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LABOR STANDARDS
PREPARED BY: ATTY CYRUZ GENEREY G. ASIDOY CPA, REB, REA
Control test
The control test assumes primacy in the overall consideration. There is an Er-Ee
relationship when the person for whom the services are performed reserves the right
to control not only the end achieved but also the manner and means used to achieve
that end
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HOURS OF WORK
COVERAGE/EXCLUSIONS
Title I, Book III of the Labor Code dealing with hours of work, weekly rest periods, holidays, service
incentive leaves and service charges, covers all employees in all establishments, whether for profit
or not.
Exception:
1. Government employees
2. Field personnel
3. Managerial employees
4. Officers and members of the managerial staff
5. Members of the family of the employer who are dependent on him for support
6. Workers paid by results
7. Persons in the personal service of another; and
8. Domestic helpers
The aforementioned employees are not entitled to overtime pay, premium pay for rest days and
holidays, night shift differential pay, holiday pay, service incentive leave and service charges.
GOVERNMENT EMPLOYEES
The terms and conditions of their employment are governed by the Civil Service Law.
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MANAGERIAL EMPLOYEES
a. Their primary duty consists of the management of the establishment in which they
are employed or of a department or sub-division thereof.
b. They customarily and regularly direct the work of two or more employees therein.
c. They have the authority to hire or fire employees of lower rank; or their suggestions
and recommendations as to hiring and firing and as to the promotion or any other
change of status of other employees, are given particular weight.
Officers and members of a managerial staff are considered managerial employees for they
customarily and regularly exercise discretion and independent judgment, that is, their powers are
not subject to evaluation, review and final action by the department heads and other higher
executives of the company
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FIELD PERSONNEL
Field personnel refers to non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of the employer
and whose actual hours of work in the field cannot be determined with reasonable
certainty.
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GR:
a. Travel that requires an overnight stay on the part of the employee when it cuts
across the employees workday is clearly working time.
b. The time is not only hours worked on regular workdays but also during
corresponding working hours on non-working days. Outside of these regular working
hours, travel away from home is not considered working time.
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COMPRESSED WORKWEEK
It is a scheme where the normal workweek is reduced to less than 6 days but the total
number of work-hours of 48 hours per week shall remain. The normal workday is
increased to more than 8 hours but not to exceed 12 hours, without corresponding
overtime premium
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MEAL BREAK
Every employer shall give his employees not less than 60 minutes or 1 hour time-off
for regular meals.
Non- compensability of the meal period
It is not compensable during a time-off. Employee must be completely relieved from
duty.
When meal period is compensable
It is compensable where the lunch period or meal time:
1. Is predominantly spent for the Employer’s benefit; or
2. Where it is less than 20 min. It will be considered only as a coffee break.
WAITING TIME
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Overtime work
Service rendered in excess of and in addition to eight hours on ordinary working days, which
are the prescribed daily work period, is overtime work.
Overtime pay
Any employee who is permitted or required to work beyond eight hours on ordinary working
days shall be paid an additional compensation for the overtime work in an amount equivalent
to his regular wage plus at least 25% thereof. It is the amount obtained by multiplying the
overtime hourly rate by the number of hours worked in excess of eight hours.
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It will exempt him from paying additional pay for overtime work. It has been held the
proper remedy should be to deduct under time or absences against the employee's
accrued leave but pay him the overtime to which he is rightfully entitled
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XPNs:
1. When the alleged waiver of overtime pay is in consideration of benefits and
privileges which may be more than what will accrue to them in overtime pay, the
waiver may be permitted.
2. Compressed workweek
•An employee shall be paid night shift differential of no 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.
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PART-TIME WORK
It is a contract whereby the contractor binds himself to execute a piece of work for
the Er, in price or consideration of a certain compensation. The contractor may
employ his labor, skill or also furnish the material.
NOTE: All workers paid on piece-work shall be entitled to receive not less than the
prescribed daily minimum wage or a proportion thereof for working less than 8
hours.
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WAGES
It is the remuneration or earnings, however designated, capable of being expressed
in terms of money, whether fixed or ascertained on a time, task, piece, or commission
basis, or other method of calculating the same, payable by an Employer to an
Employee under a written or unwritten contract of employment:
1. For work done or to be done, or for services rendered or to be rendered; and
includes
2. Fair and reasonable value of board, lodging, or other facilities customarily
furnished by the Employer to the Employee as determined by SLE.
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XPNs: The laborer was able, willing and ready to work but was:
1. Prevented by management;
2. Illegally locked out;
3. Illegally suspended;
4. Illegally dismissed
5. Illegally prevented from working
BONUS
Refers to the payment in excess of regular or guaranteed wages. It is granted to an employee
for his tangible contribution to the success of the employer’s business, without which the
employer may not realize bigger profits.
GR: The payment of bonus is a management function, not a demandable and enforceable
obligation, which cannot be enforced upon the employer who may not be obliged to assume
the onerous burden of granting bonuses or other benefits aside from the employee’s basic
salaries or wages.
