Philippines – Time Out: A Look Into Overtime Pay.

6 November 2020

 

Time is a precious finite commodity. In fact, it has been said that the only thing more precious than time is what we spend it on. Pre-pandemic, traffic, deadlines and work flow processes have tied employees to the office clock, so to speak. While work from home arrangements provide much flexibility in an employee’s workhours, there is still a possibility of time boundaries being blurred and normal work hours exceeded given the reach of technology and the employees’ perpetual availability on multiple online platforms.

 

Whether under ordinary work conditions or during work from home arrangements, are employees entitled to additional pay for work done beyond normal work hours?

 

The Labor Code mandates the payment of overtime pay for additional pay for work performed in excess of the normal work hours of 8 hours a day. The rate of overtime pay is additional 25% of the hourly rate for work performed in excess of eight (8) hours on ordinary day. On an employee’s rest day, the rate is plus 30% of the daily basic rate or a total of 130% for work performed on rest day or special day. On a special day falling on the employee’s rest day, the rate of 50% of the daily basic rate or a total of 150% shall apply. For work performed on a regular holiday falling on the employee’s rest day,  there shall be a premium pay of 30% of the daily basic rate or a total of 260%.

 

Overtime must also be paid under work from home arrangements. Under Republic Act No. 11165 or the “Telecommuting Act”, an employer in private sector may offer a telecommuting or “work-from-home” program to its employees on a voluntary bases, and upon such terms and conditions as they may mutually agree upon. Under the law, such terms and conditions shall not be less than the minimum labor standards set by law, and shall include compensable work hours, minimum number of work hours, overtime, rest days, and entitlement to leave benefits.

 

Under Section 5 of the Telecommuting Act, the employer shall ensure that the telecommuting employee are given the same treatment as that of comparable employees working at the time employer’s premises. They shall receive a rate of pay, including overtime and night shift differential, and other similar monetary benefits not lower than those provided in applicable laws, and collective bargaining agreements.

 

However, there are certain classes of employees who are not required to be compensated overtime pay. Under the Labor Code and as expounded by other laws, overtime pay must be paid to all employees, except:

 

1. Government employees, which are governed by separate rules such as the Civil Service Law and other rules and regulations of the Civil Service Commission (CSC)
    

2. Managerial employees whose primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof, who customarily and regularly direct the work of two or more employees therein; and have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to hiring, firing, and promotion, or any other change of status of other employees are given particular weight.
    

3. Officers or members of a managerial staff, upon meeting certain conditions
    

4. Kasambahay and persons in the personal service of another;
    

5. Workers who are paid by results
    

6. 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.
    

While overtime pay is required to be paid for work done beyond normal work hours, the employee cannot require the employer, on the other hand, to allow him to render overtime work if not required or there is simply no work needed to be done.