Key takeaways (at a glance)

Project-based status does not automatically disqualify an employee from Service Incentive Leave (SIL). If the employee is covered by the SIL rules and has rendered at least one year of service, they are entitled to 5 days SIL with pay per year.
“Floating status” (temporary lay-off/off-detail of up to six months) does not, by itself, forfeit accrued SIL. What it does affect is when SIL can be used versus when it should be commuted to cash.
Using SIL is leave from work. If there is no work to be absent from (e.g., you are off-detail), employers typically do not treat SIL as a substitute wage during the lay-off period. Instead, unused SIL is converted to cash at year-end or upon separation.
Coverage exclusions still apply: e.g., field personnel and certain similarly situated workers; employees in establishments regularly employing <10 data-preserve-html-node="true" employees; or those already enjoying ≥5 days paid vacation by policy/CBAs.
For project workers who repeatedly re-engage with the same employer, service can accumulate across broken periods within a 12-month window (subject to the rules on “one year of service”).

Legal backdrop (what SIL is and who gets it)

Service Incentive Leave (SIL) is a statutory five (5) days of leave with pay per year granted to covered employees who have rendered at least one (1) year of service.

One year of service means 12 months, continuous or broken, reckoned from the date of employment; it includes authorized absences and paid regular holidays.
Conversion to cash: Any unused SIL at the end of the year is commutable to its monetary equivalent. It is also typically paid upon separation, prorated when applicable.

Common exclusions from SIL coverage

An employee is generally not covered by SIL if any of the following apply (paraphrased from the Implementing Rules):

Already enjoying at least 5 paid vacation days (i.e., a policy or CBA providing ≥5 days makes SIL inapplicable as a separate entitlement).
Working in an establishment that regularly employs fewer than ten (10) employees.
Field personnel and similarly situated employees whose time and performance are unsupervised, including certain task/contract or purely commission-based workers paid a fixed amount per output.
Those whom the DOLE Secretary may exempt for practical reasons (rare; typically industry- or situation-specific).
Government employees (covered by separate rules).

Project-based employment is not an exclusion by itself. A project worker can be covered if they meet the service and non-exclusion criteria.

Project-based employment, “floating status,” and SIL

What is project-based employment?

The employee’s tenure is coterminous with a specific project or phase. Once the project ends, the employment for that project ends—unless renewed for another project.
Project workers can accumulate service over time with the same employer if re-engaged within the 12-month reckoning period (see “How service accrues” below).

What is floating status (off-detail/temporary lay-off)?

A temporary suspension of work (often up to six months) where the employee remains employed but is temporarily not provided work (common in security, construction, events, seasonal operations).
No work, no pay applies during the suspension unless there is a company/CBA provision granting pay.

Can a project-based employee on floating status use SIL?

Using SIL presumes there is work to be absent from. When on floating status, there is no scheduled work; hence, charging SIL to cover the off-detail period is generally disallowed in practice.
However, any accrued but unused SIL must still exist and is convertible to cash at year-end or upon separation.
Some employers, by policy or CBA, allow SIL usage during idle days or permit advance encashment. That is permissible as a benefit above the statutory floor—but not required by law.

How service accrues for project-based workers

Reckoning period: “One year of service” is 12 months counted from the date of first engagement (or re-set by policy/contract) and may be continuous or broken.
Broken service: Gaps between projects do not automatically reset the clock. If, within any 12-month span, cumulative service reaches one year, the SIL entitlement vests (provided the worker is covered and not excluded).
Effect of floating status: Because the employment continues (suspended obligations), many practitioners treat this time as not destroying continuity; but accrual is tied to having completed a year within the rules.
Project end: If the project ends before the worker completes one year of service (and the worker is not re-engaged within the 12-month period), no SIL vests for that year.
Re-engagement: If re-hired within the 12-month window, the prior months count toward the one-year qualification (unless a valid exclusion applies).

Practical tip: Employers should document engagement dates, off-detail periods, and re-engagements so they can accurately assess when a worker crosses the one-year threshold.

Using vs. commuting SIL: what’s allowed

When use of SIL works best

There is scheduled work, and the employee needs time off (illness, family needs, personal errands, etc.).
The request follows notice procedures in policy/CBAs, subject to approval (except emergencies).

