Under Article 83 of the Labor Code work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. (See pp. 33-34 of re-numbered and updated Labor Code of the Philippines, 2018 Edition by Atty. Villanueva)

Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.

In relation to overtime, undertime work shall not be offset with overtime. Under Art. 84 of the Labor Code, undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in the relevant Chapter of the Labor Code. (See pp. 34 of re-numbered and updated Labor Code of the Philippines, 2018 Edition by Atty. Villanueva)

However, can the employee refuse to render overtime work? The employee cannot under certain

circumstances.

Art. 89 provides that:

“Article 89. Emergency Overtime Work.—Any employee may be required by the employer to perform overtime work in any of the following cases:

(a) 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;

(b) 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;

(c) 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;

(d) When the work is necessary to prevent loss or damage to perishable goods; and

(e) Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer.

Any employee required to render overtime work under this Article shall be paid the additional compensation required in this Chapter.”

Refusal to render overtime can be ground for disciplinary action. (See page. 137, Guide to Valid Dismissal of Employees, 2^nd Edition by Atty. Elvin B. Villanueva citing R.B. Michael Press vs. Galit, G.R. No. 153510, February 13, 2008)

Now, for purposes of computing overtime, every HR Practitioner, Business Owner or Manager needs to know are 1) Rates 2) Premium Days Days.

There are only two (2) rates: 1) 25% on ordinary working day and 2) 30% on rest days and holidays. The premium days are 1) rest days 2) special days 3) regular holidays (note: there is no more “legal holiday” as the term was changed to “regular holiday” under R.A. 9492 amending Section 26, Chapter 7, Book I of Executive Order No. 292, otherwise known as the Administrative Code of 1987).

Then these premium days may concur with each other such as rest day that falls on special day or regular holiday. Each of these combinations will be discussed and will be presented with sample computations here.

Assuming that Anne H. Iligsaute is a Customer Service Representative based in NCR receiving daily minimum wage of P570.00, how do we compute her OT pay on ordinary day, special day, regular holiday and rest day assuming in each of the said instances she rendered OT work for two (2) hours?

Note that the rate of PhP570.00 per day applies only to those in the Non-agriculture industry in NCR. The daily wage rate is PhP533.00 for those in Agriculture (Plantation, Non-plantation); Retail/Service Establishments (Employing 15 workers or less); Manufacturing Establishments (Regularly employing less than 10 workers).

Further, in applying the formula adding 25% or 30% to the base pay will yield the same result if the base rate is multiplied by 125% or 130%.

Scenario A:   OT pay for work in excess of eight (8) hours performed on ordinary working days, she must be paid an additional twenty-five percent (25%) of the hourly rate of said ordinary working day

Formula:        OT Pay = Daily rate / 8 hours x 125% x number of hours of OT work

Computation:

OT Pay          = PhP570.00 / 8 hours x 125% x 2 hours

= P71.25 x 125% x 2 hours

=PhP89.0625 x 2 hours

= PhP178.125

Scenario B:   OT pay for work in excess of eight (8) hours performed on a special day she must be paid an additional thirty percent (30%) of the hourly rate of said special day

Formula:        OT Pay = Daily rate / 8 hours x 130% x 130% x number of hours OT work

Computation:

OT Pay          = (([PhP570.00 / 8 hours] x 130%) x 130%) x 2 hours

= (([P71.25] x 130%) x 130%) x number of hours OT work

= ((PhP92.625) x 130%) x 2 hours

= (PhP120.4125) x 2 hours

= PhP240.825

Scenario C:   OT pay for work in excess of eight (8) hours performed on a scheduled rest day she must be paid an additional thirty percent (30%) of the hourly rate of said rest day

Formula:        OT Pay = Daily rate / 8 hours x 130% x 130% x number of hours OT work

Computation:

OT Pay          = (([PhP570.00 / 8 hours] x 130%) x 130%) x 2 hours

= (([P71.25] x 130%) x 130%) x number of hours OT work

= ((PhP92.625) x 130%) x 2 hours

= (PhP120.4125) x 2 hours

= PhP240.82

Scenario D:   OT pay for work in excess of eight (8) hours performed on a special day that falls on a scheduled rest day she must be paid an additional thirty percent (30%) of the hourly rate of said day

Formula:        OT Pay = Daily rate / 8 hours x 150% x 130% x number of hours OT work

Computation:

OT Pay          = (([PhP570.00 / 8 hours] x 150%) x 130%) x 2 hours

= (([P71.25] x 150%) x 130%) x number of hours OT work

= ((PhP106.875) x 130%) x 2 hours

= (PhP138.9375) x 2 hours

= PhP277.87

Scenario E:   OT pay for work in excess of eight (8) hours performed on a regular holiday she must be paid an additional thirty percent (30%) of the hourly rate of regular holiday

Formula:        OT Pay = Daily rate / 8 hours x 200% x 130% x number of hours OT work

P570/8 x 200% x 130% = P71.25 x 200% x 130% x number of hours OT work

Computation:

OT Pay          = (([PhP570.00 / 8 hours] x 200%) x 130%) x 2 hours

= (([P71.25] x 200%) x 130%) x number of hours OT work

= ((PhP142.50) x 130%) x 2 hours

= (PhP185.25) x 2 hours

= PhP370.50

Scenario F:   OT pay for work in excess of eight (8) hours performed on a regular holiday that falls on a scheduled rest day she must be paid an additional thirty percent (30%) of the hourly rate of said day

Formula:        OT Pay = Daily rate / 8 hours x 260% x 130% x number of hours OT work

P570/8 x 260% x 130% = P71.25 x 260% x 130% x number of hours OT work

Computation:

OT Pay          = (([PhP570.00 / 8 hours] x 260%) x 130%) x 2 hours

= (([P71.25] x 260%) x 130%) x number of hours OT work

= ((PhP185.25) x 130%) x 2 hours

= (PhP240.825) x 2 hours

= PhP481.65

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On 29 October 2021 a Proclamation No. 1236 was issued, declaring, among others, June 12, 2021 (Sunday) as a regular holiday nationwide. See PDF copy of Proclamation No. 1236 here.

