I. Overview

In the Philippines, being on a fixed or monthly salary does not automatically remove your right to night shift differential (NSD), rest day premium, or holiday pay.

What matters legally is (a) whether you are a “covered” employee under the Labor Code, and (b) how your pay scheme is structured (monthly-paid vs daily-paid / “all-in” vs clearly itemized), not simply that your salary is “fixed.”

This article walks through everything you need to know, in Philippine context.

Disclaimer: This is general legal information, not a substitute for advice from a lawyer, DOLE, or your HR/legal department.

II. Fixed Salary vs. Daily Wage: What the Law Actually Looks At

Philippine labor law and DOLE regulations often distinguish between:

Monthly-paid employees
- Receive a monthly salary that is presumed to cover:
  - All days of the month (including unworked regular holidays, rest days, and special days), unless company policy or contract says otherwise.
- Example: “₱30,000 per month,” regardless of how many days are in the month.
Daily-paid employees
- Paid only for days actually worked, and certain unworked regular holidays if they meet legal conditions.
- Special days and rest days, if unworked, are often unpaid unless there is a favorable company policy/CBA.
“Fixed salary” or “all-in” pay
- Some employers say: “Your fixed salary already includes overtime, night differential, holiday pay, etc.”
- The law is very cautious about these:
  - Rights like NSD, holiday pay, rest day premium cannot be waived.
  - Any “all-in” arrangement must be clear, express, and not result in the employee getting less than what the law guarantees.
- If the employer cannot show a clear breakdown proving legal minimums are met, DOLE or the courts may treat the “all-in” scheme as invalid or adjust computations in favor of the employee.

Key Point: A “fixed salary” is just a mode of payment. It does not automatically cancel legal benefits like NSD, rest day premium, or holiday pay.

III. Who Is Covered? (Not Everyone Is)

Most private sector employees are covered by the Labor Code provisions on hours of work, rest days, night work, and holiday pay, except those who are specifically exempt, such as:

Managerial employees
- Those primarily managing the establishment or a department, with authority over hiring, firing, or effectively recommending such.
Field personnel
- Regularly performing their work away from the principal place of business and whose actual hours of work cannot be determined with reasonable certainty.
Family members of the employer who are dependent on the employer for support and work in the business.
Domestic workers (now separately regulated under the Domestic Workers Act).
Certain others under special laws or exemptions.

If you are a rank-and-file or non-managerial employee working in a company with reasonably determinable hours of work, you are usually covered — whether your pay is fixed monthly or not.

IV. Night Shift Differential (NSD)

1. What is NSD?

Night shift differential is an additional premium of at least 10% of your regular wage for each hour worked between 10:00 PM and 6:00 AM.

It applies whether you are on a permanent night shift, rotating shift, or occasional overtime that extends into the night period.
It is separate from overtime pay and from holiday/rest day premiums.

2. Who gets NSD?

Covered employees (non-managerial, non-field, etc.) are entitled to NSD when they work during the 10 PM–6 AM window.

Even if your schedule is, for example, 9:00 PM–6:00 AM, your NSD is computed only for work actually done between 10:00 PM and 6:00 AM.
Fixed salary or monthly salary does not remove this entitlement. At most, the employer can argue that your fixed salary already includes NSD if:
- The NSD amount is clearly quantified and built-in, and
- You still receive at least the statutory minimums.

3. NSD + Overtime

If you render overtime during the night period, two premiums may apply at the same time:

Overtime premium (e.g., 25% on ordinary days, higher if rest day or holiday), and
Night shift differential (at least 10%).

They are computed on top of each other; one does not cancel the other.

V. Rest Day: Right to Rest and Premium Pay

1. Right to Weekly Rest

The Labor Code requires employers to provide at least 24 consecutive hours of rest after six (6) consecutive normal workdays.

The exact day (Sunday, Wednesday, etc.) is usually at the employer’s discretion, unless there is a CBA, company policy, or long practice to the contrary.
Rest days can be rotated or scheduled according to operational needs.

2. When Can You Be Required to Work on Rest Day?

An employer may require work on an employee’s rest day in certain situations, including:

Emergencies and urgent work (e.g., accident, actual or imminent danger).
To prevent serious loss.
Work that cannot be interrupted due to the nature of the service.
When the nature of the business requires continuous operations.
When allowed by CBAs or written agreements consistent with the law.

