Overtime pay

PurposeThe objectives of pay review are

to reward employees in accordance with their responsibilities and performance throughout the year, and to review their remuneration against the market so that they are rewarded equitably internally and competitively with the market.

Eligibility It is not mandatory for THE COMPANY

to conduct pay review for individual employees. Generally, employees who have successfully completed the probationary period after 6 months or less may be considered for pay review. Employees who are not entitled to pay review or have submitted their resignation letters prior to the formal notification of the pay adjustment will not be granted any increase.

PAY REVIEWThe pay review will normally be

conducted on 1 January each year. Justification should be made for any exceptional pay increase or promotion. As recommendations for pay review and promotion are subject to final approval of the Chief Executive and the Executive Committee, administrative officers should not make any premature commitment or disclosure to employees.

Common practiceIt is the management's responsibility to ensure

that overtime work is only performed when necessary and unavoidable. Regular or perpetual overtime is discouraged and considered inappropriate. Management should review the circumstances leading to regular overtime and should look for other means to alleviate the situation. Consideration should be given to "shift" or staggered working hours. Prior approval from supervisors is required for performance of overtime work with compensation. Overtime work should be compensated by compensation leave whenever situation permits.

Overtime Payment  Eligible employees may be compensated by overtime

payment whenever compensation leave cannot be granted. Eligible employees may apply for overtime payment provided that they work for at least one hour beyond the normal working hours. After the first hour of overtime, the payment is calculated on a half-hourly basis. It is computed by multiplying the overtime rate with the number of hours in excess of the regular eight hours of work. Any work performed beyond the normal 8 hours of work in one workday is considered as overtime work.

All employees required to work beyond eight hours in one workday is entitled to overtime pay. The basis of overtime pay is found in Article 87 of the Labor Code.

Overtime Work Work may be performed beyond eight

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

Overtime Pay ratesOvertime pay rates depend upon the day

the work is performed, whether it is ordinary working day, special day, holiday or rest day.

 For ordinary working day, an additional compensation equivalent to his regular hourly rate plus at least 25% thereof.

For holiday, special day and rest day, an additional compensation equivalent to the rate for the first eight hours on a holiday or rest day plus at least 30% thereof.

Computation On an ordinary day, the overtime rate per hour

is determined as follows: First, compute the hourly rate of the employee: Regular hourly rate = Minimum wage rate ÷ 8

hours = P267 ÷ 8 hours = P33.375 per hour

Now to determine overtime rate per hour: Overtime rate = Regular hourly rate + 25% of

Regular hourly rate Overtime rate = P33.375 + (25% of P33.375) = P33.375 + 8.34= P41.72 per hour

On a Rest day, the overtime rate per hour is determined as follows:

Hourly rate = 130% of Regular hourly rate (P33.375 x 1.30)= P33.375 + 43.3875= P76.76 per hour (Note: The hourly rate on rest day and special day is 130% of the regular rate.)

On a Regular Holiday, the overtime rate per hour is determined as follows:

Hourly rate = 200% of Regular hourly rate = P33.375 x 2 = P66.75 per hour

To determine overtime rate per hour: Overtime rate = Hourly rate + 30% of

Hourly rate = P66.375 + (30% of P66.375) = P66.375 + 19.9125= P86.28 per hour

Self-checkCompute the overtime pay of a

worker with a daily rate of P365 at a Regular holiday.

Compute the overtime pay of a worker with a daily rate of P250 who worked 4 hours overtime.