On 8 June 2022, the Department of Labor and Employment (DOLE) issued a Labor Advisory 14, Series of 2022 providing for rules on the payment of wages for the regular holiday on 12 June 2022.

View the PDF file of the Labor Advisory No. 14, Series of 2022 here.

Based on said pay rules, here is a sample computation of pay using a fictional scenario:

Ms. Julie Henderson is a Waitress of Murana Marumifa Foodhouse located in NCR with at least twenty employees. She receives minimum wage for her pay. For instance, she worked on the said regular holiday and even rendered an overtime of two (2) hours. How should her pay be computed?

In the example provided below, the COLA will be disregarded since the NCR minimum wage based on Wage Order No. 23 has no more COLA.

Thus:

Daily Wage                   –        PhP570.00

Hourly Equivalent         –        PhP  71.25

Thus, there are two regular holidays to be paid:

1. The employee did not work

If the employee in NCR did not work on the regular holiday mentioned, she shall be paid 100% of the wage. Since the NCR rate will be used there is no COLA.

Formula:    [(Basic Wage + COLA) X 100%]

Illustration:

PhP570.00 x 100%       = PhP570.00

1. The employee worked

Rule: If the employee worked on the regular holiday he shall be paid and additional 100% of his wage for that day for the first eight hours.

Formula:    [(Basic Wage + COLA) X 200%]

Illustration:

PhP570.00 x 200%    = PhP1,140.00

Rule: If the employee worked in excess of eight hours or overtime work, he shall be paid additional 30% of his hourly rate on said regular holiday. For instance, he worked for two (2) hours.

Formula:    [(Hourly Rate of the Basic Wage X 200% x 130% x number of hours worked]

Illustration:

PhP570.00 / 8 hours = PhP71.25

OT work rate 130%

OT work is 2 hours

PhP71.25 x 200% x 130% x 2

PhP142.50 x 130% x 2

PhP185.25 x 2

PhP370.50

Thus:

First 8 hours                                   PhP1,140.00

OT Work of 2 hours                         PhP   370.50

TOTAL PAY                                   PhP1,510.50

Rule: If the employee worked on regular holiday which also falls on his rest day he shall be paid additional 30% of the basic wage of 200%.

Formula:    [(Basic Wage + COLA) 200%] + [30% (Basic Wage  x 200%)]

Illustration: (Disregard COLA there being no COLA in NCR)

[PhP570.00 x 200%] + [30% (PhP570.00 x 200%)]

PhP1,140.00 + [30% (PhP1,140.00)]

PhP1,140.00 + PhP342.00

PhP1,482.00

Rule: If he rendered overtime work on a regular holiday which falls also on his rest day, he shall be paid an additional 30% of his hourly rate on said day. For instance, he worked for 2 hours.

Formula:    (Hourly rate of the basic wage x 200% x 130% x 130% x number of hours worked)

Illustration:

PhP570.00 / 8 hours = PhP71.25

OT work rate 130%

OT work is 2 hours

PhP71.25 x 200% x 130% x 130% x 2

PhP142.50 x 130% x 130% x 2

PhP185.25 x 130% x 2

PhP240.825 x 2

PhP481.65

Thus:

First 8 hours (rest day)                   PhP 1,482.00

OT Work of 2 hours                         PhP    481.65

TOTAL PAY                                   PhP1,963.65

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

Read more on procedural due process discussion by Atty. Elvin:

Read more on procedural due process by Atty. Villanueva:

Twin Requirements of Notice and Hearing

Procedural Due Process for Other Types of Employment

Notice to Explain: Contents and Requirements

So many events had transpired afterwards, especially in 2020 when the COVID-19 struck the country. This naturally put on hold any attempt to adjust such minimum wage considering the business losses of most companies.

However, this 2022, the RTWPB of NCR has issued Wage Order No. 23 increasing the NCR minimum wage by PhP33.000 per day making the new minimum for non-agricultural sector at PhP570.00.

With the increase in the minimum wage, business owners may be interested to see the picture of how it would look like in numbers. Below are the illustrations of this projected implementation although the wage order still has to take effect following the completion of its publication.

Reportedly, it shall take effect 4 June 2022. Here is the PDF copy of the Wage Order No. 23.

For instance, Curdapia T. Lapia is a minimum wage earner employee in NCR which currently receives PhP537.00 per day for her work. Thus:

For Work under the normal working day for eight hours

Old    –        PhP537.00

New   –        PhP570.00

For work during the regular holiday

Old    –        PhP1,074.00

New   –        PhP1,140.00

For work during the special day

Old    –        PhP698.10

New   –        PhP741.00

For work during the rest day

Old    –        PhP698.10

New   –        PhP741.00

For work during the holiday falling on rest day

Old    –        PhP805.50

New   –        PhP855.00

For overtime work per hour during normal day

Old    –        PhP83.91 per hour

New   –        PhP89.06 per hour

For overtime work per hour during any holiday

Old    –        PhP87.26 per hour

New   –        PhP92.62 per hour

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

Read more on procedural due process discussion by Atty. Elvin:

Read more on procedural due process by Atty. Villanueva:

Twin Requirements of Notice and Hearing

Procedural Due Process for Other Types of Employment

Notice to Explain: Contents and Requirements