A practical legal guide for private- and public-sector workers and employers

1) What “official business” means

In Philippine practice, an employee is on official business when the employer (or agency, for government) requires the employee to travel, attend a meeting/training, render field work, or perform duties away from the regular workplace for the employer’s benefit. Pay and benefits flow from (a) the Labor Code (Book III: Working Conditions and Rest Periods) and its Implementing Rules, (b) DOLE issuances (e.g., the Handbook on Workers’ Statutory Monetary Benefits), (c) tax rules (BIR regulations), (d) company policies/CBAs, and—for government personnel—(e) executive/DBM/COA rules on travel.

2) Core pay rule: what counts as “hours worked”

Under the Labor Code and its IRR, employees must be paid for all hours worked—i.e., all time an employee is required to be on duty or on the employer’s premises or a prescribed workplace, or performing work elsewhere for the employer. Applied to official business:

Regular travel during working hours (e.g., 9:00 a.m.–6:00 p.m. flight/drive to a client site required by the employer): compensable.
Travel outside regular hours: generally not compensable if the employee is merely a passenger and no work is performed.
- Exceptions (compensable): driving a vehicle; carrying out job tasks while traveling (e.g., preparing reports/presentations en route because it is required/necessary); travel that is an integral part of the principal activity (typical for field staff).
Home-to-work or hotel-to-temporary-worksite commuting: typically not compensable, unless travel time is unusually long and required by the employer as part of the day’s assignment.
Waiting/layover time: compensable if the employee is engaged to wait (cannot use the time for own purposes and must remain available/at the employer’s disposal).
Training/seminars/meetings: treated as working time unless all of these are true: (1) outside regular hours, (2) voluntary, (3) not job-related, and (4) no productive work performed.

Practical takeaway: If the employer requires it and it happens during scheduled hours or as part of the job, it’s usually paid.

3) Premiums and differentials that may apply

If the compensable official-business hours fall into the categories below, statutory premiums apply to non-exempt employees (rank-and-file and others not otherwise exempt):

Overtime (OT): beyond 8 hours/day → +25% of hourly rate (ordinary day); +30% if OT on a rest day, special day, or holiday.
Night Shift Differential: work between 10:00 p.m. and 6:00 a.m. → +10% of regular hourly rate.
Rest Day Work: work on a weekly rest day when required → premium pay (typically +30% of basic rate for first 8 hours).
Special (non-working) day: if worked → 130% of basic rate for first 8 hours (higher if also a rest day). If not worked, “no work, no pay” unless company policy/CBAs say otherwise.
Regular holiday: if not worked, entitled to 100% of daily wage (subject to presence requirements). If worked, 200% for first 8 hours (higher with OT/night work).

If official business forces work on rest days/holidays, those hours are paid with the proper premium. If the employee does no work on those days, pay follows ordinary holiday/rest-day rules or company policy.

4) Salaried vs hourly; exempt vs non-exempt

Hourly/non-exempt: pay follows actual compensable hours plus applicable premiums.
Monthly-paid non-exempt: the monthly rate covers 8 hours/day on ordinary working days; additional compensable hours (OT, night work, rest day/holiday work) still require premium payment.
Exempt employees (e.g., bona fide managerial/executive): the Labor Code’s hours-of-work and premium-pay rules generally do not apply; compensation is per contract/ policy. Many employers still reimburse travel costs and grant per diems.

5) Per diems, allowances, and reimbursements (private sector)

Statutory mandate: The Labor Code does not require per diems or fixed travel allowances in the private sector.
Company policy/CBAs: Common practice is to grant per diems (meals/misc.), reimburse actual and necessary transportation, lodging, and incidental expenses supported by receipts/itineraries/travel authority.
Tax treatment (BIR):
- Accountable-plan travel reimbursements/per diems that are substantiated (official business purpose + receipts/itinerary & liquidation) are non-taxable to the employee.
- Unsubstantiated or excess per diems are taxable to the employee (or may be subject to fringe benefit tax if for managerial/supervisory and treated as a fringe).
- Company must keep proper documentation (travel order/approval, itinerary, SOA/receipts, liquidation reports).

6) Government employees (public sector) — special rules

For national government and many LGU/GOCC personnel, travel entitlements are governed by Executive Orders and DBM/COA rules (e.g., EO 248/298 and succeeding/related DBM Budget Circulars and COA circulars), which fix per diem ceilings and reimbursement rules (transportation, lodging, meals, incidental expenses), require travel authority, and set liquidation timelines. Rates and rules differ for local vs foreign travel, and by position class. Premium pay follows civil service/compensation laws and agency rules where applicable.

7) “No work, no pay” vs paid “official business” days

The general principle is “no work, no pay.”
However, when an employer treats the day as worked (because the employee was on required official business and could not render regular office hours), it may count as paid under company policy or as compensable hours if it meets the “hours worked” tests above.
Many employers explicitly mark qualified days as “OB with pay” if the trip/program is required and the employee is reasonably unable to clock regular hours.

