13th MONTH PAY(P.D. 851)

Coverage

All employers are required to pay their rank-and-file employees regardless of the nature of their employment and irrespective of the method by which their wages are paid provided they worked for at least one (1) month during a calendar year. 13th month pay should be given to the employees not later than December 24 of every year.

Who are Rank-and-File Employees

The Labor Code distinguishes a rank-and-file employee from a managerial employee.

It provides that a managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions.

All employees not falling within this definition are considered rank-and-file employees.

The above distinction shall be used as guide for determining who are rank-and-file employees entitled to the mandated 13th month pay.

Minimum Amount

The minimum 13th month pay required by law shall not be less than 1/12 of the total basic salary earned by an employee within a calendar year.

The “basic salary” of an employee for the purpose of computing the 13 th month pay shall include all remuneration or earnings paid by his employer for services rendered. It does not include allowances and monetary benefits, which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night differential and holiday pay, and cost-of-living allowances. However, these salary related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees.

Exempted Employers

The following employers are not covered by P.D. 851

a. The government and any of its political subdivision, including government-owned and controlled corporation, except those corporations operating essentially as private subsidiaries of the government;

b. Employers already paying their employees a 13 th month pay or more in a calendar year or its equivalent at the time of issuance of P.D. 851;

c. Employers of household helpers and persons in the personal service of another in relation to such workers;

d. Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece rate basis in which case the employer shall grant the required 13th month pay to such workers.

As used herein, workers paid on piece-rate shall refer to those who are paid a standard amount for every piece or unit of work performed that is more or less regularly replicated, without regard to the time spent in producing the same.

The term “its equivalent” as used in paragraph (b) hereof shall include Christmas bonus, mid-year bonus, cash bonuses and other payments amounting to not less that 1/12 of the basic salary but shall not include cash and stock dividends, cost-of-living allowances and all other allowances regularly enjoyed by the employee, as well as non-monetary benefits.

Time of Payment of 13th Month Pay

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The required 13th month pay shall be paid not later than December 24 of each year. An employer, however, may give to his employees one half (1/2) of the required 13 th month pay before the opening of the regular school year and the other half on or before the 24 th of December of every year. The frequency of payment of this monetary benefit may be the subject of agreement between the employer and the recognized/collective bargaining agent of the employees.

13th Month Pay for Certain Types of Employees

a. Employees who are paid on piecework basis are by law entitled to the 13th month pay.

b. Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay, based on their earnings during the calendar year, i.e., on both their fixed or guaranteed wage and commission.

(In the consolidated cases of Boie Takeda Chemicals Inc. vs. Dela Serna, GR No. 92174, and Phil. Fuji Xerox Corp. vs. Trajano, GR No. 102552, March 24, 1994, the Supreme Court ruled that commissions, while included in the generic term wage, are not part of “basic salary/wage” and therefore should not be included in computing 13th month pay, to wit:

“In remuneration schemes consisting of a fixed or guaranteed wage plus commission, the fixed or guaranteed wage is patently the “basic salary” for this is what the employee receives for a standard work period. Commissions are given for extra efforts exerted in consummating sales or other related transactions. They are, as such, additional pay which this Court has made clear do not form part of the basic wage”

c. Employees with multiple employers.

Government employees working part time in a private enterprises, including private educational institutions, as well as employees working in two or more private firms, whether on full or part-time basis, are entitled to the required 13 th month pay from all their private employers regardless of their total earnings from each of all employers.

13th Month Pay of Resigned or Separated Employee

An employee who has resigned or whose services are terminated at any time before the time of payment of the 13th month pay is entitled to his monetary benefit in proportion to the length of time he worked during the year reckoned from the time he started working during the calendar year up to the time of his resignation or termination from the service.

Thus, if he worked only from January up to September, his proportionate 13 th month pay should be equivalent to 1/12 of his total basic salary earned during that period.

Non-Inclusion in Regular Wage

The mandated 13th month pay need not be credited as part of regular wage of employees for purposes of determining overtime and premium payments, fringe benefits as well as contributions

to the State Insurance Fund, Social Security, Medicare and private retirement plans.

