In addition to his regular wage, the employee is entitled to overtime (OT) pay at the rate computed as follows:[1]

Table 1[2]
Overtime Pay for Ordinary Working Day (+125%)

Sector/Industry Rate* Overtime Pay
Non-agricultural P466.00 P466 ÷ 8hrs = P58.25/hr

P58.25/hr x 125% = P72.81

P72.81 x OT hours = OT pay

Retail/Service P429.00 P429 ÷ 8hrs = P53.63/hr

P53.63/hr x 125% = P67.03

P67.03 x OT hours = OT pay

*Rate: Minimum Wage (subject to change)

Table 2[3]
Overtime on Scheduled Rest day or Special Day (+130%)

Sector/Industry Rate* Overtime Pay
Non-agricultural P466.00 P466 ÷ 8hrs = P58.25/hr

P58.25/hr x 130% = P75.73

P75.73 x OT hours = OT pay

Retail/Service P429.00 P429 ÷ 8hrs = P53.63/hr

P53.63/hr x 130% = P69.71

P69.71 x OT hours = OT pay

*Rate: Minimum Wage (subject to change)

Table 3[4]
Overtime on Special Day falling on a Scheduled Rest day (+130%)

Sector/Industry Rate* Overtime Pay
Non-agricultural P466.00 P466 ÷ 8hrs = P58.25/hr

P58.25/hr x 130% = P75.73

P75.73 x 130% = P98.95

P98.95 x OT hours = OT pay

Retail/Service P429.00 P429 ÷ 8hrs = P53.63/hr

P53.63/hr x 130% = P69.71

P69.71 x 130% = P90.62

P69.71 x OT hours = OT pay

*Rate: Minimum Wage (subject to change)

Table 4[5]
Overtime on Regular Holiday (+130%)

Sector/Industry Rate* Overtime Pay
Non-agricultural P466.00 P466 ÷ 8hrs = P58.25/hr

P58.25/hr x 200% = P116.5

P116.5/hr x 130% = P151.45

P151.45 x OT hours = OT pay

Retail/Service (>10 employees) P429.00 P429 ÷ 8hrs = P53.63/hr

P53.63/hr x 200% = P107.26

P107.26/hr x 130% = P139.44

P139.44 x OT hours = OT pay

*Rate: Minimum Wage (subject to change)

Table 5[6]
Overtime on Regular Holiday Falling on Scheduled Rest Day (+130%)

Sector/Industry Rate* Overtime Pay
Non-agricultural P466.00 P466 ÷ 8hrs = P58.25/hr

P58.25/hr x 260% = P151.45

P151.45/hr x 130% = P196.86

P196.86 x OT hours = OT pay

Retail/Service (>10 employees) P429.00 P429 ÷ 8hrs = P53.63/hr

P53.63/hr x 260% = P139.44

P139.44/hr x 130% = P181.27

P181.27 x OT hours = OT pay

*Rate: Minimum Wage (subject to change)

For purposes of computing overtime pay, COLA is not included.[7]

Compulsory Overtime Work – The employer may require the employee to do overtime work in any of these situations:

  • When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive;[8]
  • When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity;[9]
  • When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature;[10]
  • When the work is necessary to prevent loss or damage to perishable goods;[11]
  • Where the completion or continuation of the work started before the 8thhour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer;[12] and
  • When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.[13]

Best Legal Practices:

Document necessity for compulsory overtime work – As compulsory overtime work is an exception to the 8-hour rule, it is the employer’s burden to prove that such work falls under the above list. Hence, he employer should document the necessity for the compulsory overtime work in the event that such is questioned later.

Voluntary overtime work allowed – The employer and the employee may agree to a stipulation on voluntary overtime work provided that the latter is properly compensated. The company policy should clearly specify how and when voluntary overtime work may be availed, including the requisite permission from the management.

Overtime pay cannot be waived – The overtime pay owing to the employee cannot be waived as it is contrary to law and public policy.

Compressed workweek, no overtime pay – For the welfare of the employee and to lessen operational costs, the employer may apply for compressed workweek with the DOLE Regional Office. In a compressed workweek, the employee will render service less than six days and not exceeding 12 hours a day without being paid the corresponding overtime pay by the employer.

To be clear, the 8-hour work is the general rule and overtime work is the exception. To require an employee to do overtime work, the employer must be able to justify it through any of the above exceptions.

*Comment or feedback: info@jdpconsulting.ph

References

[1] LABOR CODE. Article 87; See also CIVIL CODE, Article 1418.

[2] Id at 158.

[3] Ibid.

[4] Ibid.

[5] Ibid.

[6] Ibid.

[7] Id at 121.

[8] LABOR CODE. Article 89 (a).

[9] LABOR CODE. Article 89 (b).

[10] LABOR CODE. Article 89 (c).

[11] LABOR CODE. Article 89 (d).

[12] LABOR CODE. Article 89 (e).

[13] IMPLEMENTING RULES OF BOOK III OF THE LABOR CODE. Section 10(f), Rule I.