E.

OVERTIME (Article 87, Labor Code)

What are some basic principles on overtime work?
1. Work rendered after normal eight (8) hours of work is called “overtime work.”
2. In computing overtime work, "regular wage" or "basic salary" means "cash" wage only
without deduction for facilities provided by the employer.
3. "Premium pay" means the additional compensation required by law for work
performed within eight (8) hours on non-working days, such as regular holidays,
special holidays and rest days.
4. "Overtime pay" means the additional compensation for work performed beyond eight
(8) hours.
5. Illustrations on how overtime is computed:
a) For overtime work performed on an ORDINARY DAY , the overtime pay is plus 25% of
the basic hourly rate.
b) For overtime work performed on a REST DAY OR ON A SPECIAL DAY , the overtime
pay is plus 30% of the basic hourly rate which includes 30% additional compensation
as provided in Article 93 [a] of the Labor Code.
c) For overtime work performed on a REST DAY WHICH FALLS ON A SPECIAL DAY ,
the overtime pay is plus 30% of the basic hourly rate which includes 50% additional
compensation as provided in Article 93 [c] of the Labor Code.
d) For overtime work performed on a REGULAR HOLIDAY , the overtime pay is plus
30% of the basic hourly rate which includes 100% additional compensation as
provided in Article 94 [b] of the Labor Code.
e) For overtime work performed on a REST DAY WHICH FALLS ON A REGULAR
HOLIDAY , the overtime pay is plus 30% of the basic hourly rate which includes
160% additional compensation.
What is the distinction between PREMIUM PAY and OVERTIME PAY?
“Premium pay” refers to the additional compensation required by law for work performed
within the eight (8) normal hours of work on non-working days, such as rest days and
regular and special holidays.
“Overtime pay” refers to the additional compensation for work performed beyond the eight
(8) normal hours of work on a given day. An employee is entitled to both premium pay and
overtime pay if he works on a non-working day and renders overtime work on the same
day.
What is built-in overtime pay?
In case the employment contract stipulates that the compensation includes built-in
overtime pay and the same is duly approved by the DOLE, the non-payment by the
employer of any overtime pay for overtime work is justified and valid.
What is emergency overtime work? (Article 89, Labor Code).
a. General rule.
The general rule is that no employee may be compelled to render overtime work against his
will. The reason is that this will constitute involuntary servitude.
 b. Exceptions when employee may be compelled to render overtime work:
1. 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;
2. When overtime work is necessary to prevent loss of life or property or in case of
imminent danger to public safety due to actual or impending emergency in the
locality caused by serious accident, fire, floods, typhoons, earthquake, epidemic or
other disasters or calamities;
3. When there is urgent work to be performed on machines, installations or equipment,
or in order to avoid serious loss or damage to the employer or some other causes of
similar nature;
4. When the work is necessary to prevent loss or damage to perishable goods;
5. When the completion or continuation of work started before the 8 th hour is
necessary to prevent serious obstruction or prejudice to the business or operations of
the employer; and
6. When overtime work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon.
May an employee validly refuse to render overtime work under any of the afore-said
circumstances?
No. When an employee refuses to render emergency overtime work under any of the
foregoing conditions, he may be dismissed on the ground of insubordination or willful
disobedience of the lawful order of the employer.
Can overtime pay be waived?
No. The right to claim overtime pay is not subject to a waiver. Such right is governed by law
and not merely by the agreement of the parties.
F. COMPUTATION OF ADDITIONAL COMPENSATION (RATES ONLY)
1. How is premium pay for REGULAR HOLIDAYS computed?
 If the employee did not work , he/she shall be paid 100 percent of his/her salary for
that day. Computation: (Daily rate + Cost of Living Allowance) x 100%. The COLA is
included in the computation of regular holiday pay.
 If the employee worked , he/she shall be paid 200 percent of his/her regular salary
for that day for the first eight hours. Computation: (Daily rate + COLA) x 200%. The
COLA is also included in computation of regular holiday pay.