HOLIDAY PAY(Article 94)

Coverage: This benefit shall apply to all employees, except:

a) Those of the government and any of the political subdivisions, including government-owned and controlled corporations.

b) Those of retail and service establishments regularly employing less than ten (10) workers

c) Domestic helpers and person in the personal service of another

d) Managerial employees; and

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e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

REGULAR HOLIDAYS

Every employee covered by the Holiday Pay Rule is entitled to his daily basic wage for any unworked regular holiday. This means that the employee is entitled to at least 100% of his basic wage even if he did not report for work, provided he is present or is on leave of absence with pay on the work day immediately preceding the holiday.

Work performed on that day merits at least twice (200%) the basic wage of the employee.

Where the holiday falls on the scheduled rest day of the employee, work performed on said day merits at least an additional 30% of the employee’s regular holiday rate of 200% or a total of, at least, 260%.

ILLUSTRATION: Using the NCR minimum wage rate of Php223.50 per day for the non-agricultural sector effective October 31, 1999.

For work within 8 hours:

Plus 100% of the daily basic rate of 100% or a total of 200%Php223.50 + 100% thereof = Php223.50 + Php223.50 = Php447.00or

200% of Php223.50 = 2.00 x Php223.50 = Php447.00

Where the holiday falls on the scheduled rest day of the employee, work performed on said day merits at least an additional 30% of the employee’s regular holiday rate of 200% or at least 260%.

R.A . No. 9177 November 13, 2002 lists of eleven (11) regular holidays and two (2) special days:

REGULAR HOLIDAYSNew Year's Day - January 1Maundy Thursday - Movable DateGood Friday - Movable DateEidul Fitr - Movable DateAraw ng Kagitingan(Bataan and Corregidor Day) - April 9Labor Day - May 1Independence Day - June 12National Heroes Day - Last Sunday of AugustBonifacio Day - November 30Christmas Day - December 25Rizal Day - December 30

NATIONWIDE SPECIAL HOLIDAYSAll Saints Day - November 1Last Day of the Year - December 31

[NOTE: Eidul Fitr is the first day marking the end of the thirty (30)-day fasting period of Ramadhan]

During special days, the principle of “NO WORK, NO PAY” applies, and on such other special days as may be proclaimed as such by the President or Congress.

Workers who were not required or permitted to work on those days are not by law entitled to any compensation. This however, is without prejudice to any voluntary practice or provision in the Collective Bargaining Agreement (CBA) providing for payment of wages and other benefits for days declared as special days even if unworked.

Upon the other hand, work performed on special days merits additional compensation of not less than 30% on top of the basic pay, or a total of 130% and at least 50% over and above the basic

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pay or a total of 150% if the worker is permitted or suffered to work on said day which may be his scheduled rest day.

Thus, for declared SPECIAL DAYS such as special non-working day, special public holiday, in addition to the two (2) nationwide special days (November 1, all Saints Day and December 31, Last Day of Year) , the following rules shall apply:

a. if unworkedno pay, unless there is a favorable company policy, practice or collective bargaining agreement (CBA) granting payment of wages on special days even if unworked

b. if worked1st eight (8) hours – plus 30% of the daily rate of 100%excess of eight (8) hours – plus 30% of hourly rate on said day

c. falling on the employee’s rest day and if worked1st eight (8) hours – plus 50% of the daily rate of 100%excess of eight (8) hours – plus 30% of hourly rate on said day

For those declared as SPECIAL WORKING HOLIDAYS, the following shall apply:

for work performed, an employee is entitled only to his basic rate. No premium pay is required since work performed on said days is considered work on ordinary working days.

ABSENCES

a) All covered employees shall be entitled to holiday pay when they are on leave of absence with pay. Employees who are on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if they have not worked on such regular holiday.

b) Employers shall grant the same percentage of the holiday pay as the benefit granted by competent authority in the form of employee’s compensation or social security payment whichever is higher, if they are not reporting for work while on such benefits.

c) Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day.

TEMPORARY OR PERIODIC SHUTDOWN/CESSATION OF WORK

In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with the Rules Implementing the Labor Code.

