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Basic Philippine Labor Laws and Regulations

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Employers, including small businesses, may implement policies and impose terms and conditions of employment as they deem fit given their operating and profitability requirements. These policies and employment terms and conditions however must be consistent with mandated labor policies set forth in the Labor Code of the Philippines.

Under the Labor Code, your employees are entitled to compensation or wages, overtime pay, holiday and premium pay, service charges and tips in service businesses, SSS, EC and NHI remittances, service incentive leaves, and retirement pay.


Regular compensation

You must pay your employees no lower than the minimum wage rates prescribed by law. The minimum wage rates are based on the normal working hours of eight (8) hours a day.

The current regional daily minimum wage rates as of June 2005, are set forth in the table below and may accessed also at the Department of Labor and Employment website, www.dole.gov.ph.

(As of June 2005)

Plantation Non-Plantation
NCR a/ WO 11/
JUNE 16, 2005
P288.00-325.00 288.00 288.00
CAR b/ WO 10/
JUNE 15, 2005
219.00 - 225.00 206.00 - 212.00 206.00 - 212.00
I-09 WO 09/
NOV. 11, 2004
185.00 - 200.00 176.00 151.00
II c/ WO 10/
JUNE 25, 2005
200.00 - 208.00 188.00 - 196.00 188.00 - 196.00
III d/ WO 11/
JUNE 16, 2005
217.00 - 263.50 202.00 - 229.50 182.00 - 213.50
IV-A e/ WO 10/
JUNE 16, 2005
207.00 - 265.00 187.00 - 240.00 167.00 - 220.00
IV-B f/ WO 01/
JUNE 17, 2005
192.00 - 206.00 177.00 - 186.00 157.00 - 166.00
V g/ WO 10/
JUNE 24, 2005
162.00 - 209.00 177.00 - 187.00 157.00 - 167.00
VI h/ WO 13/
JUNE 18, 2005
180.00 - 205.00 165.00 - 185.00 160.00
VII i/ WO 11/
JUNE 16, 2005
190.00 - 223.00 175.00 - 208.00 175.00 - 208.00
VIII j/ WO 12/
JUNE 16, 2005
206.00 176.50 - 187.00 166.50
IX k/ WO 12/
JUNE 26, 2005
196.00 171.00 151.00
X l/ WO 11/
JUNE 17, 2005
211.00 - 218.00 201.00 - 208.00 201.00 - 208.00
XI p/ WO 11/
FEB. 5, 2005
207.00 - 209.00 197.00 - 199.00 176.00 - 178.00
XII m/ WO 12/
JUNE 19, 2005
 213.50 200.00 200.00
CARAGA n/ WO 06/
JUNE 25, 2005
 200.00 190.00 170.00
ARMM o/ WO 08/
JULY 1, 2005
 180.00 180.00 180.00


  1. Granted P25.00 wage increase
  2. Granted additional P20.00/day Cost of Living Allowance
  3. Granted P15.00/day Cost of Living Allowance
  4. Granted additional P20.00/day Cost of Living Allowance
  5. Granted P13.00-P22.00 wage increase to be given in two tranches, June 16, 2005 & Jan 1, 2006 as follows: P10 &12 (Extended Metropolitan Area): P10 &P7 (Growth Corridor Area): P10 & P5 (Emerging Growth Area): & P10 &P3 (Resource Based Area)
  6. Granted P5.00-P20 wage increase; Increase in non-agri will be given in two tranches, i.e. P10 upon effectivity & P5-P10 on 01 Jan. 2006.
  7. Granted P15.00 Cost of Living Allowance
  8. Granted P15 wage increase; for cottage/handicraft, retail/service employing not more than 10 & sugar industry, P10 increase upon effectivity & P5 on April 16, 2006.
  9. Granted P15 (Metro Cebu) & P12 (rest of the region) wage increase
  10. Integrated the P11 ECOLA under WO No. 10 and granted P11 Cost of Living Allowance
  11. Granted P20 Cost of Living Allowance to be given in two tranches, P16 upon effectivity & P4 on May 1, 2006
  12. Granted P16.00 Cost of Living Allowance
  13. Granted P6.00-13.00 Cost of Living Allowance
  14. Granted P11.00 wage increase
  15. Granted P10 Cost of Living Allowance
  16. Granted p15 Cost of Living Allowance