8) Common edge cases

Red-eye flights: Time before 10:00 p.m. or after 6:00 a.m. is not automatically paid unless it qualifies as hours worked (e.g., required departure within scheduled hours; driving; work performed while traveling). If compensable time falls 10:00 p.m.–6:00 a.m., night differential applies to non-exempt employees.
Layovers/long waits: If the employee must remain available and cannot use time freely, it is usually compensable.
Training/certification that the employer requires for the job (even on a weekend): compensable; premiums may apply.
Secondment/temporary assignment to another site: regular work rules apply at the temporary site; travel to the site on workdays can be compensable; per diems per policy.
Work-from-hotel/airport: If directed to work (calls, reports, troubleshooting), count the time actually worked; if continuous and controlled by employer, count as hours worked.
Inclement-weather disruptions while on OB: If work cannot proceed and the employee performs no work, pay follows “no work, no pay” unless policy provides otherwise; statutory holiday rules still apply if the day is a holiday.

9) Documentation & compliance checklist

For employers

Issue written travel/OB authority specifying purpose, dates, destinations, expected outputs, and whether travel time counts as work.
Provide clear policy on (a) compensable travel time, (b) per diem/reimbursement standards and ceilings, (c) rest day/holiday work approvals, (d) timekeeping while off-site.
Require time records (e.g., mobile time-in, logs, signed client acknowledgment) and liquidation within set days.
Observe statutory premium pay and night differential where applicable.
Align tax handling with BIR substantiation rules.

For employees

Secure prior approval; keep tickets, receipts, boarding passes, itineraries, and proof of attendance/work (photos, emails, certificates).
Record actual hours worked, including off-site work and directed work during travel/layovers.
Submit liquidation timely; clarify if a day should be marked “OB with pay.”

10) Sample pay scenarios (private sector, non-exempt)

Assumptions: Basic hourly rate = ₱100; regular schedule 9:00 a.m.–6:00 p.m. (1-hour meal break); night differential applies 10:00 p.m.–6:00 a.m.

Same-day client visit (9:00–6:00), paid travel within hours

Compensable hours: 8
Pay: 8 × ₱100 = ₱800

Required out-of-town trip, flight 7:00–8:30 p.m., then hotel check-in

9:00 a.m.–6:00 p.m.: 8 hours compensable = ₱800
7:00–8:30 p.m.: not compensable if merely a passenger and no work performed
Total: ₱800 (plus per diem/reimbursements per policy)

Driving company vehicle 7:00–9:00 p.m.

7:00–8:00 p.m.: OT hour → ₱100 + 25% = ₱125
8:00–9:00 p.m.: OT hour → ₱125
Base 8 hours: ₱800; OT 2 hours: ₱250 → ₱1,050

Required Saturday training (rest day) 1:00–5:00 p.m.

4 hours with rest-day premium (+30%): 4 × (₱100 × 1.30) = ₱520
If extends past 8 hours/day, apply OT on rest day (+30%) for the excess.

Official business on a regular holiday, worked 8 hours

Holiday premium: 200% → 8 × (₱100 × 2.00) = ₱1,600
Add night diff/OT if applicable.

11) Enforcement, disputes, and records

Timekeeping remains crucial even off-site; employers must keep accurate records of hours worked.
Underpayment claims can be brought to DOLE via Single Entry Approach (SEnA) or through NLRC for money claims.
Company policies/CBAs may provide more favorable terms; the more beneficial practice controls.

12) Quick answers to frequent questions

Are per diems mandatory? Not in the private sector; they’re policy/CBAs. Government has fixed rules/rates.
Is travel time always paid? No. Paid if during scheduled hours or integral to the job; merely riding after hours is usually unpaid, unless work is performed.
If the boss sends me to a 3-day seminar? Required attendance is hours worked; pay per schedule, with premiums if it falls on rest days/holidays/night hours.
Does official business change SSS/PhilHealth/Pag-IBIG? No. Contributions are based on monthly pay; travel reimbursements under an accountable plan generally don’t affect contributions.

13) Actionable policy language (for employers)

Define “official business,” what travel time is compensable, and how to record it.
Set per diem/reimbursement rules (what’s covered, receipt requirements, liquidation deadlines).
Clarify approvals for rest day/holiday work and night travel.
State that policies supplement and do not reduce statutory rights; CBAs prevail if more favorable.

14) Bottom line

In the Philippines, pay while on official business hinges on compensable hours. If the employer requires the trip or activity and it falls within working hours or is integral to the job, it is paid, and statutory premiums apply when work lands on rest days, holidays, nights, or overtime. Per diems and reimbursements in the private sector flow from policy and tax rules; the public sector has specific travel regulations. Clear approvals, meticulous time/expense records, and compliant policies keep everyone on the right side of the law.