87. NIGHT SHIFT DIFFERENTIAL . The main question you have to ask is: what kind of non-working day is this? A shift differential is an extra bump in pay that some workers make for working outside of normal business hours. Moreover, work hours may fall under different categories, making computation more complex. 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. Regular holidays, such as Labor Day and Independence Day, tend to have fixed dates and are present ye… If your employee works beyond eight hours, you must pay overtime wages. 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. Source: Article 86, Labor Code of the Philippines 22009 Guidelines on the Adoption of Flexible Work Arrangements Part III, point 1. 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. 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. Overtime is beyond 8 hours in a single workday, except in flexible work arrangements such as compressed work week. In line with that, you should pay for their rendered service in … Overtime work. Art. 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. The personal and additional exemptions of employees previously available under R.A. 9504 were also removed. 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. DEPARTMENT OF LABOR AND EMPLOYMENT. 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; 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 Art. Accordingly, they are not entitled to holiday pay, overtime pay, premium pay, night shift differential pay, and service incentive leave. 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. 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. 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. 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 … Night shiftdifferential. When they work the night shift they are paid a shift differential of $2 an hour. 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; 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. 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. 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). Weekends–Saturday and Sunday–are usually allotted as rest days. When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. – 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 oclock in the evening and six oclock in the morning. However, suppose the employee also earns a shift differential for working weekends or the night shift, or a performance bonus, or a commission. However, the following employees are NOT entitled to … 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. For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. 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. If you find this site useful and want to show your support, feel free to … Industry sectors are segmented as follows: 1. 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. Is it a rest day, a regular holiday, or a special non-working day? Employee would be paid the overtime rate for the excess hours worked. 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 … Overtime pay, on the other hand, is additional pay for work performed beyond 8 hours in a day. The Law does not provide a limit on overtime work. If work is performed on a rest day which is also a special day, worker is paid 150% of the normal wage rate. *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? (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. Take note that it can fall into more than one category: it can be both a rest day and a regular holiday, for example. An employee is entitled to night pay for those hours that must be worked between 6 p.m. and 6 a.m. to complete an 8-hour daily tour of duty. How to Compute Overtime Pay All employees required to work beyond the normal 8 hours are entitled to overtime. This website does not show any ads or advertising materials for an ad-free reading experience of the readers. Overtime work. ..- - 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.- Employees who work between 10:00 PM and 6:00 AM are entitled to night shift differential. 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. When they work the evening shift, they are paid a shift differential of $1 an hour. Overtime Work Work may be performed beyond eight hours a day provided that the employee is paid for the overtime work, which consists of an additional compensation equivalent to his regular wage plus at least 25% thereof. Source: §86 of the Labour Code, as amended. *same monthly rate applied in the computation, Special day: (130% x basic pay)18,000 x 1.3 = Php23,400Special day premium pay: (i.e., 20 working days/month): 23,400/20=Php 1,170/day, Special day that coincided with a scheduled rest day: (150% x basic pay)18,000 x 1.5 = Php 27,000Special and rest day premium pay (i.e., 20 working days/month): 27,000/20= Php 1,350/day, What is the computation for overtime pay on a regular holiday? 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. 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. Most businesses will outline how shift differentials work, if they’re offered, in the employee handbook.Usually, however, differential No. Moreover, under time work on a day cannot be offset by overtime work on another day. When working overtime, RNs are paid time-and-one-half of their basic hourly rate of $22. Employees working anytime from 10 o’clock in the evening to 6 o’clock in the morning qualifies for the Night Shift Differential (NSD). 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. 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). Women and young persons are prohibited from night work. Ordinary day Overtime. Cottage and handicraft For example, on average, the minimum daily payroll in the Phili… Night shift differential. Retail and services 4. The employee will be paid according to the hours of work or rendered service. *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. 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: For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. What is the overtime pay computation for employees working on a night shift during a rest day? Rest periods of short duration during working hours are regarded as hours worked. 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. Notably, the MWE’s earnings from overtime, night shift differential, and hazard pay are not anymore exempt. 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. Processing of Payroll Calculating for your employees’ overtime, holiday, rest day, and/or night differential premiums is not a walk in the park. How many hours are allowed for overtime work?Employees can render up to eight (8) hours of 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. 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. 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. Working hours in the Philippines cannot exceed eight hours in a day, not including the mandatory one-hour lunch break. Non-agricultural 2. In fact, there are 32 different combinations at play. 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. 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. This extra pay needs to be added into the Regular Rate to make the overtime rate bigger. Republic of the Philippines. However, not all employees are entitled to night shift differential. COLA is not included in overtime calculation. One of the reasons is the night shift differential pay. What is the overtime pay computation for employees working on a night shift during a regular workday? 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. So if he or she worked for less than 8 hours, the compensation will be adjusted accordingly. 2. 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. The employer cannot use the offset to keep the company from compensating the employee with required overtime rates. Can an employee demand overtime work from the employer?The employee cannot urge or oblige the employer to let him or her to render overtime work if it is not required by the circumstance or there is no extra work to be done. Deduction of undertime must be based on the employee’s tardiness and salary. 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%. Women and young persons are prohibited from night work. Art. 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). 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. However, suppose the employee also earns a shift differential for working weekends or the night shift, or a performance bonus, or a commission. The working hours for kasambhay (domestic helpers) are 10 hours a day, exclusive of one hour breaks for each regular meal of the day. *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? 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