Night shift differential. Deduction of undertime must be based on the employee’s tardiness and salary. The undertime can be deducted through his or her wage or through other means. Night shift overtime hourly rate: 1.1 x (1.30 x 112.5)= Php 89.375/hour. Calculating for your employees’ overtime, holiday, rest day, and/or night differential premiums is not a walk in the park. Overtime pay rates depend upon the the day the work is performed, whether it is ordinary working day, special day, regular holiday or rest day. Cottage and handicraft For example, on average, the minimum daily payroll in the Phili… The employer cannot use the offset to keep the company from compensating the employee with required overtime rates. Overtime pay rates are covered under the Labour Code. OVERTIME PAY • An employee is entitled to overtime pay for each hour of work done beyond normal working hours • The overtime rate on normal day is 25% • The overtime rate on rest day and holiday is 30%. The overtime rate is 125% of the normal hourly wage rate if overtime work is performed on an ordinary working day (100 (assumed normal hourly wage)*125%); The overtime rate is 169% of the normal hourly wage rate if the overtime work is performed on a special day or scheduled rest day (100 (assumed normal hourly wage)*130%*130%); The overtime rate is 195% of the normal hourly wage rate if the overtime work is performed on a special day which falls on a scheduled rest day (100 (assumed normal hourly wage)*130%*150%); The overtime rate is 260% of the normal hourly wage rate if the overtime work is performed on a regular holiday (100 (assumed normal hourly wage)*130%*200%); The overtime rate is 338% of the normal hourly wage rate if overtime work is performed on a regular holiday which falls on a scheduled rest day (100 (assumed normal hourly wage)*130%*260%); In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety;, In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer;, In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures;, To prevent loss or damage to perishable goods;, Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer; and. Under R.A. 9504 overtime pay, night shift differential pay and hazard pay received by such minimum wage earners are exempt from income tax (Section 2, R.A. 9504). Under certain conditions and circumstances, however, employers may require overtime work: Can an employee offset his or her filed undertime with overtime work?The undertime cannot be offset with overtime. Night work is regulated under the Labour Code which provides for a night shift differential. Art. For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. If your employee works beyond eight hours, you must pay overtime wages. Article 86 - Night shift differential; Article 87 - Overtime work; Article 88 - Undertime not offset by overtime; Article 89 - Emergency overtime work; Article 90 - Computation of additional compensation; Article 91 - Right to weekly rest period; Article 92 - When employer may require work on a rest day; Weekends–Saturday and Sunday–are usually allotted as rest days. What is the overtime pay computation for employees working on a night shift during a rest day? How many hours are allowed for overtime work?Employees can render up to eight (8) hours of overtime work. Ordinary day Overtime. When they work the evening shift, they are paid a shift differential of $1 an hour. As far as the rate of night work is concerned, night shift employees must be paid a differential of at least 10% of the regular wage for each hour of work performed between 10:00 p.m. and 6:00 a.m. Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am; To determine the employee Night Differential pay: Special Holiday Rest day Night Differential = (Hourly … Ensuring your workspaces are ready for your return and the new norm. A shift differential is an extra bump in pay that some workers make for working outside of normal business hours. Retail and services 4. However, the following employees are NOT entitled to … Industry sectors are segmented as follows: 1. Art. Where an employee is made or permitted to work on his scheduled rest day or a special day, he is paid an additional compensation of at least 30% of his regular wage (130% of the normal wage rate). Rest periods of short duration during working hours are regarded as hours worked. If the day factor is 365, rest day is paid even when no work is done. If you are running a business in the Philippines, you must know the policies regarding overtime pay computation, or shift differentials. Under R.A. 9504 overtime pay, night shift differential pay and hazard pay received by such minimum wage earners are exempt from income tax (Section 2, R.A. 9504). These rates are set by the Wage Rationalization Act, Republic Act No. In line with that, you should pay for their rendered service in … Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o'çlock in the evening and six o'clock in the morning. The amount of 13 th month pay shall at least be 1/12 of the total basic salary earned for the year which shall n include all earnings paid by his/her employer for services rendered but does not include allowances and other monetary benefits such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night shift differential, holiday pay and COLA. Employee would be paid the overtime rate for the excess hours worked. Overtime work may cause unnecessary stress to workers, making it difficult for them to achieve and maintain work-life balance. This website does not show any ads or advertising materials for an ad-free reading experience of the readers. (When an employee is required to work beyond the normal 8 hours, they are entitled to receive Overtime Pay) If