If you agree (or are validly required) to work on your rest day, you are entitled to rest day premium pay, on top of your regular rate.

3. Rest Day Premium Pay (Ordinary Day)

For covered employees:

Work on a scheduled rest day: At least 30% premium on the basic wage for the first 8 hours (i.e., about 130% of regular rate).
If you work overtime on a rest day, the OT hours get higher premiums (rest day premium × overtime premium).

For monthly-paid fixed salary employees:

Your monthly salary is generally understood to already cover your pay for unworked rest days.
However, if you actually work on a rest day, you are still entitled to rest day premium on top of the portion of your monthly salary that corresponds to that day, unless:
- There is a valid, explicit agreement that your salary already includes these rest day premiums, and
- Such agreement still complies with minimum labor standards.

VI. Holiday Pay: Regular vs Special Days

Philippine law distinguishes between:

Regular Holidays
- E.g., New Year’s Day, Araw ng Kagitingan, Maundy Thursday, Good Friday, Labor Day, Independence Day, National Heroes Day, Bonifacio Day, Christmas Day, Rizal Day, plus others that Congress or the President declares by law.
- General rule:
  - “No work” on a regular holiday = still paid your regular daily wage (for eligible employees).
  - “Work” on a regular holiday = at least 200% of your regular daily wage for the first 8 hours.
- If a regular holiday falls on your rest day and you work, the rate is higher (holiday pay plus rest day premium), often resulting in around 260% of the daily rate for the first 8 hours.
Special (Non-Working) Days
- E.g., Chinese New Year, EDSA Revolution Anniversary, All Saints’ Day, additional special days as proclaimed.
- General rule:
  - No work, no pay, unless a more favorable company policy, CBA, or practice grants payment.
  - If worked: Usually 130% of daily wage for first 8 hours.
  - If worked and the special day also falls on your rest day, the rate is higher (often around 150% or more, per DOLE rules).

Note: Exact percentages can vary with regulatory updates, CBAs, and company policies. The structure, however, is always premium on top of the basic rate, not a replacement for it.

1. Are Fixed/Monthly-Paid Employees Entitled to Holiday Pay?

Yes, if they are covered employees:

Monthly-paid employees are usually considered paid for all days of the month, including unworked regular holidays.
For daily-paid employees, entitlement to unworked holiday pay depends on:
- Being present or on leave with pay on the workday immediately preceding the holiday (and sometimes following, depending on DOLE rules).
- Company practice, CBA, and DOLE regulations.

Working on Holiday: Whether daily-paid or monthly-paid, if you work on a regular holiday and you’re a covered employee, you are entitled to holiday premium pay on top of your basic wage for that day.

VII. So… Does a Fixed Salary Already Include NSD, Rest Day and Holiday Pay?

This is where most disputes arise.

1. General Legal Principles

Labor standards benefits (e.g., NSD, holiday pay, rest day premium, overtime) are rights granted by law.
They cannot be waived by:
- General waivers,
- Vague acknowledgments,
- Broad statements like “All benefits are already included.”
If there is ambiguity, it is resolved in favor of labor.

2. When Can an “All-in” or Fixed Salary Be Legally Acceptable?

An “all-in” arrangement might be upheld if:

It is clearly and explicitly stated in the employment contract or CBA that:
- The fixed salary already covers specific items like NSD, rest day work, and holiday work.
The employer can demonstrate mathematically that:
- The fixed salary is at least equal to or higher than the total of:
  - Basic wage, plus
  - All legally required premiums and benefits for the usual working pattern.
It is not used to defeat minimum wage laws or mandatory benefits.

Even then, disputes often arise when:

The employee’s actual hours, shifts, or holiday work differ significantly from what was assumed in the “all-in” computation.
No clear breakdown was ever given or explained to the employee.

3. Common Problem Situations

Employee works regular night shifts and frequent holidays, but:
- The contract just says “₱X fixed salary,” with no breakdown.
- Payslip just shows one line item.
Employer insists: “Everything is already included.”

In such cases, labor authorities may recompute:

Treat the “fixed salary” as basic wage, then:
- Add NSD, OT, holiday, and rest day premiums that should have been paid.
Or require the employer to prove that the “fixed salary” was genuinely sufficient to lawfully cover all those benefits.