When commutation (encashment) applies

End of year: Unused SIL converts to cash at the worker’s daily rate.
Separation: Any unused SIL is paid out (prorated if applicable).
Floating status: If the employer does not allow charging SIL to cover the lay-off period, the practical route is commutation at year-end or upon separation. Some firms voluntarily advance the commutation as a goodwill measure.

Pay computation essentials

Daily-paid workers: SIL day’s pay = basic daily wage (BDW) on the day SIL is used/paid.
Monthly-paid: Employer may use the daily equivalent (e.g., 313/261 divisor policies differ by company; apply your CBA/policy consistently and lawfully).
Piece-rate/commission (if covered): Use average daily earnings over a defined look-back period per policy, applied consistently.
Overtime, premiums, allowances: SIL is basic pay unless policy/CBA grants more.

Common scenarios (with answers)

Project worker hits 12 months via multiple short projects, then goes off-detail. Can they “spend” SIL to get paid while floating? Default: No, not as a wage substitute during lay-off. Yes to commutation at year-end or upon separation. Possible to allow by policy/CBA.
Worker has 3 unused SIL days before going off-detail. Company refuses use during floating but pays them at year-end. Is that compliant? Yes, that aligns with the commutation rule.
Company with <10 data-preserve-html-node="true" employees (regularly). Is a project worker entitled to SIL? No, that establishment-size exclusion generally removes SIL coverage.
Worker already gets 10 days paid vacation leave by policy. Is SIL still due? No separate SIL; the ≥5 days paid vacation satisfies the statutory minimum.
Field personnel project worker asks for SIL. If truly “field personnel” (unsupervised time/performance as defined), SIL does not apply.
Security guard off-detail (“floating”) between client assignments with >1 year service with the agency. Accrued SIL remains. Use during floating is policy-dependent; commutation remains the baseline protection.

Employer compliance checklist

Identify coverage: Confirm establishment size, field personnel status, and any existing paid vacation ≥5 days.
Track service: Use a 12-month rolling window to monitor when project workers cross one year of service.
Put it in writing:
- Define SIL accrual, approval, blackout dates, and carry-over treatment (note: unused SIL must be converted to cash; “use it or lose it” is not allowed).
- State the rule on SIL during floating status (e.g., “commutation only” vs. “allowable usage during off-detail”).
Compute consistently: Set clear daily rate divisors, averaging periods for piece-rate, and cut-off dates for commutation.
Document decisions: Keep leave forms, off-detail notices, payroll commutations, and separation pay-outs.

Employee playbook

Track your dates: Keep your deployment letters, off-detail notices, and re-engagement memos to prove service accumulation.
Ask HR early: If you anticipate going off-detail, clarify whether you may use SIL while floating or you’ll get commutation later.
Keep copies of payslips showing SIL credits/commutation.
Know the exclusions: If you’re field personnel or in a <10 data-preserve-html-node="true"-employee establishment, SIL may not apply.

FAQs

Q: Does time spent on floating status count toward the “one year of service”? A: The employment relationship remains, and continuity isn’t broken merely by floating status. In practice, service toward the one-year threshold is assessed over the 12-month window from hiring/re-engagement, even with broken periods. Employers should have a clear policy consistent with the rules.

Q: Can my employer force me to use up SIL during floating? A: They may not deprive you of commutation. Requiring “use” during floating (to offset no-work days) is a policy choice; it should be clearly stated and must still ensure you receive the full monetary value of your SIL within the year or at separation.

Q: If I’m terminated at the end of the project with unused SIL, what happens? A: Unused SIL must be paid in cash upon separation, typically prorated for the current year.

Bottom line

A project-based employee who is covered by SIL and has completed one year of service is entitled to 5 days SIL with pay—regardless of project-based status.
When the employee goes on floating status, using SIL as a wage replacement is not the default in law, but commuting unused SIL is required.
Companies may adopt more generous policies (e.g., allowing SIL use or early encashment during floating), but they cannot remove the statutory right to commutation of unused SIL.

Good practice: Employers should codify their floating-status SIL rules in policy/CBAs; employees should keep records and request commutation if use during floating isn’t allowed.