least 30% thereof.
Computation of Overtime Pay
Assuming that the mininum wage rate is P250, how much is the overtime rate per hour?
On ordinary day
On an ordinary day, the overtime rate per hour is determined as follows:
First, compute the hourly rate of the employee:
Regular hourly rate = Minumum wage rate 8 hours
= P250 8 hours
= P31.25 per hour
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