VIII. Special Employment Situations

Probationary employees
- Generally enjoy the same labor standards benefits (NSD, holiday pay, rest day premium) as regular employees, if they are covered by the law.
Project, seasonal, or fixed-term employees
- As long as they are not in exempt categories, they are also entitled to these benefits during periods when they are actually employed and working.
BPO/KPO and 24/7 operations
- Night shifts are common; NSD is often a significant part of compensation.
- Many companies explicitly show NSD, OT, and holiday pay as separate line items to avoid disputes.
- Even when a “fixed allowance” is given, the employer still must ensure minimum NSD and premium pay standards are met.
Compressed Workweek or Flexible Work Arrangement
- Approved compressed workweek schedules do not remove entitlements to NSD, OT (if hours exceed agreed daily limit or weekly threshold), rest day, and holiday pay.
- The key is how many hours are worked and when.

IX. Non-Diminution of Benefits and Company Practice

Even if the law sets minimums, some companies grant better-than-legal benefits (e.g., 20% NSD instead of 10%, double holiday pay, paid special days).

Once these become long-standing, consistent, and deliberate, they may turn into a company practice that cannot be unilaterally withdrawn (non-diminution of benefits), unless:
- There is a valid reason (e.g., CBA renegotiation), and
- Changes comply with legal standards.

A fixed salary scheme cannot be used to downgrade existing company practice if it results in employees receiving less than what they have long enjoyed.

X. Enforcement, Claims, and Prescription

Where to go
- DOLE (Department of Labor and Employment) regional offices accept labor standards complaints (underpayment, non-payment of NSD, holiday pay, etc.).
- NLRC (National Labor Relations Commission) handles money claims and illegal dismissal cases, often after DOLE or through direct filing in some instances.
Documentation that matters
- Employment contract / appointment letter.
- Payslips or payroll records.
- Timekeeping / biometrics logs.
- Company policies, handbooks, or memos on schedules and holidays.
- Any communications about “all-in” pay, allowances, or inclusions.
Time limits (prescription)
- Money claims arising from employer–employee relations generally prescribe after a certain number of years (historically 3 years from when the cause of action accrued).
- Claims for older periods may no longer be enforceable, though patterns of underpayment can still support more recent claims.

XI. Practical Q&A Summary

1. I’m a fixed-salary, monthly-paid rank-and-file employee. Do I get NSD? If you actually work between 10 PM and 6 AM, and you’re not in an exempt category (managerial/field, etc.), the law says you should receive at least 10% premium per hour for those night hours. Your employer can only claim it’s “included” if that is clearly shown and you’re not getting less than the legal minimum.

2. If I work on my rest day, do I get extra pay even if I’m monthly-paid? Yes. Monthly-paid employees are generally paid for unworked rest days, but work on a rest day usually entitles you to rest day premium pay on top of your basic pay, unless there is a valid, clearly agreed arrangement that already lawfully covers such premiums.

3. If I don’t work on a regular holiday, am I still paid? If you’re a covered employee and meet DOLE’s conditions (e.g., present or on paid leave before the holiday), you are generally entitled to regular holiday pay even if unworked, especially if you are monthly-paid.

4. My employer says, “Your fixed salary includes everything, so no separate NSD or holiday pay.” Is that allowed? Not automatically. For such a scheme to be lawful:

It must be clearly spelled out, and
Your total pay must still be at least equal to what you would have received if each benefit were computed separately under the law. If not, you may have a valid claim for underpayment.

5. I’m on a night shift in a BPO with a fixed monthly package. Am I covered? Most rank-and-file BPO workers are covered by labor standards, including NSD and holiday pay. The question is whether your package correctly and adequately includes those benefits. This depends on actual numbers and on how your contract and payslips are structured.

XII. Final Takeaways

Fixed salary ≠ exemption from labor standards. What matters is your job classification and actual work conditions, not just the label “fixed salary.”
Night shift differential, rest day premium, and holiday pay are legal rights for covered employees.
Employers may structure pay as “all-in” or “fixed,” but they must:
- Be transparent,
- Respect minimum standards, and
- Avoid diminution of existing benefits.

If you suspect that your fixed salary does not properly compensate you for night work, rest day work, or holiday work, the next rational steps are usually:

Review your employment contract and payslips carefully.
Compare your compensation with what the Labor Code and DOLE issuances require.
Consult HR, your union (if any), DOLE, or a labor lawyer to assess your specific situation.

That’s the landscape, in a nutshell, of fixed salary employees and their entitlement to NSD, rest day, and holiday pay in the Philippines.