  17. Posted: 16 June 2005

Businesses Exempt from Minimum Wage Laws

If your company is a service establishment with not more than 10 employees, a distressed establishment with a deficit of 20% or more of current paid-up capital, or a new business enterprises outside the National Capital Region (NCR) or is in an export processing zones, you may pay your employees below minimum wage rates on condition that you file a request for exemption from compliance with wage orders with the National Wage and Productivity Council (NWPC).

If you do not pay minimum wages, you will be subject under Republic Act No. 8188 to a fine not less than Twenty-five thousand pesos (P25.000) nor more than One hundred Thousand pesos (P100.000) or imprisonment of not less than two (2) years nor more than four (4) years or both such fine and imprisonment at the discretion of the court. You may also be ordered to pay an amount equivalent to double the unpaid benefits owing to the employees. Payment of this indemnity may not absolve you of criminal liability.

Computation of Wages

The salaries and wages of your employees depend on whether you pay them on a monthly or daily basis.

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

Daily-paid employees are those whom you pay for days actually worked and on unworked regular holidays.

The EMR (equivalent monthly rate) of your employees is computed as follows:

Monthly Paid Employees

The formula for the EMR of monthly paid employees is:

EMR = (Applicable Daily Rate x 365)/12

The factor of 365 days consists of: 302 ordinary working days, 51 rest days, 10 regular holidays, and 2 special days.

Daily-paid employees:

The EMR of daily-paid employees depends on whether they are required to work on rest days and holidays.

The EMR of employees who are required to work every day including Sundays or rest days, special days and regular holidays is:

EMR = (Applicable Daily Rate x 391.50)/12

The factor of 391.5 days consists of: 302 ordinary working days, 20.60 (9 regular holidays x 200% plus one regular holiday/Sunday*260%), 66.3 (51 rest days x 130%), 2.6 (2 special days x 130%).

The EMR of employees who do not work and are not considered paid on Sundays or rest days is:

EMR = (Applicable Daily Rate x 314)/12

The factor of 314 days consists of: 302 ordinary working days, 10 regular holidays, 2 special days (if actually worked, equivalent to 2.6 days).

The EMR of employees who do not work and are not considered paid on Saturdays and Sundays or rest days

EMR = (Applicable Daily Rate x 262)/12

The factor of 262 days consists of: 250 ordinary working days, 10 regular holidays, 2 special days (if actually worked, equivalent to 2.6 days). Factor of 260 maybe used if the 2 special days are not worked and are not considered paid.

Workers Paid by Results

Your workers who are 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.

Adjustments in the AMW (applicable minimum wage rate) are computed as follows:


  1. Amount of increase in AMW ÷ Previous AMW x 100 = % increase
  2. Existing rate/piece x % increase = Increase in rate/piece;
  3. Existing rate/piece + increase in rate/piece = Adjusted rate/piece;

Apprentices, Learners and Handicapped Workers

If you have apprentices, learners or handicapped workers, you need to pay them no less than seventy five percent (75%) of the applicable statutory wage rates. Apprentices and learners are those who are covered by apprenticeship/learnership agreements duly approved by the DOLE.

Additional Compensation

Holiday Pay

You need to pay your employees holiday pay when you require them to work on legal, declared holidays or special days.

Regular holidays include:



January 1 New Year’s Day
Movable Date Maundy Thursday
Movable Date Good Friday
April 9 Araw ng Kagitingan
May 1 Labor Day
June 12 Independence Day
Last Sunday of August National Heroes Day
November 30 Bonifacio Day
December 25 Christmas Day
December 30 Rizal Day

Your employees who work on a regular holiday (for work within 8 hours) are entitled to twice (200%) their basic wage.

Where the holiday falls on their scheduled rest day, they are entitled to an additional 30% of the employee’s regular holiday rate of 200% or a total of at least 260%.