HOLIDAY PAY OF CERTAIN EMPLOYEES

a) Where the covered employee is paid on piece rate basis, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday; Provided, however, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate.

b) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work.

c) Workers who do not have regular working days, such as stevedores, shall be entitled to this benefit.

MINIMUM WAGE

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Republic Act 6727 (otherwise known as the Wage Rationalization Act) fixed the statutory minimum wages applicable to different industrial sectors, namely: non-agricultural, agricultural plantation and non-plantation, cottage/handicraft, retail and service, depending upon the number of workers or capitalization or annual gross sales in some sectors.

The Rules Implementing RA 6727 define the industrial sectors, as follows:

“Agriculture” refers to farming in all its branches and among others, includes to cultivation and tillage of the soil, production, cultivation, growing, and harvesting of any agricultural or horticultural commodities, dairying, raising of livestock or poultry, the culture of fish and other aquatic products in farms or ponds, and any activity performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, but does not include the manufacturing and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or other farm products.

“Plantation Agricultural Enterprise” is one engaged in agriculture with an area of more than 24 hectares in a locality or which employs at least 20 workers. Any other agricultural enterprise shall be considered as “Non-Plantation Agricultural Enterprise”

“Retail Establishment” is one principally engaged in the sale of service to individual for their own or household use and is generally recognized as such.

“Cottage/Handicraft Establishment” is one engaged in an economic endeavor in which the products are primarily done in the home or such other places for profit which requires manual dexterity and craftsmanship and whose capitalization does not exceed P500,000.00 regardless of previous registration with the defunct NACIDA.

The Act rationalized wage policy determination by establishing the mechanism and proper standards, through the creation of Regional Tripartite and Productivity Boards to determine the wage rates in the different regions based on established criteria.

Existing Regional Wage Orders prescribe the daily minimum basic wage rates per industry per locality within the region, in some instances depending upon the number of workers and the capitalization. The Wage Orders likewise provide the basis and procedure for exemption from compliance. Some Wage Orders grant allowances instead of wage increases.

Coverage:

The wage increase prescribed under Wage Orders apply to all private sectors and employees regardless of their position, designation or status, and irrespective of the method by which their wages are paid, except the following:

Household or domestic helpers, including family drivers and workers in the personal service of another; (their conditions of work are prescribed in R.A. No. 7655)

Workers and employees in the retail/service establishments regularly employing not more than 10 when specifically exempted from compliance for a period fixed by the Board.

Workers and employees of distressed establishments when exempted from compliance for a period fixed by the Board.

Workers and employees of other firms or employers as determined by the Board when exempted from compliance for a fixed point.

BASIS OF MINIMUM WAGE

The basis of the minimum wage rates prescribed by the law shall be the normal working hours of eight (8) hours a day

MONTHLY-PAID EMPLOYEES AS DISTINGUISHED FROM DAILY-PAID EMPLOYEES

Monthly-paid employees are those who are paid every day of the month, including unworked rest days, special days and regular holidays.

Daily-paid employees are those who are paid on the days they actually worked and on unworked regular holidays.

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MINIMUM WAGE OF WORKERS PAID BY RESULTS

All workers paid by results, including homeworkers and those who are paid on piecework, takay, pakyaw, or task basis, shall receive not less than the applicable statutory minimum wage rates prescribed under the Regional Wage Orders for normal working hours, or a portion thereof.

MINIMUM WAGE OF APPRENTICES, LEARNERS AND HANDICAPPED WORKERS

Wages of apprentices, learners and handicapped workers shall in no case be less than seventy five percent (75%) of the applicable statutory wage rates.

Apprentices and learners are those covered by apprentices/learnership agreements duly approved by DOLE.

A handicapped worker is one whose working capacity is impaired by his age, physical defect or mental deficiency or injury.

EFFECT OF REDUCTION OF WORKDAYS ON WAGES

In situations where the reduction in the number of regular working days is resorted to by the employer to prevent serious losses such as when there is substantial slump in the demand for his goods or services, or when there is lack of raw materials, the employer may deduct the wages corresponding to the days taken off from the workweek, consistent with the principle of “no work, no pay”. This is of course without prejudice to an agreement or policy, which provides otherwise.