 If the employee worked in excess of eight hours (overtime work), he/she shall be paid
an additional 30 percent of his/her hourly rate on said day. Computation: Hourly
rate of the basic daily wage x 200% x 130% x number of hours worked.
 If the employee worked during a regular holiday that also falls on his/her rest day,
he/she shall be paid an additional 30 percent of his/her daily rate of 200 percent.
Computation: (Daily rate + COLA) x 200%] + (30% [Daily rate x 200%)].
 If the employee worked in excess of eight hours (overtime work) during a regular
holiday that also falls on his/her rest day, he/she shall be paid an additional 30
percent of his/her hourly rate on said day. Computation: (Hourly rate of the basic
daily wage x 200% x 130% x 130% x number of hours worked);
Simplified Computation:
a. If work is rendered on an employee’s regular workday –
 If unworked – 100%
 If worked – 1st 8 hours – 200%
 Work in excess of 8 hours – plus 30% of hourly rate on said day

b. If it is an employee’s rest day –

 If unworked – 100%
 If worked – first 8 hours – plus 30% of 200%
 Work in excess of 8 hours – plus 30% of hourly rate on said day
2. How is premium pay for SPECIAL (NON-WORKING) DAYS OR SPECIAL HOLIDAYS
computed?
If the employee did not work, the “no work, no pay” principle shall apply, unless there is a
favorable company policy, practice, or CBA granting payment on a special day.
If the employee worked, he/she shall be paid an additional 30 percent of his/her daily rate
on the first eight hours of work. Computation: [(Daily rate x 130%) + COLA).
If the employee worked in excess of eight hours (overtime work), he/she shall be paid an
additional 30 percent of his/her hourly rate on said day. Computation: (Hourly rate of the
basic daily wage x 130% x 130% x number of hours worked).
f the employee worked during a special day that also falls on his/her rest day, he/she shall
be paid an additional fifty percent of his/her daily rate on the first eight hours of work.
Computation: [(Daily rate x 150%) + COLA].
If the employee worked in excess of eight hours (overtime work) during a special day that
also falls on his/her rest day, he/she shall be paid an additional 30 percent of his/her
hourly rate on said day. Computation: (Hourly rate of the basic daily wage x 150% x 130%
x number of hours worked).
Simplified Computation:
a. If unworked –
 No pay, except if there is a company policy, practice, or collective bargaining
agreement (CBA) which grants payment of wages on special days even if unworked.

b. If worked –
 First 8 hours – plus 30% of the daily rate of 100%
 Work in excess of 8 hours – plus 30% of hourly rate on said day

c. If falling on the employee’s rest day and if worked -

 First 8 hours – plus 50% of the daily rate of 100%
 Work in excess of 8 hours – plus 30% of hourly rate on said day.
3. What are the effects of absences on the computation of holiday pay?
1. Employees on leave of absence with pay - entitled to holiday pay when they are on
leave of absence with pay.
 2. Employees on leave of absence without pay on the day immediately preceding the
regular holiday - may not be paid the required holiday pay if they have not worked on
such regular holiday.
3. Employees on leave while on SSS or employee’s compensation benefits - Employers
should grant the same percentage of the holiday pay as the benefit granted by
competent authority in the form of employee’s compensation or social security
payment, whichever is higher, if they are not reporting for work while on such
benefits.
4. When day preceding regular holiday is a non-working day or scheduled rest day -
should not be deemed to be on leave of absence on that day, in which case,
employees are entitled to the regular holiday pay if they worked on the day
immediately preceding the non-working day or rest day.
FACILITIES VS. SUPPLEMENTS
What are facilities?
“Facilities” include articles or services for the benefit of the employee or his family but does
not include tools of the trade or articles or services primarily for the benefit of the employer
or necessary to the conduct of the employer’s business. They are items of expense
necessary for the laborer’s and his family’s existence and subsistence which form part of
the wage and when furnished by the employer, are deductible therefrom, since if they are
not so furnished, the laborer would spend and pay for them just the same.
