Premium Pay: My employer wants me to work on my rest day

Written by

admin

in

on

Sometimes we are faced with unavoidable circumstances that require us to work during our off days like, rest days and special non-working days. While it certainly is unfortunate that we need to spend our free time at work, Philippine labor laws try to ease this burden by making employers, who ask their employees to come in on their off days, pay additional compensation called premium pay.

What is Premium Pay?

According to the 2024 Edition of the Workers Statutory Monetary Benefits Handbook, Premium Pay refers to the additional compensation for work performed within eight hours on rest days and special non-working days. This includes regular holidays that fall on a rest day but excludes regular holidays that do not fall on a rest day as those are covered by Holiday Pay. Regular holidays that fall on a rest day are treated like rest days. Regular holidays are different from special non-working days.

Here are some common examples of special non-working days:

  • Ninoy Aquino Days – August 21
  • All Saints’ Day – November 1
  • Feast of the Immaculate Conception or Mary – December 8
  • Last Day of the Year – December 31

Generally, All employees are qualified for Premium Pay, however, there are a few exceptions. The following employees are not qualified for Premium Pay.

  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. 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
    • 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
  3. 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
      • execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; or
      • execute, under general supervision, special assignments and tasks
    • Do not devote more than 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 item 3 above
  4. Kasambahay and persons in the personal service of another
  5. Workers who are paid by results, including those who are paid on piece rate, takay, pakyaw, or task basis, and other non-time work, if their output rates are in accordance with the standards prescribed in the regulations, or where such rates have been fixed by the Secretary of Labor and Employment
  6. Field personnel, if they regularly perform their duties away from the principal or branch office or place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.

Source: https://bwc.dole.gov.ph/wp-content/uploads/2024/10/Workers-Statutory-Monetary-Benefits-Handbook-2024-Edition.pdf

As an employee, if you were required to work on your rest day or on a special non-working day, you are entitled to premium pay. However, it is crucial that you have official authorization to render work on those days. If you did not receive prior approval, or were not required or permitted to work, you may not be entitled to premium pay, even if your work benefited your employer.

As an employer, requiring your employees to render work on their rest day or on a special non-working day will have cost implications. When you give permission to an employee to work on a rest day or a special non-working day, you will be required to compensate the employee for the hours they have rendered even if the work performed was not critical and could have waited until the next working day.

Usually Premium Pay is only given if there were actual hours rendered. However, Premium Pay may also be given in the case where a favorable policy or collective bargaining agreement is in place, which provides for the payment of Premium Pay even if no hours have been rendered.

How much is Premium Pay?

To compute Premium Pay, first determine the type of day an employee has worked. After determining the type of day, multiple the prescribed additional compensation multipliers to their basic wage to come up with their Premium Pay.

Here are the prescribed additional compensation multipliers:

  1. Regular Rest Day – 130%
  2. Special Non-Working Day – 130%
  3. Special Non-Working Day that falls on a Rest Day – 150%
  4. Regular Holiday that falls on a Rest Day – 200% (Regular Holiday) x 130% (Rest Day) or 260%

It is also important to determine if an employee is monthly-paid or daily-paid since monthly-paid employees are considered paid for the whole year, all 365 days, their monthly rate already includes the 100% basic wage for Rest Days and Special Non-Working Days, which means they will only receive the additional 30% or 50% respectively, as opposed to daily-paid employees who will be receiving the whole 130% or 150% since they are not considered paid on Rest Days or Special Non-Working Days.

Here are sample computations:

For Daily-Paid Employees, that worked 5 hours on their rest day.

  1. Daily Rate: Php 513.00
  2. Hourly Rate: 513.00 / 8 = Php 64.13
  3. Basic Wage for 5 hours: 64.13 x 5 = 320.65
  4. Multiply the prescribed compensation multiplier (Rest Day): 320.65 * 1.3 = Php 416.85

For Daily-Paid Employees, that worked 5 hours on a special non-working day that falls on their rest day.

  1. Daily Rate: Php 513.00
  2. Hourly Rate: 513.00 / 8 = Php 64.13
  3. Basic Wage for 5 hours: 64.13 x 5 = 320.65
  4. Multiply the prescribed compensation multiplier (Special Non-Working Day + Rest Day): 320.65 * 1.5 = Php 480.98

For Daily-Paid Employees, that worked 5 hours on a regular holiday that falls on their rest day.

  1. Daily Rate: Php 513.00
  2. Hourly Rate: 513.00 / 8 = Php 64.13
  3. Basic Wage for 5 hours: 64.13 x 5 = 320.65
  4. Multiply the prescribed compensation multiplier (Regular Holiday + Rest Day): 320.65 * 2 * 1.3 = Php 833.69
  5. Add the remaing 3 hrs of holiday pay: 833.69 + 192.39 = Php 1,026.08

For Monthly-Paid Employees, that worked 5 hours on their rest day.

  1. Daily Rate: Php 513.00
  2. Hourly Rate: 513.00 / 8 = Php 64.13
  3. Basic Wage for 5 hours: 64.13 x 5 = 320.65
  4. Multiply the prescribed compensation multiplier (Rest Day): 320.65 * 1.3 = Php 416.85
  5. Less the Basic Wage portion that is already part of their monthly compensation: 416.85 – 320.65 = Php 96.2 – this will be the additional pay in the payslip
  6. Add the Daily Rate that is part of their monthly compensation: 96.2 + 513.00 = Php 609.2 – this will be the total pay for the day for comparison purposes

For Monthly-Paid Employees, that worked 5 hours on a special non-working day that falls on their rest day.

  1. Daily Rate: Php 513.00
  2. Hourly Rate: 513.00 / 8 = Php 64.13
  3. Basic Wage for 5 hours: 64.13 x 5 = 320.65
  4. Multiply the prescribed compensation multiplier (Special Non-Working Day + Rest Day): 320.65 * 1.5 = Php 480.98
  5. Less the Basic Wage portion that is already part of their monthly compensation: 480.98 – 320.65 = Php 160.33 – this will be the additional pay in the payslip
  6. Add the Daily Rate that is part of their monthly compensation: 160.33 + 513.00 = Php 673.33 – this will be the total pay for the day for comparison purposes

For Monthly-Paid Employees, that worked 5 hours on a regular holiday that falls on their rest day.

  1. Daily Rate: Php 513.00
  2. Hourly Rate: 513.00 / 8 = Php 64.13
  3. Basic Wage for 5 hours: 64.13 x 5 = 320.65
  4. Multiply the prescribed compensation multiplier (Regular Holiday + Rest Day): 320.65 * 2 * 1.3 = Php 833.69
  5. Less the Basic Wage portion that is already part of their monthly compensation: 833.69 – 320.65 = Php 513.04 – this will be the additional pay in the payslip
  6. Add the Daily Rate that is part of their monthly compensation: 513.04 + 513.00 = Php 1,026.04 – this will be the total pay for the day for comparison purposes

Understanding and correctly applying employee compensation, like Premium Pay, is an important responsibility for employers in the Philippines. The Synergy Human Resource Information System (Synergy HRIS) helps simplify these challenges while offering accurate payroll processing and benefit administration, empowering employers to focus on their core business with peace of mind.