All covered employees are entitled to holiday pay when they are on leave of absence with pay. Those 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 do not work during the regular holiday.

National Special Days

There are two national special days: All Saints Day on November 1 and Last Day of the Year, December 31. During these days, the principle of “no work, no pay” applies. Workers who were not required or permitted to work on those days are not entitled to any compensation. This 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.

Employees who work on special days are entitled to additional compensation of not less than 30% on top of the basic pay or a total of 130%. If the special day is also the person’s rest day, he is entitled to at least 50% over and above the basic pay or a total of 150%.

Muslim Holidays

There are five (5) recognized Muslim holidays, namely:

  1. Amun Jadid (New Year), which falls on the first day of the lunar month of Muharram
  2. Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabiul- Awwal
  3. Lailatul Isra Wal Mi Raj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of the seventh lunar month of Rajab
  4. Id-ul-Fitr (Hari Raya Pausa), which falls on the first day of the tenth lunar month of Shawwal commemorating the end of the fasting season
  5. Id-ul-Adha ( Hari Raha Haji), which falls on the tenth day of the twelfth lunar month of Dhu’l-Hijja.

If your business is located in the provinces of Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zambaonga del Norte and Zamboanga del Sur and in the cities of Cotabato, Iligan, Marawi, Pagadian and Zamboanga, you need to pay your employees holiday pay.

Premium Pay

You need to pay your employees premium pay or additional compensation if you require them to perform work on nonworking days, such as rest days and special days.

The current premium pay rates are as follows:

Premium Rate
(of daily rate)
Total Rate
Work on rest days or special days
Work on rest day which is also a special day
Work on regular holiday which also a rest day
30% of 200%

You may opt not to pay your managerial employees, workers paid by results or field personnel the above premium pay.

Overtime Pay

If you require your employees to perform work beyond eight (8) hours a day, you need to pay them additional compensation as follows:

Work Overtime Rate
Work > 8 hours on ordinary working days
Work > 8 hours on rest day or  special or regular holiday

Night Shift differential

If your employees work at night between 10:00 pm and 6:00 am, you are required to pay them Night Shift Differential (NSD), as follows:


Rate (of hourly rate)


Night shift (10pm to 6 am) considered regular work



Ordinary day



Rest day, special day or regular holiday

10% of rest day, special day or holiday rate

110% of rest day, special day or holiday rate

Night shift considered overtime work



Ordinary day

10% of 125%

110% of 125% of basic rate

Rest day, special day or regular holiday

10% of rest day, special day or holiday rate

110% of rest day, special day or holiday rate

If you employ not more than five workers and you are a retail or a service establishment, you need not pay night shift differential. You also do not need to pay your managerial employees and field personnel the NSD.

Service Incentive Leave (SIL)

If your employees have been with you already for at least one (1) year, whether service is continuous or broken, you need to pay them Service Incentive Leave (SIL) equivalent to five days. The SIL may be used for sick and vacation leave purposes. If the SIL is not used up within the year, you may commute or pay its money equivalent at the end of the year. In computing the SIL, the basis shall be the salary rate at the date of commutation. The availment and commutation of this benefit may be on a pro rata basis.

You need not grant SIL if your employees are already enjoying this benefit such as when they are already given a vacation leave of at least five days.

You also need not accord SIL to your managerial employees and field personnel. If you are employing less than ten employees, you need not also pay them SIL.

Service Charges

If you are a service establishment, such as hotels, restaurants and night clubs, you may charge an additional 10% to your customer’s bill for distribution to employees.

If you collect service charges, your employees are entitled to an equal share in the 85% of the total of such charges, except managerial employees. You may retain the remaining 15% to answer for losses and breakages and for distribution to managerial employees, at your discretion.

You must distribute the shares of the employee in the service charges no less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.

If you stop collecting service charges, you are required to provide and integrate into the basic wage of your employees, the average share previously enjoyed by them for the past twelve (12) months immediately preceding such stoppage.


