MODULE 8: Compensation and Employee Benefits

• Employee Benefits

  • They are typically membership-based offered to attract and keep employees rewards.
  • Do not directly affect a worker’s performance, but inadequate benefits lead to employee dissatisfaction
  • Benefit and service offerings add about 30% to an organization’s payroll cost.
  • Benefits become the focus of negotiations with employees when large wage and salary increases are not feasible.
• Benefits today reflect a diverse workforce.
• Challenge => designing a benefits package that is lawful andattractive.
• PURPOSE OF CONTEMPORARY BENEFITS OFFERINGS:

  • Meet legal requirements
  • Attract applicants and current workers
• Department of Labor and Employment (DOLE) => The labor laws in the Philippines are administered.
• The Philippines employee benefits all depend on which of the four kinds of employment arrangements is underway: regular, project-based, seasonal, and casual employment.
• General minimum conditions of employment in respect to working hours, rest periods, overtime age, night shift, holidays, and leave are codified in the Book 3 of the Philippines Labor Code. Exceptions can be made for managerial-ranked employees, field personnel, and some other workers.
• Statutory Benefits

  • Also known as mandatory benefits.
  • They are entitlements that employers are obligated by law to provide to their employees.
• Common examples include benefits like:

  • Paid annual leave
  • Parental leave
  • Worker's compensation insurance
  • Paid sick leave.
• Statutory and Common Employee Benefits (PH):

  • Social Security System (SSS)
  • Philhealth
  • PAG-IBIG
• Social Security System (SSS)

  • Social insurance covers private-sector employees, self-employed workers, as well as household workers.
  • A spouse of the insured person is also entitled to receive social benefits under this scheme.
• Social Security System Benefits include:

  • Maternity pay
  • Sickness pay
  • Pensions
  • Disability benefits
  • Salary loans
  • Life insurance
  • Funeral grants
• PhilHealth is the name of the health insurance plan in place for private employees in the Philippines.
• Both PhilHealth and Home Development Mutual Fund (Pag-IBIG) havechanged their contribution rates for 2024. They are as follows: PhilHealth:Contribution rate jumps from 4% to 5% of the employee's monthly salary
• PhilHealth covers inpatient benefits, outpatient benefits, Z benefits, and SDG benefits.
• Z benefits are offered to the patients who need prolonged hospitalization and more expensive treatment.
• SDG benefits include treatment packages for malaria, HIV-AIDS, tuberculosis, animal bites, and other diseases.
• Home Development Mutual Fund (HDMF)

  • Also known as Pag-IBIG fund, provides housing loans. It also offers financial assistance to Filipinos to enable them to afford decent housing.
  • Workers who earn less than PHP 1,500 a month contribute 1% of their salary to the Pag-IBIG fund. Workers who earn more contribute 2% of their monthly salary. Employers have to contribute 2% regardless of the salary bracket of the employee.
  • Pag-IBIG Fund increases its minimum monthly contribution rate from P200 to P400 effective February 2024, where P200 is collected from the employee and P200 from the employer.
• Working hours and holidays.

  • In the Philippines, an employee's regular hours of work are a maximum of eight hours a day, excluding an hour’s lunch break.
  • This does include short breaks for rest during the working hour.
• Weekly Rest Day => every employee in the Philippines is entitled to get 24 consecutive hours of rest after six consecutive working days.
• Public Holidays => The workers in the Philippines are entitled to two types of holidays: regular holidays and special holidays.
• Regular holidays: There are 12 paid public holidays.

  Special (non-working) holidays: On special (non-working) holidays, a no-work no-pay policy is applied. If these days are worked, they can be paid. There are six special holidays a year.
• Minimum wage

  • The minimum wage in the Philippines varies between regions. Each region's tripartite wage boards set the minimum wage rate, which ranges from PHP 282 and PHP 537 a day.
  • The minimum wage rate also depends on the industry sector. The industry sectors are broadly divided into agricultural and non-agricultural.
• When an employee spends more than the required eight hours working, he or she is entitled to additional pay, as below:

  • Night shifts
  • Overtime Pay
• Night shifts

  • The labor laws of the Philippines make it mandatory to pay night shift differential to the workers working between 10pm and 6pm. The nightshift differential must not be less than 10% of the worker's regular salary.
• Overtime

  • If an employee works more than eight hours on an ordinary workday, they are entitled to an extra 25% of their average hourly rate.
• Premium pay

  • Employees are eligible to receive premium pay for working on their rest days or special holidays.
  • If an employee needs to work on their rest day or special day, they receive an extra 30% of their daily salary.
  • If they work on a special day that is also their rest day, they get 50% extra payment.
  • If the work is performed on a regular holiday that is also a rest day, the employee gets a total of 260%.
• 13-month pay entitlement

  > The colloquially named “13 month salary” is a statutory requirement that employers must provide to certain employees.
• All non-management employees in the Philippines are entitled to receive 13th-month pay. This extra month of salary must be released by 24 December. Some employees opt to receive the payment into two installments — in May and December.
• Employers need to file a compliance report by 15 January of the following year to confirm payment has been made.
• Service incentive leave

  > Employers in the Philippines are obligated to grant five days of paid leave to every employee who has worked for at least one year. This can be used either as sick leave or vacation leave.
• Sick leave

  > Insured employees are entitled to receive at least 90% of their average daily wage if they get hospitalized or incapacitated at home for at least three days. The three-day waiting period does not apply to the cases of injuries and acute diseases.
• Maternity and paternity leave

  • The Maternity Benefit is granted to a qualified female worker in every instance of pregnancy, miscarriage or emergency termination of pregnancy regardless of frequency.
  • Married male workers can have seven days of paternity leave for the first four pregnancies of their wives.
  • Male workers can apply for paternal leave only when they are living with their spouse at the time of delivery or miscarriage.
• They need to apply for maternity and paternity leave within a reasonable period:

  ➢ 60 days for miscarriage/emergency termination of pregnancy

  ➢ 105 days for live childbirth (normal or caesarean section delivery)

  ➢ 120 days for solo parent under R.A. 8972 (Solo Parents' Welfare Act of 2000); 105 days + 15 days
• Solo parent leave

  Solo parents can take up to seven days’ leave to fulfill their parental duties, especially where physical presence is necessary. To be eligible for solo parent leave, one must work for at least one year, including holidays and authorized absence. This one-year period of service can be continuous or broken.
• Leave for victims of gender violence

  • In the Philippines, female workers who are the victims of violence are entitled to ten days of paid leave.
  • The violence may include physical, sexual, psychological, or economic abuse.
• Special leave for gynecological surgery

  Women requiring gynecological surgery who have worked for at least six months are entitled to get up to two months of fully paid leave.
• Bereavement Leave

  Employees can take up to three days of unpaid leave on the occasion of a death in the family.
• Retirement benefit

  • The pension scheme in the Philippines is regulated under Social Security System.
  • Retired employees who have paid their contribution to SSS for at least 10 years before their retirement are eligible to receive a monthly pension.
• LEGALLY REQUIRED BENEFITS

  • Social Security System
  • Unemployment Compensation
  • Workers’ Compensation
  • Family and Medical Leave Act