NIGHT SHIFT DIFFERENTIAL(Article 86)

Definition: Night Shift Differential (NSD) is the additional compensation of ten percent (10%) of an employee’s regular wage for each hour of work performed between 10:00 PM and 6:00 AM.

Coverage: The provision of the Labor Code on NSD apply to all employees, except:

Government employees;Employees on retail and service establishments regularly employing not more

than 5 workers;Domestic helpers and persons in the personal service of another;Managerial employees;Field personnel and those whose time and performance are unsupervised by the

employer.

Where Night Shift (10PM to 6AM) Work is Regular Work

On an ordinary day:

Plus 10% of the basic hourly rate or a total of 110% of the basic hourly rate

On a rest day, special day or regular holiday:

Plus 10% of the regular hourly rate on a rest day, special day or regular holiday or a total of 110% of the regular hourly rate.

Where Night Shift (10PM to 6AM) Work is Overtime Work

On an ordinary day:

Plus 10% of the overtime hourly rate on an ordinary day or a total of 100% of the overtime hurly rate on an ordinary day

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On a rest day/special day/ a regular holiday:

Plus 10% of the overtime hourly rate on a rest day/special day/regular holiday.

Illustration: Using Php223.50 as basic daily rate and Php27.94 as basic hourly rate

a) For regular work in the night shift on an ordinary day:

Php223.50 + 10% of Php223.50 = Php223.50 + (.10 x Php223.50)=Php223.50 + Php22.75=Php245.85/day

or

100% of Php223.50 = 1.1 x Php223.50= Php245.85

b) For regular night shift work on a rest day, special day or regular holiday

b.1 For regular night shift work on a rest day

(130% of Php223.50) + 10% of (130% of Php223.50)= (1.3 x Php223.50) + .10 x (1.3 x Php223.50)= Php290.55 + Php29.05= Php319.60

or

110% of (130% of Php223.50)= 1.1 x (1.3 x Php223.50)= Php319.60

b.2 For regular night shift work falling on a special day or a regular holiday:

Since special days and regular holidays are calendar days (i.e., 24 hours period from 12 midnight to 12 midnight of the following day), the night shift is either cut-off or starts only at 12 MN. Hence, the night shift pay for such days may be determined by the hour on the basis of the hourly rate, not the daily rate.

b.2.1 On a special day

130% of Php27.94 + 10% of (130% of Php27.94)= (1.3 x Php27.94) + 10 x (1.3 x Php27.94)= Php36.32 + Php3.63= Php39.95

or

110% of (130% of Php27.94)= 1.1 x (1.3 x Php27.94)= Php39.95

b.2.2 On a regular holiday

200% of Php27.94 + 10% of (200% of Php27.94)= (2.0 x Php27.94) + .10 x (2.0 x Php27.94)= Php55.88 + Php5.59= Php61.47

or

110% of (200% of Php27.94)= 1.1 x (2.0 x Php27.94)= Php61.47

III For Overtime work in the Night Shift:

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Since overtime work is not usually 8 hours, the compensation for overtime night shift work is likewise computed on the basis of the hourly rate.

b.1 On an ordinary dayPlus 10% of 125% of basic hourly rate or a total of 110% of 125% of basic hourly rate

b.2 On a rest day/special day/regular holidayPlus 10% of 130% of regular hourly rate on said days or a total of 110% of 130% of the applicable regular hourly rate

Illustration: Using P27.94 as basic hourly rate.

b.1 For overtime night shift work falling n an ordinary day.