What are supplements?
The term “supplements” means extra remuneration or special privileges or benefits given to
or received by the laborers over and above their ordinary earnings or wages .
What are the distinctions between facilities and supplements?
The benefit or privilege given to the employee which constitutes an extra remuneration over
and above his basic or ordinary earning or wage is supplement ; and when said benefit or
privilege is made part of the laborer’s basic wage, it is a facility . The criterion is not so
much with the kind of the benefit or item (food, lodging, bonus or sick leave) given but its
purpose . Thus, free meals supplied by the ship operator to crew members, out of necessity,
cannot be considered as facilities but supplements which could not be reduced having been
given not as part of wages but as a necessary matter in the maintenance of the health and
efficiency of the crew during the voyage.
What is the rule on deductibility of facilities and supplements?
Facilities are deductible from wage but not supplements.
G. REST PERIODS
1. WEEKLY REST DAY
What is the duration of weekly rest period?
It shall be the duty of every employer, whether operating for profit or not , to provide each
of his employees a rest period of not less than twenty-four (24) consecutive hours after
every six (6) consecutive normal work days.
Is the employer’s prerogative to determine the rest period of its employees subject to
limitations?
Yes. The employer shall determine and schedule the weekly rest day of his employees
subject to CBA and to such rules and regulations as the DOLE Secretary may provide.
However, the employer shall respect the preference of employees as to their weekly rest day
when such preference is based on religious grounds.
2. EMERGENCY REST DAY WORK
When can an employer require work on a rest day?
The employer may require any of its employees to work on their scheduled rest day for the
duration of the following emergency and exceptional conditions:
a) 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 in case of force majeure or imminent danger to public safety;
b) In case of urgent work to be performed on machineries, equipment, or installations,
to avoid serious loss which the employer would otherwise suffer;
c) In the event of abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures;
d) To prevent serious loss of perishable goods;
e) Where the nature of the work is such that the employees have to work continuously
for seven (7) days in a week or more, as in the case of the crew members of a vessel to
complete a voyage and in other similar cases; and
f) When the work is necessary to avail of favorable weather or environmental conditions
where performance or quality of work is dependent thereon.
H. HOLIDAYS
1. What are the regular and special holidays?
(a) Regular Holidays
 New Year's Day - January 1
 Maundy Thursday - Movable Date
 Good Friday - Movable Date
 Eidul Fitr - Movable Date
 Eidul Adha - Movable Date
 Araw ng Kagitingan - Monday nearest April 9
 Labor Day - Monday nearest May 1
 Independence Day - Monday nearest June 12
 National Heroes Day - Last Monday of Augus
 Bonifacio Day - Monday nearest November 30
 Christmas Day - December 25
 Rizal Day - Monday nearest December 30
(b) Nationwide Special Holidays
 Ninoy Aquino Day - Monday nearest August 21
  All Saints’ Day - November 1
 Feast of Immaculate
 Conception of Mary - December 8
 Last Day of the Year - December 31
2. How many are the guaranteed paid regular holidays?
There are twelve (12) paid regular holidays in a year. This is important for purposes of
reckoning certain divisors and computation of employee benefits. The provision on holiday
pay is mandatory, regardless of whether an employee is paid on a monthly or daily basis.
3. What is the Holiday Pay Rule?
“Holiday pay” refers to the payment of the regular daily wage for any unworked regular
holiday. 2 The Holiday Pay Rule, therefore, applies to entitlement to holiday pay during
regular holidays and not during special non-working days. Thus, every employee covered by
the Holiday Pay Rule is entitled to the minimum wage rate (Daily Basic Wage and COLA) .
This means that the employee is entitled to at least 100% of his minimum wage rate even if
he did not report for work, provided he is present or is on leave of absence with pay on the
workday immediately preceding the holiday. Should the worker work on that day, such
work performed on that day would merit at least twice or two hundred percent (200%) of
the wage rate of the employee.
