statutory monetary benefits

STATUTORY MONETARY BENEFITSMINIMUM WAGE, HOLIDAY PAY, PREMIUM PAY, OVERTIME PAY, MATERNITY/PATERNITY/PARENTAL LEAVES, 13TH MONTH PAY, ETC.

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Business Laws & Best Legal Practices

“”

Statutory monetary benefits are mandatory.

- ATTY. JERICHO B. DEL PUERTO

Business Lawyer & Legal ConsultantJDP Consulting Ltd. Co.

Business Law ProfessorSan Beda Graduate School of Business

Book Author, Legal Aspects of BusinessCentral Books Publishing

For more info:

www.legalaspects.phBusiness Laws & Best Legal Practices

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Disclaimer

All statements, opinions, or information provided herein are for information purposes only. They should not be taken as professional/legal advice

and/or opinion on any matter for any purpose.

All opinions expressed by the speaker are solely his own.

They do not represent that of the organizations and associations which he may have any connection, association, or affiliation.

What are statutory monetary benefits?

Statutory monetary benefits are those which the employee is entitled to receive from the employer and the government as required by law.

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Statutory monetary benefits may either be from…

THE EMPLOYER Minimum wage

Holiday pay

Premium pay

Overtime pay

Night shift pay

Service charge

Service incentive leave

Maternity/Paternity/Parental leave

VAWC leave

Special leave for women

13th month

Separation pay

Retirement pay

THE GOVERNMENT ECC benefits

Philhealth benefits

SSS benefits

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Are all establishments required to pay these statutory monetary

benefits?Non-agricultural establishments are required to pay them.

Retail and service establishments employing a certain number of employees are not required to pay them.

See next slide for the compliance guide.

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Compliance Guide:Statutory Monetary

BenefitsRetail & Service w/ up to 9

employeesNon-Agriculture

Minimum wage √ √

Holiday pay N/A √

Premium pay √ √

Overtime pay √ √

Night shift pay √ (except up to 5 employees) √

Service charge √ √

Service incentive leave N/A √

Maternity/Paternity/ Parental leave √ √

VAWC leave √ √

Special leave for women √ √

13th month pay √ √

Separation pay √ √

Retirement pay N/A √

Managers are not entitled.

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May a covered employer refuse to pay these?

No, the statutory monetary benefits are mandatory.

Failure to pay these statutory monetary benefits opens the employer to consequences, ranging from labor, administrative, to criminal liabilities.C

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Consequences for failing to pay the statutory monetary benefits:

LABOR CASE Labor complaint for

statutory monetary benefits

For minimum wage, the employer may be required to pay double the unpaid sum.

10% attorney’s fees on the monetary award

ADMIN CASE DOLE may initiate an

administrative case against an employer for non-compliance with labor laws

Administrative penalties and fines may be imposed against the employer for non-compliance.

CRIMINAL CASE Certain statutory

monetary benefits carry criminal liabilities for their non-compliance.

For minimum wage, the employer may be imprisoned despite payment of unpaid sum or indemnity.

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How do you avoid such liabilities?

Management should observe best legal practices to avoid such consequences and liabilities.

Best legal practices are best practices with legal compliance. For employment, they are sourced from labor laws, rules & regulations,

jurisprudence, and best practices.

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What are the best legal practices for statutory monetary benefits?

Regularly update on and follow labor laws for legal compliance, especially on minimum wage and new benefits

Follow social media sites of DOLE and the Government which regularly provides for statutory monetary computations, particularly on holiday pay, special holiday pay, overtime pay, etc.

Ensure that the requirements are followed whenever a benefit is availed – e.g. Solo Parental ID, SSS notice, Barangay Complaint, etc.

Harmonize employment contracts, company policies and practices, and Collective Bargaining Agreement, with statutory monetary benefits

Keep proofs of payment to serve as evidence in case of a labor complaint

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May an employer substitute statutory monetary benefits

with company benefits?

No, statutory monetary benefits being mandatory have to be paid to the employees who are entitled thereto as a matter of law.

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May an employer lessen or add to these statutory

monetary benefits?Following the rule on non-diminution, the employer may add and improve

on these statutory monetary benefits but it may not lessen them.

Improving these benefits inure to the benefit of the employees.

Conversely, lessening these benefits are prejudicial to the employees.