(125% of Php27.94) + 10% of (125% of Php27.94)= (1.25 x Php27.94) + .10 x (1.25 x Php27.94)= Php34.92 + Php3.49= Php38.41

or

110% of (125% of Php27.90)= 1.1 x (1.25 x Php34.92)= Php38.41

b.2 For overtime night shift work falling on rest day, special day or regular holiday

b.2.1 On a special day or rest day

130% (130% of Php27.94) + 10%(130% of 130% of Php27.94)= 1.3 x (1.3 x Php27.94) + .10 x (1.3 x 1.3 x Php27.94)= Php47.22 + Php4.72= Php51.94

or

169% of Php27.94 + 10% of (169% of Php27.94)= Php47.22 +4.72= Php51.94

b.2.2 On a regular holiday

130%(200% of Php27.94) + 10% (130% of 200% of Php27.94)= 1.3 x (2.0 x Php27.94) + .10 x (1.3 x 2.0 x Php27.94)= Php72.64 + Php7.26= Php79.90

or

260% of Php27.94 + 10% of (260% of Php27.94)= Php72.64 + Php7.26= Php79.90

OVERTIME PAY (Article 87)

Definition: Overtime work is the work performed beyond eight (8) hours a day.

Coverage: Every employee who is entitled to premium pay is likewise entitled to the benefit of overtime pay.

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Overtime Pay Rates:

The minimum overtime pay rates vary according to the day the overtime work is performed:

(a) For work in excess of eight (8) hours performed on ordinary working days:

Plus 25% of the hourly rate

(b) For work in excess of eight (8) hours performed on a scheduled rest day, a special day, and a regular holiday:

Plus 30% of the hourly rate on said days.

Illustration: Using Php223.50 as basic daily rate and Php27.94 as basic hourly rate.

i) Overtime pay on an ordinary day

Php27.94 + (25% of Php27.94) = Php27.94 + (0.25 x Php27.94)Php27.94 + Php6.98 = Php34.92 OT/hour

or

125% of Php27.94 = 1.25 x Php27.94 = Php34.92 OT/hour

ii) Overtime pay on rest day or on special day

130% of Php27.94 + 30% of (130% of Php27.94)Php36.32 + Php10.90 = Php47.22 OT/hour

or

130% of (130% of Php27.94) = 1.3 x (1.3 x Php27.94)=1.3 x Php36.32 = Php47.22 OT/ hour

iii) Overtime pay on a rest day which falls on a special day

130% of (150% of Php27.94) = 1.3 x (1.5 x Php27.94)=1.3 x Php41.91 = Php54.48 OT/hour

or

150% of Php27.94 + 30% of (150% of Php27.94)Php41.91 + Php12.57 = Php54.48 OT/hour

iv) Overtime pay on a regular holiday

200% of Php27.94 + 30% of (200% of Php27.94)=Php55.88/hr + Php16.76 = Php72.64 OT/hour

or

130% of (200% of Php27.94) = 1.3 x (2.0 x Php27.94)= 1.3 x Php55.88 = Php72.64 OT/hour

v) Overtime pay on a rest day which falls on a regular holiday

260% of Php27.94 + 30% of (260 of Php27.94)= Php72.64/hr + Php21.79 = Php94.43 OT/hour

or

130% of (260% of Php27.94) = 1.3 x (2.6 x Php27.94)= 1.3 x Php72.64 = Php94.43 OT/hour

Stipulated Overtime Rates: Generally, the premium pay for work performed on rest days or on special days or regular holidays are included as part of the regular rate of the

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employee in the computation of overtime pay for overtime work rendered on said days especially if the employer pays only the minimum overtime rates prescribed by law.

The employees and employer, however, may stipulate in their collective bargaining agreement payment for overtime work at rates higher that those provided by law.

PREMIUM PAY

Definition:

Premium pay refers to the additional compensation required by law for work performed within eight (8) hours on non-working days, such as rest days and special days.

Coverage:

This benefit applies to all employees, except:

a) Government employees whether employed by the National Government or any of its political subdivisions, including those employed in government-owned or controlled corporations;

b) Managerial employees if they meet all of the following conditions:

1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof.

2) They customarily and regularly direct the work of two or more employees.