4. What is the coverage of the Holiday Pay Rule? Who are exempted employees?
As a general rule, the holiday pay benefit is applicable to all employees. The following,
however, are not covered by this benefit as they are considered exempted employees:
1. Government employees, whether employed by the National Government or any of its
political subdivisions, including those employed in government-owned and/or
controlled corporations with original charters or created under special laws
2. Those of retail and service establishments regularly employing less than ten (10)
workers;
3. Kasambahay and persons in the personal service of another;
4. Managerial employees, if they meet all of the following conditions:
 Their primary duty is to manage the establishment in which they are employed or of
a department or subdivision thereof;
 They customarily and regularly direct the work of two or more employees therein; and
 They have the authority to hire or fire other employees of lower rank; or their
suggestions and recommendations as to hiring, firing, and promotion, or any other
change of status of other employees are given particular weight.

5. Officers or members of a managerial staff, if they perform the following duties and
responsibilities:
 Primarily perform work directly related to management policies of their employer;
 Customarily and regularly exercise discretion and independent judgment;
 Regularly and directly assist a proprietor or managerial employee in the management
of the establishment or subdivision thereof in which he or she is employed; or (b)
execute, under general supervision, work along specialized or technical lines
 requiring special training, experience, or knowledge; or (c) execute, under general
supervision, special assignments and tasks; and
 Do not devote more than twenty percent (20%) of their hours worked in a workweek
to activities which are not directly and closely related to the performance of the work
described in paragraphs 5.1, 5.2, and 5.3 above.

6. Field personnel and other employees whose time and performance are unsupervised
by the employer, including those who are engaged on task or contract basis, purely
commission basis or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof.
I. SERVICE INCENTIVE LEAVE
1. What is service incentive leave?
Every covered employee who has rendered at least one (1) year of service is entitled to a
yearly service incentive leave of five (5) days with pay.
The term “at least one year of service” should mean service within twelve (12) months,
whether continuous or broken, reckoned from the date the employee started working,
including authorized absences and paid regular holidays, unless the number of working
days in the establishment as a matter of practice or policy, or that provided in the
employment contract, is less than twelve (12) months, in which case, said period should be
considered as one (1) year for the purpose of determining entitlement to the service
incentive leave benefit.
2. Who are excluded from its coverage?
All employees are covered by the rule on service incentive leave except:
1. Government employees, whether employed by the National Government or any of its
political subdivisions, including those employed in government-owned and/or
controlled corporations with original charters or created under special laws;
2. Persons in the personal service of another;
3. Managerial employees, if they meet all of the following conditions:
 Their primary duty is to manage the establishment in which they are employed or of
a department or subdivision thereof;
 They customarily and regularly direct the work of two or more employees therein; and
 They have the authority to hire or fire other employees of lower rank; or their
suggestions and recommendations as to hiring, firing, and promotion, or any other
change of status of other employees are given particular weight.
4. Officers or members of a managerial staff, if they perform the following duties and
responsibilities:
 Primarily perform work directly related to management policies of their employer;
 Customarily and regularly exercise discretion and independent judgment;
o Regularly and directly assist a proprietor or managerial employee in the
management of the establishment or subdivision thereof in which he or she is
employed; or (b) execute, under general supervision, work along specialized or
technical lines requiring special training, experience, or knowledge; or (c)
execute, under general supervision, special assignments and tasks; and
  Do not devote more than twenty percent (20%) of their hours worked in a workweek
to activities which are not directly and closely related to the performance of the work
described in paragraphs 4.1, 4.2, and 4.3 above;
5. Field personnel and those whose time and performance are unsupervised by the
employer, 2 including those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof;
6. Those already enjoying this benefit;
7. Those enjoying vacation leave with pay of at least five (5) days; and
8. Those employed in establishments regularly employing less than ten (10) employees.
3. Are KASAMBAHAYS entitled to SIL?
Yes, but the grant of 5-day SIL to domestic workers or kasambahays is not based on Article
95 of the Labor Code but on the following provision of R.A. 10361
“SEC. 29. Leave Benefits. – A domestic worker who has rendered at least one (1) year of
service shall be entitled to an annual service incentive leave of five (5) days with pay:
Provided , That any unused portion of said annual leave shall not be cumulative or carried
over to the succeeding years. Unused leaves shall not be convertible to cash.
