(CSC–DBM Joint Circular No. 2, s. 2015)

Overview. CSC–DBM Joint Circular No. 2, s. 2015 (the “Joint Circular”) is the inter-agency issuance of the Civil Service Commission (CSC) and the Department of Budget and Management (DBM) that systematizes when and how national and local government personnel may render overtime (OT) and be compensated either through Overtime Pay or Compensatory Time-Off (CTO). It harmonizes civil service rules on official hours of work, attendance, and accountability with budgetary and auditing requirements on personal services.

Below is a practitioner-oriented guide to its key concepts, coverage, authority requirements, compensation options, limits, and compliance mechanics—organized the way HR, budget, and line managers actually use the Circular.

1) Coverage and exclusions

Covered personnel. Civilian government personnel—career or non-career—appointed to plantilla positions and paid from Personal Services (PS), including those in national government agencies (NGAs), government-owned or controlled corporations (GOCCs) covered by the Compensation and Position Classification System (CPCS), state universities and colleges (SUCs), local government units (LGUs), and other instrumentalities.

Common exclusions.

Individuals engaged through Contract of Service or Job Order (COS/JO) arrangements (not government employees).
Officials whose compensation package already presumes position-based availability beyond 8 hours (e.g., certain high-level officials); these typically are ineligible for OT pay but may earn CTO subject to the Circular.
Personnel whose pay is by result/output under special compensation schemes, where OT is not the unit of measure.
Those whose work schedule is flexible/compressed but still within the 40-hour workweek—OT only arises when work exceeds the daily/weekly standard as authorized.

(Tip for HR/legal: verify any agency-specific exclusions carried in special laws/charters or DBM approval letters.)

2) Defining overtime and when it is allowed

Overtime is authorized work rendered beyond eight (8) hours on an employee’s regular workday, or on a rest day, special day, or holiday, to meet exigencies of service. The Joint Circular emphasizes that OT is an exception—not a staffing substitute—and must be justified by any of the following illustrations:

Deadlines tied to public safety, revenue collection, elections, disaster/continuity operations, or time-bound government commitments.
Urgent tasks where delay will cause significant public prejudice, legal exposure, or financial loss to government.
Peak periods (e.g., enrollment, tax season, fiscal year-end closing, procurement and budget deadlines).

Night work. Night-shift differential (NSD) may apply to authorized work between 10:00 p.m. and 6:00 a.m.—computed on the employee’s hourly rate in addition to OT rules.

3) The two compensation paths

A. Overtime Pay

Cash compensation charged to PS allotments for eligible employees. The Joint Circular sets:

Eligibility thresholds by salary grade/position. As a general rule, rank-and-file and lower-to-mid SGs are eligible for OT pay, while higher-level officials (often SG 24 and up) are not; they may earn CTO instead. Agencies must apply the exact thresholds specified by the Circular and any subsequent DBM guidance.
Rates and multipliers. OT is computed from the employee’s hourly rate (monthly basic ÷ 22 workdays ÷ 8 hours), then multiplied depending on when OT is rendered (e.g., regular workday beyond 8 hours vs. rest day/holiday), with NSD layered for hours between 10:00 p.m. and 6:00 a.m. Apply the precise multipliers and examples in the Circular and agency implementing guidelines.
Funding and ceilings. OT pay is subject to funds availability within approved PS and any monthly/annual caps set by the Circular/DBM. Finance should monitor compliance with caps and reflect projections in the Work and Financial Plan (WFP).

B. Compensatory Time-Off (CTO)

Time credits in lieu of cash, earned one-for-one (and, where provided, with the appropriate multiplier), subject to service requirements. Key points:

Who gets CTO. All employees who render authorized OT may be granted CTO; for higher-level officials who are ineligible for OT pay, CTO is the default.
Accrual and usage. CTO is scheduled with supervisor approval, considering continuity of operations. Agencies adopt maximum accrual, carry-over, and use-within periods consistent with the Circular (e.g., must be availed within a defined period from date earned; not ordinarily monetizable).
No double recovery. The same OT hours cannot be paid in cash and also converted to CTO.