the employee’s overtime reaches overnight or the night differential time frame, the night differential would affect the overtime rate of the employee. Women and young persons are prohibited from night work. Monthly rate: Php10,000Daily rate (20 working days/month): 10,000/20= Php500Hourly rate (8 hours): 500/8= Php 62.50, 110% x number of hours in excess of 8 hours (130% x hourly rate)Night shift overtime hourly rate: 1.1 x (1.30 x 112.5)= Php 89.375/hour. Gross salary is how much the employee earned, including overtime, night shift differential and other additional compensation, based on actual number hours of work. In the Philippines, the minimum wage rates differ for every region, province, and industry. In fact, there are 32 different combinations at play. 110% x number of hours in excess of 8 hours (130% x hourly rate) Monthly rate: Php10,000 Daily rate (20 working days/month): 10,000/20= Php500 Hourly rate (8 hours): 500/8= Php 62.50 The Labour Code provides that work may be performed beyond 8 hours a day provided that the employee is paid for the overtime work as prescribed. Source: Article 86, Labor Code of the Philippines Employees working anytime from 10 o’clock in the evening to 6 o’clock in the morning qualifies for the Night Shift Differential (NSD). What is the computation for overtime pay on a regular work day?Here's a sample computation based on the given values (monthly rate: Php18,000; factor rate: 258; 246 total regular days + 12 regular holidays): Daily rate: 18,000 x 12 / 258= Php837.21Hourly rate (8 hours): 837.21 / 8= Php 104.65, Number of hours in excess of 8 hours (125% x hourly rate x number of hours rendered)Overtime hourly rate: 1.25 x 104.65= Php 130.81/hour, What is the computation for overtime pay on a rest day? If the employee is late for 1 minute, the deduction must not be based more than 1 minute. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. The working hours for kasambhay (domestic helpers) are 10 hours a day, exclusive of one hour breaks for each regular meal of the day. It further provides that any employee may be required by the employer to perform overtime work in any of the following cases: in the case of national emergency or force majeure; urgent work in order to avoid serious loss or damage to the employer; work necessary to prevent loss or damage to perishable goods; and were the completion or continuation of the work is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. Labour Code (Presidential decree No. Knowing the level of compensation your employees should receive if they work the extra hours on regular workdays and, helps you establish a reputable image for your business. Since differential pay is company policy, not something regulated by the government, there’s no standard way to pay it. Regular holidays, such as Labor Day and Independence Day, tend to have fixed dates and are present ye… Employees who work between 10:00 PM and 6:00 AM are entitled to night shift differential. No statutory provisions in law could be identified that stipulate whether the employees are to be given compensatory rest days for working on public holidays or weekly rest days. Overtime pay for work beyond eight hours Night shift differential at 10% increment for work done from 10:00 PM to 6:00 AM Minimum wage earners in the Philippines are not subject to withholding tax and are not required to file income tax returns at the end of the year for obviously, they, will not be any tax due under such exemption. Category My PayrollHero Account, Payroll, Philippine Payroll Regulations and Information Every employee is entitled to a Night Differential or Night shift pay of not less than 10% of his regular wage for each hour of work performed between 10pm and 6am. However health personnel in cities and municipalities with a population of at least one million, or in hospitals and clinics with a bed capacity of at least one hundred may be required to work additional hours where exigencies of the service require. Can employers/business owners require their employees to render overtime work?The law does not encourage employers/business owners to ask their employees to do overtime work. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. The Law does not provide a limit on overtime work. Moreover, under time work on a day cannot be offset by overtime work on another day. On an ordinary day, the overtime rate per hour is determined as follows: Basic Labor Code of the Philippines - Night Shift Differential (NSD) Night Shift Differential For work performed from 10:00 p.m. to 6:00 a.m. the following day, the employee is entitled to a night shift differential pay of not less than 10% of his regular wage for each hour of work rendered. Notably, the MWE’s earnings from overtime, night shift differential, and hazard pay are not anymore exempt. Night Shift Differential (NSD) refers to the additional compensation of ten percent (10%) of an employee’s regular wage for each hour of work performed between 10 p.m. and 6 a.m. The personal and additional exemptions of employees previously available under R.A. 9504 were also removed. However, suppose the employee also earns a shift differential for working weekends or the night shift, or a performance bonus, or a commission. This extra pay needs to be added into the Regular Rate to make the overtime rate bigger. Take note that it can fall into more than one category: it can be both a rest day and a regular holiday, for example. *same monthly rate applied in the computation, special day: 110% x (130% x basic pay)10,000 x 1.3 = Php 13,000Special day premium pay, night shift: (i.e., 20 working days/month): 1.1 x (13,000/20)= Php 715/day, Special day that coincided on a scheduled rest day: 110% x (150% x basic pay)10,000 x 1.5 = Php 15,000Special and rest day premium pay (i.e., 20 working days/a month): 1.1 x (15,000/20)= Php 825/day, What is the overtime pay computation for employees working on a night shift during a regular holiday? This extra pay needs to be added into the Regular Rate to make the overtime rate bigger. “Article 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods shall not apply to managerial employees. Non-agricultural 2. Night-shift differential pay may be granted to government personnel at a rate not exceeding 20% of the hourly basic rate of the employee.