If you do not collect service charges but practice the pooling of tips given voluntarily by your customers to your employees, you should ensure that the pooled tips are monitored, accounted and distributed in the same manner as the service charges.

13th Month Pay

You also need to pay your rank and file employees 13th month pay no later than December 24 of every year. One half (1/2) of the required 13th month pay may be made before the opening of the regular school year and the other half on or before the 24th of December of every year. The minimum 13th month pay is not less than 1/12 of the total basic salary earned by an employee within a calendar year.

The "basic salary" includes all remunerations or earnings paid for services rendered. It does not include allowances and monetary benefits which are not considered 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.

Retirement Pay

If you have employees who have reached the age of 60 years or more but not beyond 65 years old, you need to pay them retirement. However, if you are a retail, service and agricultural establishment with no more than ten (10) employees, you are exempted from paying retirement pay. The minimum retirement pay is one-half (1/2) month salary for every year of service. A fraction of at least six (6) months is considered as one whole year.   "One-half month salary" includes:

  1. 15 days salary based on the latest salary rate;
  2. cash equivalent of 5 days of service incentive leave;
  3. one-twelfth (1/12) of the 13th month pay

These benefits are over and above those granted by the Social Security System.

SSS Registration

You are also required to enroll your employees under the Social Security System (SSS) program, which provides insurance and protection for private-sector employees, including resident foreign employees. SSS benefits include disability pension, retirement,funeral benefit, sickness allowance, maternity and paternity leave and loans.

If you are the owner of a single proprietorship business, you should accomplish and submit SSS Forms R-1 (Employer's Data Record) and R-1A (Initial or Subsequent List of Employees). If your business is a partnership or a corporation, you also need to submit your articles of partnership or incorporation.

You should also require your employees to secure an SS number and that that they are reported for coverage under the SSS;

You must report all employees for SS coverage within thirty (30) days from the date of employment by submitting an accomplished SSS Form R-1A (Employment Report) at the nearest SSS office. You are also required to deduct from your employees salaries’ the monthly SS contributions based on the schedule of contributions and remit these contributions to any SSS-accredited bank/SSS Head Office/ SSS selected branches on or before the 10th day following the month when said contributions are due and applicable.

SSS Benefits

The Social Security System (SSS) provides insurance and protection for private-sector employees, including resident foreign employees. SSS benefits include disability pension, retirement, funeral benefit, sickness allowance, maternity and paternity leave and loans.

Maternity Benefits

You must advance maternity benefits to your female employees whether married or unmarried equivalent 60 days for normal delivery, abortion or miscarriage or 78 days for caesarian section delivery. The rate is equivalent to one hundred percent (100%) of the average daily salary credit. Your female employees should be SSS members at the time of delivery, miscarriage or abortion, must have given the required notification to the SSS thru you; and you must have paid at least three months of maternity contributions within the twelve-month period immediately before the date of contingency.

Maternity benefits, like other benefits granted by the SSS, are granted to employees in lieu of wages and is not included in computing the employee’s 13th month pay.

Paternity Leave under Republic Act No. 8187

You are also required to grant paternity leave or time off from work to all your married male employees, regardless of employment status, (e.g. probationary, regular, contractual, project basis) to allow them to lend support to their wives during the period of recovery and/or in the nursing of their newborn child.

The paternity leave consists of seven (7) days with full pay for the first four deliveries of the employee’s lawful wife. Availment of the paternity leave may be after the delivery, without prejudice to an employer’s policy of allowing the employee to avail of the benefit before or during the delivery, provided that the total number of days shall not be more than seven (7) days for each covered delivery.

For more information on SSS registration and benefits, you may visit www.sss.gov.ph.

Tax Compliance

You must also ensure that you are withholding the proper taxes due on the compensation, benefits and other taxable emoluments paid to all your employees.

For more information on tax requirements and compliance standards, please visit www.bir.gov.ph.