4) Prior authorization and documentation (the non-negotiables)

Before the OT happens

Written Authority to Render OT approved by the Head of Agency or duly delegated official per activity, indicating:
- Nature and necessity of work, affected unit, specific dates/times and employee names/positions.
- Whether compensation will be OT pay or CTO and the funding source (if cash).
Budget clearance (availability of PS funds) when OT pay is contemplated.
Work scheduling plan to avoid habitual reliance on OT.

After the OT

Certified Daily Time Records (DTRs)/bundy and OT accomplishment report signed by the immediate supervisor, specifying hours actually rendered.
HR validation of eligibility (position/SG, employment status), Finance recomputation (rates, multipliers, NSD), and Internal Audit spot checks per COA rules.
Payroll processing for OT pay or crediting CTO to the employee’s CTO ledger; CTO availment form when the employee chooses dates, subject to workload.

5) What counts—and what does not—as OT

Counts as OT (with prior written authority)

Work beyond 8 hours to meet urgent deadlines.
Work on rest days, special non-working days, regular holidays, and suspension days—if the head requires the office to operate and authorizes the service.
Field work and official travel beyond the regular tour only when expressly authorized as OT and supported by time-stamped deliverables (mere travel time is not automatically OT).

Does not count as OT

Voluntary stay in the office, “finishing up” without written authority.
Time lost due to tardiness/undertime offset by extra hours the same day (this is not OT).
Meetings, trainings, or team events beyond office hours without prior OT authority stating necessity.
Work attributable to poor planning or habitual understaffing that management can correct through proper staffing.

6) Scheduling rules, standard hours, and alternative tours

The civil service standard is 8 hours/day, 40 hours/week, typically Monday–Friday. Agencies may adopt:
- Flexible work arrangements (e.g., staggered hours, compressed workweeks) that still total 40 hours and comply with CSC policy. OT arises only beyond the approved daily/weekly standard and still needs prior authority.
- Shifts or rotating schedules for 24/7 services. OT is measured relative to the assigned shift, not the 8–5 window.
OT on school- or weather-related suspensions is allowed only if the head keeps the office operational for essential services and issues prior authority.

7) Computation mechanics (how HR/Finance actually compute)

While agencies should follow the exact sample computations in the Joint Circular and implementing guidelines, the generic sequence is:

Identify compensable hours: Authorized hours actually rendered beyond 8 on a workday or hours on a rest/holiday.
Derive hourly rate: Hourly Rate = (Monthly Basic Salary ÷ 22 workdays ÷ 8 hours) (Use the current salary schedule for the employee’s SG/step.)
Apply the correct multiplier based on the day type (e.g., workday OT vs. rest day vs. special/regular holiday) and apply NSD for hours between 10 p.m. and 6 a.m.
Check caps and eligibility: Confirm the employee is OT-pay eligible; otherwise credit CTO.
Payroll or CTO ledger: Charge to PS for OT pay; or post CTO credits with traceable link to the authority and DTR.

(Agency finance should also factor taxability and withholding consistent with BIR rules on compensation income.)

8) Limits, safeguards, and accountability

Reasonableness & caps. Heads must prevent excessive OT; the Circular and DBM guidance impose quantitative limits (e.g., monthly/annual ceilings for OT pay, and maximum CTO accrual/use-within periods).
Health & safety. There are practical daily limits on continuous OT to protect workers; emergencies aside, agencies should avoid sustained workloads that risk safety or quality.
Delegation controls. Authority to approve OT may be delegated in writing with clear parameters (who, when, what costs).
Audit trail. COA will examine necessity, reasonableness, and documentation. Unsupported OT is disallowed and personally chargeable to approving/signing officers and/or claimants.
No pyramiding. OT hours cannot be paid twice (e.g., both as OT pay and honoraria) for the same time block. Where special pay (e.g., honoraria for certain bodies) exists, follow the either-or rules stated in the special issuance and the Circular.