4. Are unavailed service incentive leaves commutable to cash?
Yes. The service incentive leave is commutable to its money equivalent if not used or
exhausted at the end of the year.
J. SERVICE CHARGE
1. What is the newest law on service charges?
R.A. No. 11360 which was approved on August 07, 2019. It amended Article 96 of the
Labor Code. It thus now states:
"ART. 96. Service Charges. - All service charges collected by hotels, restaurants and similar
establishments shall be DISTRIBUTED COMPLETELY AND EQUALLY AMONG THE
COVERED WORKERS EXCEPT MANAGERIAL EMPLOYEES.
"In the event that the minimum wage is increased by law or wage order, service charges
paid to the covered employees shall not be considered in determining the employer's
compliance with the increased minimum wage.
"To facilitate resolution of any dispute between the management and the employees on the
distribution of service charges, a grievance mechanism shall be established. If no grievance
mechanism is established or if inadequate, the grievance shall be referred to the regional
office of the Department of Labor and Employment which has jurisdiction over the
workplace for conciliation.
"For purposes of this Article, managerial employees refer to any person vested with powers
or prerogatives to lay down and execute management policies or hire, transfer, suspend,
lay-off, recall, discharge, assign or discipline employees or to effectively recommend such
managerial actions."
2. What are the kinds of establishment covered by the law on service charge?
The rules on service charge apply only to establishments collecting service charges, such as
hotels, restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, bars,
casinos and gambling houses, and similar enterprises, including those entities operating
primarily as private subsidiaries of the government
3. Who are the employees covered by this law?
With the latest amendatory law cited above, all service charges collected by hotels,
restaurants and similar establishments shall be distributed completely and equally among
the covered workers except managerial employees.
4. Who are not covered?
Specifically excluded from coverage are managerial employees, referring to any person
vested with powers or prerogatives to lay down and execute management policies or hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees or to effectively
recommend such managerial actions.
K. 13TH MONTH PAY
Who are covered by the 13th month pay law?
Only rank-and-file employees, regardless of their designation or employment status and
irrespective of the method by which their wages are paid, are entitled to the 13 th month
pay benefit. Managerial employees are not entitled to 13 th month pay.
What is the minimum period of service required in a calendar year to be entitled to 13 th
month pay?
To be entitled to the 13th month pay benefit, it is imposed as a minimum service
requirement that the employee should have worked for at least one (1) month during a
calendar year.
When should 13th month pay be paid?
It must be paid not later than December 24 of every year.
Who are excluded from its coverage?
The following employers are not covered by the 13 th month pay law:
1. The government and any of its political subdivisions, including government-owned
and controlled corporations, except those corporations operating essentially as
private subsidiaries of the government.
2. Employers already paying their employees 13 th month pay or more in a calendar
year or its equivalent at the time of the issuance of the Revised Guidelines.
3. Employers of those who are paid on purely commission, boundary, or task basis, and
those who are paid a fixed amount for performing a specific work, irrespective of the
time consumed in the performance thereof, except where the workers are paid on
piece-rate basis, in which case, the employer shall be covered by the Revised
Guidelines insofar as such workers are concerned. Workers paid on piece- rate basis
shall refer to those who are paid a standard amount for every piece or unit of work
produced that is more or less regularly replicated without regard to the time spent in
producing the same.
Are domestic workers or Kasambahays covered?
Yes. They are now covered under the Kasambahay Law.
Are extras, casuals and seasonal employees entitled to 13th month pay?
