Statutory Labor Standards Under Presidential Decree No. 442
The Labor Code of the Philippines establishes mandatory compensation minimums for hours worked on ordinary workdays, scheduled rest days, special non-working days, and regular holidays.
1. Regular Holidays (Article 94)
Regular holidays (such as New Year's Day, Maundy Thursday, Good Friday, Araw ng Kagitingan, Labor Day, Independence Day, National Heroes Day, Bonifacio Day, Christmas Day, and Rizal Day) are fully paid days.
- Unworked Regular Holiday: 100% of the regular daily wage, provided the employee was present or on paid leave on the workday immediately preceding the holiday.
- Worked Regular Holiday: 200% of the regular daily wage for the first 8 hours.
- Overtime on Regular Holiday: 260% of the base hourly rate (200% × 1.30) for hours worked beyond 8 hours.
- Regular Holiday on Scheduled Rest Day: 260% of the regular daily wage for the first 8 hours; overtime is paid at 338% of the base hourly rate (260% × 1.30).
- Double Regular Holiday: 300% for the first 8 hours worked (200% if unworked); overtime is paid at 390% of the base hourly rate.
2. Special Non-Working Days (Article 93)
Special non-working days (such as Ninoy Aquino Day, All Saints' Day, and Feast of the Immaculate Conception) follow the principle of "no work, no pay" unless company policy or a collective bargaining agreement states otherwise.
- Worked Special Day: 130% of the daily wage for the first 8 hours.
- Overtime on Special Day: 169% of the base hourly rate (130% × 1.30) for hours worked beyond 8 hours.
- Special Day on Scheduled Rest Day: 150% of the daily wage for the first 8 hours; overtime is paid at 195% of the base hourly rate (150% × 1.30).
3. Night Shift Differential (Article 86)
Employees who perform work between 10:00 PM and 6:00 AM receive an additional statutory premium of at least 10% of their regular wage for each hour worked during that window. If the work performed during this window is overtime, the 10% premium applies directly to the overtime hourly rate.
4. Annual Divisors and Equivalent Daily Rate (EDR)
Monthly-paid employees determine their equivalent daily rate and hourly rate through standard yearly divisors approved by the Department of Labor and Employment:
- 365 Days: For employees considered paid every day of the year, including rest days and holidays. Formula: (Monthly Salary × 12) / 365.
- 313 Days: For employees who work 6 days a week (Monday to Saturday) with Sundays off. Formula: (Monthly Salary × 12) / 313.
- 261 Days: For employees who work 5 days a week (Monday to Friday) with Saturdays and Sundays off. Formula: (Monthly Salary × 12) / 261.
- 254 Days: For employees who work 5 days a week and do not receive pay on unworked regular holidays. Formula: (Monthly Salary × 12) / 254.