9) Interaction with other benefits and leave

CTO vs. leave credits. CTO is separate from vacation/sick leave. It is not a leave earning but time-off compensation for OT. Agencies should maintain a CTO ledger distinct from leave cards.
Monetization. As a rule of thumb, CTO is not monetizable, except where the Circular provides narrowly defined situations (e.g., agency-wide conversion windows expressly allowed, or upon separation under specific conditions). Follow the Circular’s exact restrictions.
Offsetting tardiness/undertime. CTO should not be used to erase tardiness/undertime retroactively unless the agency’s policy—consistent with CSC rules—allows prior-approved CTO on the same day (generally discouraged).

10) Special scenarios

Disaster and emergencies. Extended OT is often necessary for DRRM, health, peace and order, or utility services. Heads may issue blanket authorities per incident with named teams and validity windows; still, documentation and caps apply.
Election-related tasks (for agencies assisting COMELEC), tax season, budget season, procurement crunch: use time-bound OT programs with detailed rosters, cost estimates, and post-activity validations.
Field posts and mission-critical operations (ports, hospitals, corrections, power/water, transport): adopt shift-based controls and pre-approved OT bands for continuity.

11) Role clarity: who does what

Head of Agency/Delegated Approving Officer: Determines necessity; issues OT authority; ensures funds and compliance; enforces limits.
Immediate Supervisor: Plans workloads; verifies actual OT hours and outputs; endorses DTR/OT reports.
HR: Checks eligibility, records CTO credits, ensures alignment with CSC attendance rules; educates staff.
Budget/Finance/Accounting: Confirms fund availability, computes OT pay, applies caps and taxes, books expenses properly.
Internal Audit/COA Liaison: Performs post-audit and recommends control improvements.

12) Minimum internal policy kit for agencies

To operationalize the Circular, agencies should maintain and periodically update:

OT Approval Matrix (who may approve, for what amounts/durations).
Standard OT Authority template (with justification, roster, dates/hours, compensation mode, funding).
CTO Policy (earn, cap, carry-over, scheduling, use-within).
Computation Guide (hourly rate formula, multipliers, NSD, examples).
Monitoring Dashboard (per unit/employee OT trends vs. caps).
Year-end Review Protocol (root-cause of OT, staffing fixes, process improvements).

13) Practical compliance checklist

Is there a written OT authority before the work?
Is the reason an exigency (not routine understaffing)?
Is the employee eligible for OT pay; otherwise CTO?
Are funds available and within caps?
Are DTR/attendance and output properly certified?
Was NSD correctly applied (if any)?
Was CTO credited/availed within allowed periods?
Do totals pass a reasonableness check (COA lens)?

14) Key takeaways

OT is exceptional and must be authorized in advance, documented, and tightly controlled.
Employees are compensated via OT pay (where eligible and funded) or CTO (especially for those ineligible for cash OT).
Eligibility thresholds, multipliers, caps, and CTO rules are determinative—apply the exact figures and examples provided by CSC–DBM Joint Circular No. 2, s. 2015 and any succeeding DBM/CSC clarifications.
Good governance means using OT data to fix root causes (work design, staffing, process) rather than normalizing after-hours work.

Model clauses you can adopt in your internal SOP (sample language)

Overtime is permitted only under exigency of service and must be covered by prior written authority issued by the Head of Agency or authorized official identifying the specific activity, dates and times, names of employees, compensation mode (OT pay or CTO), and funding source (for OT pay). Claims without prior written authority are not payable/creditable and may subject the claimant and recommending/approving officers to disallowance.

Eligibility for OT pay follows CSC–DBM JC No. 2, s. 2015. Employees ineligible for OT pay may be compensated through CTO under the same Joint Circular. Double compensation is prohibited.

Computation of OT pay and CTO credits shall follow the hourly rate formula, applicable multipliers, and NSD rules prescribed by the Circular and DBM guidelines, subject to fund availability and caps.

CTO must be availed within the prescribed period from date of earning; unused CTO expires thereafter unless otherwise allowed by the Circular. CTO is not ordinarily monetizable.

If you want, I can tailor this into a one-page policy for your office with your specific salary grades, multipliers, caps, and forms plugged in.