Yes, they are entitled thereto.
Is 13th month pay part of wage?
13th month pay which is in the nature of additional income, is based on wage but not part
of wage.
What is the minimum amount of the 13th month pay?
The minimum 13th month pay should not be less than one-twelfth (1/12) of the total basic
salary earned by an employee within a calendar year.
What is meant by “basic salary” or “basic wage”?
“Basic salary” or “basic wage” contemplates work within the normal eight (8) working hours
in a day. This means that the basic salary of an employee for purposes of computing the
13th month pay should include all remunerations or earnings paid by the employer for
services rendered during normal working hours.
For purposes of computing the 13th month pay, “basic salary” should be interpreted to
mean not the amount actually received by an employee, but 1/12 of their standard monthly
wage multiplied by their length of service within a given calendar year.
B. WAGES
1. PAYMENT OF WAGES
What is the basic distinction between wage and salary?
The term “wage” is used to characterize the compensation paid for manual skilled or
unskilled labor. “Salary,” on the other hand, is used to describe the compensation for
higher or superior level of employment.
What is the distinction in respect to execution, attachment or garnishment?
In cases of execution, attachment or garnishment of the compensation of an employee
received from work issued by the court to satisfy a judicially-determined obligation, a
distinction should be made whether such compensation is considered “wage” or “salary.”
Under Article 1708 of the Civil Code, if considered a “wage,” the employee’s compensation
shall not be subject to execution or attachment or garnishment, except for debts incurred
for food, shelter, clothing and medical attendance. If deemed a “salary,” such compensation
is not exempt from execution or attachment or garnishment. Thus, the salary, commission
and other remuneration received by a managerial employee (as distinguished from an
ordinary worker or laborer) cannot be considered wages. Salary is understood to relate to a
position or office, or the compensation given for official or other service; while wage is the
compensation for labor.
What are the attributes of wage?
“Wage” has the following attributes:
1. It is the remuneration or earnings, however designated, for work done or to be done
or for services rendered or to be rendered;
2. It is capable of being expressed in terms of money, whether fixed or ascertained on a
time, task, piece or commission basis, or other method of calculating the same;
3. It is payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done or for services rendered or to be rendered;
and
4. It includes the fair and reasonable value, as determined by the DOLE Secretary, of
board, lodging, or other facilities customarily furnished by the employer to the
employee. “Fair and reasonable value” shall not include any profit to the employer or
to any person affiliated with the employer.
What is basic wage?
“Basic wage” means all the remuneration or earnings paid by an employer to a worker for
services rendered on normal working days and hours but does not include cost-of-living
allowances, profit-sharing payments, premium payments, 13 th month pay or other
monetary benefits which are not considered as part of or integrated into the regular salary
of the workers.
Further, as held in Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, the
following should be excluded from the computation of “basic salary,” to wit: payments for
sick, vacation and maternity leaves, night differentials, regular holiday pay and premiums
for work done on rest days and special holidays.
What is minimum wage?
The minimum wage rates prescribed by law shall be the basic cash wages without
deduction therefrom of whatever benefits, supplements or allowances which the employees
enjoy free of charge aside from the basic pay.
What is statutory minimum wage?
The term “statutory minimum wage” refers simply to the lowest basic wage rate fixed by law
that an employer can pay his workers.
What is regional minimum wage rate?
The term “regional minimum wage rates” refers to the lowest basic wage rates that an
employer can pay his workers, as fixed by the Regional Tripartite Wages and Productivity
Boards (RTWPBs), and which shall not be lower than the applicable statutory minimum
wage rates.
What are included/excluded in the term “wage rate”?
The term "wage rate" includes cost-of-living allowances as fixed by the RTWPB, but
excludes other wage-related benefits such as overtime pay, bonuses, night shift differential
pay, holiday pay, premium pay, 13th month pay, premium pay, leave benefits, among
others.
Can COLA be integrated into the minimum wage?