XPN: Bonuses can be demanded as a matter of right if:
a. given without any condition; hence, part of the wage or
b. grant thereof is a result of an agreement such as the
c. given on account of company policy or practice
d. grant is mandated by law
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PAYMENT OF WAGES
The laborer’s wages shall be paid in legal currency.
No employer shall pay the wages of an employee by means of promissory notes, vouchers,
coupons, tokens, tickets, chits, or any object other than legal tender, even when expressly
requested by the employee
Payee
Wages shall be paid directly to the workers to whom they are due.
XPN:
1. Force majeure which renders the payment impossible
2. Special Circumstances determined by the SLE
3. Where worker died, the Er may pay the wages to the heirs without the necessity of intestate
proceedings. Heirs shall:
a. Execute affidavit attesting their relationship to the deceased and the fact that they are his
heirs
b. If minor, affidavit shall be executed on his behalf by his guardian or next-of-kin
TIME OF PAYMENT
Wages shall be paid atleast once every two
(2) weeks or twice a month at intervals not exceeding (16) days.
MINIMUM WAGE
Statutory minimum wage is the lowest wage rate fixed by law that an Er can pay his
workers.
The minimum wage fixed by law is mandatory; thus it is non-waivable and non-
negotiable. The enactment is compulsory in nature in order to ensure decent living
conditions
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APPRENTICES/LEARNERS/PERSONS WITH
DISABILITY
Minimum wage applicable
The wage or salary rate shall not be less than 75% of the applicable minimum wage.
NON-DIMINUTION OF BENEFITS
GR: Benefits being given to Employees cannot be taken back or reduced unilaterally
by the Er because the benefit has become part of the employment contract, whether
written or unwritten.
XPN:
1. When diminution of benefits is done to correct an error.
2. If the benefit being claimed is a contingent or conditional benefit, whose demand
ability depends on a certain pre-conditions.
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FACILITIES VS SUPPLEMENTS
The term "wage" includes the fair and reasonable value of facilities customarily
furnished by the employer to an employee. Facilities have been defined to include
those articles or services of benefit to the employee and his family such as rice ration,
housing, recreational facilities, medical treatment to dependents, school facilities, cost
of light, water, fuel, meals or snacks.
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WAGE DISTORTION/RECTIFICATION
A situation where an increase in wage results in the elimination or severe contraction
of intentional quantitative differences in wage or salary rates between and among-
the Employee-groups in an establishment as to effectively obliterate the distinctions
embodied in such wage structure based on skills, length of service or other logical
bases of differentiation
Elements of Wage Distortion
1. An existing hierarchy of positions with corresponding salary rates.
2. A significant change or increase in the salary rate of a lower pay class without a
corresponding increase in the salary rate of a higher one;
3. The elimination of the distinction between the 2 groups or classes; and
4. The WD exists in the same region of the country
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REST PERIODS
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XPNs:
1. Government Employees and any of its political subdivisions, including GOCCs (with original
charter)
2. Retail and service establishments regularly employing less than 10 workers
3. Domestic helpers and persons in the personal service of another
4. Employee engaged on task or contract basis or purely commission basis
5. Members of the Family of the Employer who are dependent on him for support
6. Managerial Employee and other members of the managerial staff
7. Field personnel and other Employee whose time and performance are unsupervised by the
Employer
8. Employee paid fixed amount for performing work irrespective of the time consumed in the
performance thereof .
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CONCEPT OF ABSENCES
Effects of absences on holiday pay; successive regular holiday
a. If an employee is on leave of absence with pay, he is entitled to holiday pay
b. If an employee is on leave of absence without pay on the day immediately
preceding the regular holiday, he is not entitled to holiday pay.
c. If the day immediately preceding the holiday is a non-working day or the
scheduled rest day of an employee, he is not considered to be on leave of absence
on that day, in which case he shall be entitled to holiday pay if the employee should
work on the day immediately preceding the non-working day or rest day.
d. If there are two successive regular holidays like Holy Thursday and Good Friday,
an employee is not entitled to holiday pay for both holidays if he absents himself
from work without pay on the day immediately preceding the first regular holiday.
But if he works on the first holiday, he is entitled to holiday pay on the second holiday
LEAVE
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XPNs:
1. Government Employees and any of its political subdivisions including GOCCs
2. Those already enjoying the benefit
3. Domestic helpers and persons in the personal services of another
4. Those already enjoying vacation leave with pay of at least 5 days
5. Managerial Employees
6. Field personnel and other Employees whose performance is unsupervised by the
Employer
7. Employed in establishments regularly employing less than 10 workers
8. Exempt establishments
9. Engaged with a task or contract basis, purely commission basis, or those who are
paid in a fixed amount of performing work irrespective of the time consumed in the
performance thereof
SERVICE CHARGES
These are charges collected by hotels, restaurants and similar establishments. The
entire service charges must be distributed among the covered employees
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LEAVE
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