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maritess ybanez  |  July 11, 2017
2years na po ako sa company ng satchmi grOup inc at under agency po ako pero bgla po ako pinatanggal ng company at hndi na pinapasok ng wlang valid reasons anu po ba mga rights ko?
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Jeffrey Rosales  |  June 16, 2017
ask q lang po about sa holiday pay. regular employee po aq ng isang coop.7 day a week work namin. last june 11 ng absent po aq then pumasok aq ng june 12 holiday... hindi po aq binayadan ng holidaypay para sa pagpasok ng june 12 hokiday kc absent daw po aq the day before haoliday. tama po ba un.....??? tnxz po.....
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Mykel Penales  |  May 01, 2017
Ask ko lang po kung tama po bang pilitin ang isang empleyado na mag over time kahit ayaw mo at pilitin kang papasukin kahit po holiday or rest day?
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Ariel Lauresta  |  April 11, 2017
Good day... I have a concern about holidays now. Holy thursday and good friday. Our company did now allow us to pay on this holidays. For we are daily. Only monthly employees are entitled according to our company. Is it right that we are not entitled to pay on regular holidays cause we are daily employees?
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Bianca de Guzman  |  March 07, 2017
does the regular employee (fixed) are entitled to 120 hours even if we only have 13 days in a cut off? e.g February 23- March 7, 2017. Please kindly answer my query. Thanks a lot.
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Richard Alcaparaz  |  February 01, 2017
Good Day, i just want to verify po regarding 13th month pay, i've work as a Call Center agent for more than 6 years now. I've been promoted as Team Leader and formally declared as a Regular TL dated Oct.16 2016.My concern is that they only gave me half of our 13th month pay as an initial payment, and they said that we are not really entitled for 13th month pay since we are already supervisor, we are just entitled for year end bonus. But how about the time that i've been an Agent from January 2016 up to Oct1-15, 2016. Am i entitled for complete 13th month pay from January 2016 up to September 2016(the time when im still an agent)?Please advise...Thanks
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bonie nava  |  January 26, 2017
hi, i just wanna ask lang po regarding sa nalaman ko po from my employer....accdg to them that they paid already for our saturday which is our rest day kasi every other saturdays ay pinapapasok kami pro rest day namin un...and i realized na ung basic ko ay 18k tapos ung daily rate ko is 692 plus na mas maliit kung ang computation lang is kung hanggang friday...ask ko lang po, are private companies required to pay until saturday?or what are the type of companies or businesses which are required to let their employees to attend work 6 days a week?
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Malacao Jojo  |  January 16, 2017
Gud day mam/sir tanong q lang po sana kung paano po ba ang pag cocompute ng rest day... Ang sabi kc ng campony q atleast once a week my reast day.. Ang case q po ka c biglang binago ang restday q 2nd week of the month last day off q jan 9 at ang magiging next day off q is jan 19 almost 9 days aq tuloy tuloy n pumasok at ang cut off namin ay 11 to 25 ngyari tuloy isa lng ang day off q ng cut off nato 14 days ang pinasok q pro 13 days lng namn babayaran sakin pex kc dahil regular aq ngaun po .. Tanong q pano po mg caount ng tamang off start b sa last n off m n araw or basta monday to sunday may off k isa.... Sana may makatulong sakin parang d n kc tama... Pls help me sa makkaabasa nito.. Tank u and god bless
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Jeannie Emia  |  January 16, 2017
What if an employee fired his employer without valid reason to fire.. What are the rights of employees?
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lourence pugne  |  December 13, 2016
good am. my wife is already 15 yrs sa trabaho niya ngayon sa isang private medicine company. every 5 years my rotation policy sila. 2016 January due ang misis ko na i-transfer, nag request sya through letter na ma-transfer siya sa branch na malapit sa residence namin because her current workplace is 1 hour travel from home. it was ignored and hindi siya na transfer noong january. ngayong upcoming January 2017, it was announced na mata-transfer siya sa branch na malayo sa amin, 2 hours, the least, ang travel time, one way, from our residence to her work while others are transferred closer to where they live, which in fact, are just new to the company! is there anything mentioned in the Labor Code that this practice may somewhat or directly violate the employees rights? especially that she is already have served 15 years sa company na yon? thank you.