Yes. The cost-of-living allowance (COLA) may be ordered integrated into the minimum wage
by the Regional Tripartite Wages and Productivity Board ( “RTWPB” or “Regional Board” ).
What is COLA?
COLA is not in the nature of an allowance intended to reimburse expenses incurred by
employees in the performance of their official functions. It is not payment in consideration
of the fulfillment of official duty. As defined, “cost of living” refers to “the level of prices
relating to a range of everyday items” or “the cost of purchasing the goods and services
which are included in an accepted standard level of consumption.” Based on this premise,
COLA is a benefit intended to cover increases in the cost of living.
What is the “NO WORK, NO PAY” principle?
The “no work, no pay” or “fair day’s wage for fair day’s labor” means that if the worker does
not work, he is generally not entitled to any wage or pay. The exception is when it was the
employer who unduly prevented him from working despite his ableness, willingness and
readiness to work; or in cases where he is illegally locked out or illegally suspended or
illegally dismissed, or otherwise illegally prevented from working, in which event, he should
be entitled to his wage.
2. PROHIBITIONS REGARDING WAGES (See Articles 112 to 119 of the Labor Code)
(1) NON-INTERFERENCE BY EMPLOYER IN THE DISPOSAL BY EMPLOYEES OF THEIR
WAGES.
No employer is allowed to limit or otherwise interfere with the freedom of any employee to
dispose of his wages and no employer shall in any manner oblige any of his employees to
patronize any store or avail of the services offered by any person.
(2) WAGES NOT SUBJECT TO EXECUTION OR ATTACHMENT; EXCEPTION.
The general rule is that laborer’s wages are not subject to execution or attachment. The
exception is when such execution or attachment is made for debts incurred for food,
shelter, clothing and medical attendance.
(3) PROHIBITION ON DEDUCTIONS FROM WAGES.
May employer deduct from wage of employees?
The general rule is that an employer, by himself or through his representative, is
PROHIBITED from making any deductions from the wages of his employees. The employer
is not allowed to make unnecessary deductions without the knowledge or authorization of
the employees.
Are there EXCEPTIONS to this rule?
Yes.
In cases where the worker is insured with his consent by the employer, and the deduction
is to recompense the employer for the amount paid by him as premium on the insurance;
For union dues, in cases where the right of the worker or his union to check-off has been
recognized by the employer or authorized in writing by the individual worker concerned;
and
a) In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium
on the insurance;
b) For union dues, in cases where the right of the worker or his union to check-off
has been recognized by the employer or authorized in writing by the individual
worker concerned; and
c) In cases where the employer is authorized by law or regulations issued by the
DOLE Secretary.
d) Deductions for loss or damage under Article 114 of the Labor Code;
e) Deductions made for agency fees from non-union members who accept the
benefits under the CBA negotiated by the bargaining union. This form of
deduction does not require the written authorization of the non-bargaining union
member concerned;
f) Deductions for value of meal and other facilities
g) Deductions for premiums for SSS, PhilHealth, employees’ compensation and Pag-
IBIG;
h) Withholding tax mandated under the National Internal Revenue Code (NIRC);
i) Withholding of wages because of the employee’s debt to the employer which is
already due;
j) Deductions made pursuant to a court judgment against the worker under
circumstances where the wages may be the subject of attachment or execution
but only for debts incurred for food, clothing, shelter and medical attendance;
k) When deductions from wages are ordered by the court;
(4) PROHIBITION AGAINST DEPOSIT REQUIREMENT.
Article 114 of the Labor Code prohibits the employer to require that workers should make a
deposit from which deductions shall be made for the reimbursement of loss of tools,
materials or equipment supplied by him, or any damages thereto.
PERMISSIBLE DEDUCTIONS FOR LOSS OR DAMAGES.
If the employer is engaged in a trade, occupation or business where there is such practice
of making deductions or requiring deposits to answer for the reimbursement of loss of or
damage to tools, materials or equipment supplied by the employer to the employee.