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Statutory Monetary BenefitsLET’S DISCUSS EACH ONE.

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Minimum Wage

The minimum wage rates are those prescribed by the Regional Tripartite Wages and Productivity Board for each and every region.

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STATUTORY MONETARY BENEFITS(MANAGERS NOT ENTITLED.)

HOLIDAY PAY 100% daily rate:

Unworked

200% daily rate: Worked / Unworked Double Holiday

300% daily rate: Double Holiday

COLA excluded

Entitled - LOA w/ pay immediately preceding working day, except if work made on 1st day of 2 successive holidays

PREMIUM PAY + 30% daily rate

1 day off / week

Religious grounds, employer still allowed to require work at least twice a month

COLA excluded

OVERTIME PAY + 25% hourly rate

Overtime work generally prohibited, unless covered by compulsory overtime work.

COLA excluded

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STATUTORY MONETARY BENEFITS(MANAGERS NOT ENTITLED.)

NIGHT SHIFT PAY 10% daily rate / hour

10:00 pm to 6:00 am following day work

COLA excluded

SERVICE CHARGE 85% covered non-

managerial employees, 15% covered employers

Paid twice a month

If abolished, 12 month average of each employee integrated in salary.

Pooled tips covered.

SERVICE INCENTIVE LEAVE

5-day leave w/ pay

Conditions: 1 year of service (continuous / broken)

Convertible

Cumulative if allowed by the employer

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STATUTORY MONETARY BENEFITS

MATERNITY LEAVE

100% daily salary rate for 60 days (normal) or 78 days (caesarean)

Conditions: SSS member w/ 3 mo. contributions, reasonable notice to employer and SSS, full payment advanced by employer w/n 30 days from filing, first four deliveries (or miscarriages)

PATERNITY LEAVE 7 calendar days

leave w/ full pay

Conditions: married male employee and cohabiting with legitimate wife, first four deliveries, reasonable notice to employer

Non-convertible

SOLO PARENTAL LEAVE

7 working days leave w/ full pay

For solo parents or individual w/ responsibility of parenthood

Conditions: 1 year service (continuous or broken), reasonable notice to employer, Solo Parent Identification Card

Non-convertible, Non-Cumulative

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VAWC LEAVE 10-day leave w/ full pay,

extendible via protection orders

VAWC: Violence against women and their children

Conditions: Certification of Pending Action/Case (either from Barangay Officers, Prosecutor, or Clerk of Court)

Non-convertible, Non-cumulative

SPECIAL LEAVE FOR WOMEN

2 mos. leave w/ full pay: gross monthly

Surgery for gynecological disorders (involving female reproductive organs)

Conditions: 6 mos. service, application w/ employer w/n reasonable time, underwent above surgery certified by competent physician

Non-convertible, Non-cumulative

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13TH MONTH PAY Only for Rank & File

Employees who worked at least 1 mo.

Proportional – Minimum of 1/12 of total basic salary earned by employee in 1 calendar year

Basic salary: all remunerations, excluding allowances and monetary benefits not integral

SEPARATION PAY Authorized Causes +

In lieu of reinstatement

For Nos. 1 to 3 authorized causes: 1 mo. pay or 1 mo. pay / year of service

For Nos. 4 to 6 authorized causes: 1 mo. pay or ½ pay / year of service

In both, whichever is higher

RETIREMENT PAY Retirement pay = Labor Code or

Higher (Daily Rate x 22.5 days x Years of Service); 6 months = 1 year

Retirement age: employment contract, CBA, or company policy; If none, optional at 60 yrs. old , mandatory at 65 yrs. old or 50 yrs. old for underground mining employees, and minimum 5 years of service

Included: Workers paid by results and part-time workers

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“”

Statutory monetary benefits are owing to the employees.

- ATTY. JERICHO B. DEL PUERTO

For more information, contact:

JDP CONSULTING LTD. CO.Call: (+632) 479-5405, Fax: (+632) 479-5401Mobile: (+63) 917-622-0124E-mail: [email protected]: www.jdpconsulting.ph

You may also want to visit:

www.legalaspects.phBusiness Laws & Best Legal Practices

©2015, Atty. Jericho B. del Puerto. All rights reserved. For permissions to use this material, send a request to this e-mail address: [email protected]

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