Working on your rest day is a commitment that goes beyond the standard workweek, and under Philippine Labor Law, that extra effort is rewarded with specific premium rates. Understanding how these rates stack up—especially when you cross that 8-hour threshold—is key to ensuring fair compensation.
Here is a comprehensive guide to computing overtime pay on rest days based on the Labor Code of the Philippines and the Handbook on Workers' Statutory Monetary Benefits.
1. The Legal Foundation
Under Article 91 of the Labor Code, every employee is entitled to a 24-hour rest period after six consecutive normal workdays. When an employer requires an employee to work on this scheduled rest day, "Premium Pay" applies. If the work extends beyond 8 hours, "Overtime Pay" is added on top of that premium.
Key Concepts
- Premium Pay: The additional compensation for work performed within 8 hours on non-work days (rest days/holidays).
- Overtime Pay: The additional compensation for work performed beyond 8 hours.
2. Premium Rates for Rest Day Work
The computation begins with your Basic Daily Rate (BDR). The premium depends on whether the day is "just" a rest day or if it coincides with a holiday.
| Scenario | Premium Rate (First 8 Hours) |
|---|---|
| Work on a Scheduled Rest Day | 130% of Basic Daily Rate |
| Work on a Rest Day that is also a Special Non-Working Day | 150% of Basic Daily Rate |
| Work on a Rest Day that is also a Regular Holiday | 260% of Basic Daily Rate |
3. Computing Overtime (Beyond 8 Hours)
Once you exceed the 8th hour of work on a rest day, you are no longer just earning "rest day premium"; you are earning "overtime on a rest day." The law mandates an additional 30% on top of the hourly rate you were already earning for that specific rest day.
The Step-by-Step Formula
To find the overtime hourly rate on a rest day:
- Find your Regular Hourly Rate (RHR):
- Calculate the Rest Day Hourly Rate:
- Apply the Overtime Premium (30%):
4. Illustrative Examples
Let’s assume an employee has a Daily Rate of ₱800.00.
- Regular Hourly Rate: ₱100.00
Scenario A: Work on a Scheduled Rest Day
- First 8 Hours: ₱800 × 1.30 = ₱1,040.00
- Hourly Rate for OT: ₱100 × 1.30 × 1.30 = ₱169.00 per hour
If the employee works 10 hours, the total pay is ₱1,040 + (₱169 × 2) = ₱1,378.00
Scenario B: Work on a Rest Day that is also a Special Non-Working Day
- First 8 Hours: ₱800 × 1.50 = ₱1,200.00
- Hourly Rate for OT: ₱100 × 1.50 × 1.30 = ₱195.00 per hour
If the employee works 10 hours, the total pay is ₱1,200 + (₱195 × 2) = ₱1,590.00
5. Important Rules and Exceptions
- Night Shift Differential (NSD): If the overtime work on a rest day falls between 10:00 PM and 6:00 AM, an additional 10% NSD must be applied to the overtime hourly rate.
- Managerial Employees: Generally, managerial employees and members of the managerial staff are exempt from the entitlement to overtime and premium pay, provided they meet the criteria set by the Department of Labor and Employment (DOLE).
- COLA: The Cost of Living Allowance (COLA) is generally not included in the computation of overtime and premium pay; only the basic salary is used.
6. Summary Table: Multipliers
To simplify your math, use these total multipliers against your Regular Hourly Rate:
| Type of Day | Rate for first 8 hours | Rate per OT hour |
|---|---|---|
| Scheduled Rest Day | 130% | 169% |
| Special Day + Rest Day | 150% | 195% |
| Regular Holiday + Rest Day | 260% | 338% |
Note: Proper documentation is essential. Ensure your "Time In" and "Time Out" are accurately reflected in the company's payroll system to avoid discrepancies in your premium and overtime computations.
Would you like me to create a breakdown for a specific salary amount or help you calculate the Night Shift Differential for these scenarios?