-- uno. Employees who work between the hours of 10 p.m. to 6 a.m. are entitled to night shift differential pay also known as Night Shift Pay to compensate them for the hazards and inconvenience of working at odd hours when the body is normally asleep. Night shift differential. The maximum working hours on such days cannot exceed 12 hours per day. NIGHT SHIFT DIFFERENTIAL . If work is performed on a rest day which is also a special day, worker is paid 150% of the normal wage rate. *same values used in the computation, First 8 hours = 130%; beyond 8 hours = 169% /hourFirst 8 hours: ((18,000 x 12) / 258) x 1.3 = Php1,088.37Beyond 8 hours: [((18,000 x 12) / 258) x 1.69]/8 = Php176.86/hour, What is the computation for overtime pay on a special day? Night shiftdifferential. As far as the rate of night work is concerned, night shift employees must be paid a differential of at least 10% of the regular wage for each hour of work performed between 10:00 p.m. and 6:00 a.m. However, not all employees are entitled to night shift differential. Some employees, however, are exempt to this rule. Shift differentials aren’t required by federal law, but many companies, especially in the manufacturing industry, offer them as a way of encouraging employees to take an “undesirable” shift such as the night shift or a weekend shift. Further, the daily hours’ limit in the Labour Code does not apply to government employees, managerial employees, field personnel, employer’s family members, domestic helpers, and personal service providers. Overtime work. If work is performed on a rest day which is also regular holiday, worker is paid 260% of the normal wage rate. Art. Art. Overtime work. COLA is not included in overtime calculation. Night Shift Differential in the Philippines WHAT IS NIGHT SHIFT DIFFERENTIAL Article 86 of our labor provides that every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in … An employee is entitled to night pay for any nonovertime work performed between 6 p.m. and 6 a.m. during designated core hours. A prevailing rate employee is entitled to a night shift differential when the majority of hours worked during a regularly scheduled nonovertime shift occur in either of these two shifts: "Majority of hours" means a number of whole hours greater than one-half (including meal … For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. Read also: Can Employees Be Compelled To Render Overtime Work? If you are running a business in the Philippines, you must know the policies regarding overtime pay computation, or shift differentials.Knowing the level of compensation your employees should receive if they work the extra hours on regular workdays and holidays helps you establish a reputable image for your business. Source: §86 of the Labour Code, as amended. 87. *same monthly rate applied in the computation, Regular holiday (200% x basic pay)10,000 x 2 = Php 20,000Holiday pay (i.e., 20 working days/month): 1.1 x (20,000/20) = Php 1,100/day, Regular holiday that coincided on a scheduled rest day (260% x basic pay)10,000 x 2.6 = Php 26,000Premium pay (i.e., 20 working days/a month): 1.1 x (26,000/20) = Php 1,430/day, How a PEZA-Accreditation Can Benefit Your Business, 15-Minute Team Building Activities You Can Apply in the Workplace, The Pros and Cons of Working in a Call Center in Manila, Overtime Pay Computations And Policies In The Philippines, , you must know the policies regarding overtime pay computation, or, . Article 86 - Night shift differential; Article 87 - Overtime work; Article 88 - Undertime not offset by overtime; Article 89 - Emergency overtime work; Article 90 - Computation of additional compensation; Article 91 - Right to weekly rest period; Article 92 - When employer may require work on a rest day; ..- - When the schedule of working hours fall; partly within 6:00 PM to 6:00 AM, the night-shift differential pay shall be paid only for the hours within 6:00 PM to 6:00 AM of the following day.- 22009 Guidelines on the Adoption of Flexible Work Arrangements Part III, point 1. These guidelines define a compressed workweek as being one where the normal workweek is reduced to less than 6 days but the weekly working hours (48 hours) remain unchanged. 6727, and vary depending on the sales of the company as well as the number of employees. In line with that, you should, If the country is at war or declared to be under national or local emergency, If overtime work can help save lives or properties in face of danger to public safety due to emergencies caused by fire, natural disasters, or serious accidents, If work started before the 8th hour needs to be completed or continued to avoid grave obstruction or to prevent prejudice to the business or operations, If overtime work is needed to achieve good weather or environmental conditions and the quality of work and performance depend on these conditions, If urgent work needs to be done on equipment, installations, and machinery to avoid loss or damage, If work is required to preserve perishable goods or prevent its loss. Employees extending their work hours during in the night shift will