3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight.

c) Officers or members of a managerial staff if they perform the following duties and responsibilities:

1) The primary duty consists of the performance of work directly related to the management policies of their employer;

2) Customarily and regularly exercise discretion and independent judgment; and

i. Regularly and directly assist a proprietor or managerial employee whose primary duty consist of the management of the establishment in which he is employed or sub-division thereof, or

ii. Execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or

iii. Execute under general supervision, special assignments and tasks; and

3) Who do not devote more than 20% of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), and (2) above.

d) Domestic servants and persons in the personal service of another.

e) Workers who are paid by results, including those who are paid on piece-work, “takay”, “pakiao” or task basis, and other non-time work if their output rates are in accordance with the standards prescribed in the regulations, or where such rates have been fixed by the Secretary of Labor and Employment.

f) Field personnel if they regularly perform their duties away from the principal or branch office or place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.

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PREMIUM PAY RATES

The minimum premium pay rates are as follows:

a) For work performed on rest days or on special daysPlus 30% of the daily rate of 100% or a total of 130%.

b) For work performed on a rest day which is also a special dayPlus 50% of the daily rate of 100% or a total of 150%.

c) For work performed on a regular holiday which is also the employee’s rest day (not applicable to employees excepted in the holiday pay rule).Plus 30% of the regular holiday rate of 200% based on his daily basic wage rate or a total of 260%.

Illustration: Using Php223.50 as daily basic rate (DBR)

a) 30% of Php223.50 = .3 x Php223.50 = P67.05Php223.50 + Php67.05 = Php290.55

or

130% of Php223.50 = 1.3 x Php223.50 = Php290.55

b) 50% of Php223.50 = .5 x Php223.50 = Php111.75Php223.50 + Php111.75 = Php335.25

or

150% of Php223.50 = 1.5 x Php223.50 = Php335.25

c) 200% of Php223.50 + 30% of 200% of Php223.50= Php447.00 + .3 x (2 x Php223.50)= Php447.00 + (.3 x Php447)= Php447.00 + Php134.10= Php581.10

or

[(200% + (30% of 200%)] of Php223.50= (200% + 60%) of Php223.50= 260% of Php223.50= 2.6 x Php223.50= Php581.10

SERVICE CHARGES(Article 96)

SHARING

Employees of employers collecting service charges are entitled to an equal share in the 85% of the total of such charges, except managerial employees. The remaining 15% of the charges may be retained by the management to answer for the losses and breakages and for distribution to the managerial employees, at the discretion of the management in the latter case. Most hotels and some restaurants, nightclubs, cocktail lounges, among others, collect service charges.

PAYMENTS

The shares of the employee in the service charges have to be distributed to them not less than once every two (2) weeks, or twice a month at intervals not exceeding sixteen (16) days.

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Where the company stopped collecting service charges, the average share previously enjoyed by the employees for the past twelve (12) months immediately preceding such stoppage shall be integrated into their basic wages.

TIPS

Where a restaurant or similar establishment does not collect service charges but has a practice or policy of monitoring and pooling tips given voluntarily by its customers to its employees, the pooled tips should be monitored, accounted and distributed in the same manner as the service charges.

SERVICE INCENTIVE LEAVE(Article 95)

Coverage:

Every employee who has rendered at least one (1) year of service is entitled to service incentive leave of five (5) days with pay.

This benefit does not apply to the following:

a) Government employee;b) Domestic helpers and persons in the personal service of another;c) Managerial employees; d) Field personnel and those whose time and performance is unsupervised by the employer;e) those already enjoying this benefit;f) those enjoying vacation leave with pay of at least five (5) days; andg) those employed in establishments regularly employing less than ten (10) employees.

MEANING OF “ONE (1) YEAR OF SERVICE”

The phrase of “one year of service” of the employee means service within 12 months, whether continuous or broken, reckoned from the date of the employee started working. The period includes authorized absences, unworked weekly rest days, and paid regular holidays. Where by individual or collective agreement, practice or policy the period of working days is less than 12 months, said period shall be considered as one year for the purpose of determining entitlement to the service incentive leave.

AVAILMENT/COMMUTATION TO CASH

The service incentive leave may be used for sick and vacation leave purposes. The unused service incentive leave is commutable to its money equivalent at the end of the year. In computing, the basis shall be the salary at the date of commutation.

The availment and commutation of this benefit may be on a pro rata basis.

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