be given an additional 25% as his overtime rate with their regular hourly rate, plus ten percent 10% for every hour of working between the covered period. To determine the employee Night Differential pay: Special Holiday Night Differential = (Hourly rate × 130% × 10% × 8 hours) Php 59.28 = (Php 57.00 × 1.3 × 0.10 × 8 hours) Special Holiday and at the same time Rest day Night Shift. However, kasambahay under the age of 18 years are not allowed to work more than 8 hours a day, 5 days a week, exclusive of 1 hour breaks for each regular meal of the day. Most businesses will outline how shift differentials work, if they’re offered, in the employee handbook.Usually, however, differential Moreover, work hours may fall under different categories, making computation more complex. However, suppose the employee also earns a shift differential for working weekends or the night shift, or a performance bonus, or a commission. Regional Office No. What is the overtime pay computation for employees working on a night shift during a rest day? The worker should be paid overtime pay, equivalent to 125% of his usual rate per hour. No. Article 86 of Philippine Labor Code states, “Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning.” 86. “This is pursuant to our existing policy to recognize voluntary work arrangements between companies and their employees that is mutually beneficial and does not diminish existing standards and benefits such as overtime pay premium and night shift differential,” Labor Secretary Silvestre H. Bello III said. 2. Under Philippine labor laws, an employee who works between 10 p.m to 6:00 a.m. should be paid a night shift differential of not less than ten percent (10%) of his regular wage. The Trade Union Congress of the Philippines (TUCP) has thrown its support behind two House bills seeking to exclude from income taxes all overtime and graveyard shift differential pay received by salaried employees, including the country’s 1.1 million business process outsourcing (BPO) workers who perform jobs all day and all night. Republic of the Philippines. 110% x number of hours in excess of 8 hours (130% x hourly rate)Monthly rate: Php10,000Daily rate (20 working days/month): 10,000/20= Php500Hourly rate (8 hours): 500/8= Php 62.50, What is the overtime pay computation for employees working on a night shift during a special day? Processing of Payroll DEPARTMENT OF LABOR AND EMPLOYMENT. Every employee shall be paid a night shift premium of not less than 10% of their regular wage for each hour of work performed between 10:00 PM and 6:00 AM. The Department of Labor and Employment has published advisory guidelines on the adoption of flexible work arrangements which includes compressed workweeks among a range of flexible arrangements which employers may consider implementing in times of economic difficulty or national emergency. Accordingly, they are not entitled to holiday pay, overtime pay, premium pay, night shift differential pay, and service incentive leave. Is it a rest day, a regular holiday, or a special non-working day? Source: §82, 83, 84, 87, 88 and 89 of the Labour Code, as amended; §12A of the Special Protection of Children against Child Abuse, Exploitation and Discrimination Act; Department Advisory No. Working hours in the Philippines cannot exceed eight hours in a day, not including the mandatory one-hour lunch break. *same monthly rate applied in the computationRegular holiday: (200% x basic pay)18,000 x 2 = Php36,000Holiday pay (i.e., 20 working days/month): 36,000/20 = Php1,800/day, Regular holiday that coincided on a scheduled rest day: (260% x basic pay)18,000 x 2.6 = Php46,800Premium pay (i.e., 20 working days/month): 46,800/20= Php 2,340/day. So if he or she worked for less than 8 hours, the compensation will be adjusted accordingly. Powered by the WageIndicator Foundation - Share and compare wages, understand Labour Laws and spot career opportunities. If a worker works on a regular holiday, he is paid an additional compensation of at least 100% of his regular wage (200% of the normal wage rate). Law on Night Shift Differential in the Philippines WHAT IS NIGHT SHIFT DIFFERENTIAL Article 86 of our labor provides that every employee shall be paid a night shift differentialof not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. A child below 15 years cannot work for more than 4 hours a day, while adolescents (15 and 18 years) cannot work for more than 8 hours a day. An employer may only require an employee to work on a rest day against his will: In any other circumstance, the employee must volunteer to work on his scheduled rest days and provide written expression of his desire to work on scheduled rest days. When working overtime, RNs are paid time-and-one-half of their basic hourly rate of $22. N ight Shift Differential (NSD) refers to the additional compensation of ten percent (10%) of an employee’s regular wage for each hour of work performed between 10 p.m. and 6 a.m. Generally, all employees are entitled to night shift differentials, except the following: 4 Simple Charts to explain Philippines Premium Pay Rate FIND OUT THE OVERTIME PAY RATE, NIGHT SHIFT DIFFERENTIAL PAY RATE, REST DAY PAY RATE AND HOLIDAY PAY RATE. Employees working anytime from 10 o’clock in the evening to 6 o’clock in the morning qualifies for the Night Shift Differential (NSD). One of the reasons is the night shift differential pay. Knowing the level of compensation your employees should receive if they work the extra hours on regular workdays and holidays helps you establish a reputable image for your business. The normal hours of work of any employee cannot exceed eight (8) hours a day. 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