Service Incentive Leave, the “6-Month” Myth, and How Company Policy Fits In

1) Why “after 6 months” is a common (but often wrong) reference

In the Philippine workplace, “six months” is a familiar marker because probationary employment typically lasts up to six (6) months and many employees become regular after that period under the rules on regularization. That timeline, however, is frequently (and incorrectly) carried over to paid leave entitlements.

Key point: Regularization after 6 months does not automatically mean you already have a statutory right to paid leave. Most paid leave in the private sector is policy-based, except for specific legally mandated leaves (like maternity leave, paternity leave, etc.) and Service Incentive Leave (SIL)—which has its own timing rule.

2) The statutory baseline: Service Incentive Leave (SIL)

Under the Labor Code of the Philippines, Service Incentive Leave (SIL) is the primary “general” paid leave benefit mandated for many private-sector employees.

What SIL is:

Five (5) days leave with pay per year, intended as a minimum labor standard.

When SIL becomes demandable:

SIL is generally due to an employee who has rendered at least one (1) year of service.
“One year” is commonly understood as 12 months of service, whether continuous or broken, counting authorized absences as part of service consistent with labor standards practice.

So what about after 6 months?

As a matter of law, SIL is not required to be granted after only 6 months (unless the employee already completed one year, of course).
If an employer grants paid leave credits after 6 months, that is typically company policy, practice, or a collective bargaining agreement (CBA)—not the SIL minimum itself.

3) Who is covered by SIL—and who may be excluded

SIL is a minimum standard, but it is not universal. Common exclusions (depending on the employee’s classification and the establishment’s situation) include:

Government employees (generally governed by civil service rules, not SIL).
Managerial employees (often excluded from certain labor standards benefits).
Field personnel and similarly situated employees whose actual hours of work cannot be determined with reasonable certainty.
Employees who are already enjoying at least five (5) days paid leave annually (whether called vacation leave, sick leave, or combined leave), provided it is genuinely with pay and is at least equivalent in benefit.
Establishments that may fall under certain coverage thresholds/exemptions recognized in implementing rules (commonly referenced in labor standards guidance).

Practical note: Even where an employer claims an exemption, disputes often turn on job reality (actual duties and work conditions) rather than titles alone. The employer is typically expected to substantiate exemptions with records and job classifications.

4) The most important distinction: SIL vs. company leave (VL/SL)

Many companies provide Vacation Leave (VL) and Sick Leave (SL) as a benefit. These are usually not mandated by the Labor Code (except that SIL sets a minimum in covered cases).

How employer leave can “replace” SIL: An employer may satisfy the SIL minimum by granting at least 5 paid leave days per year, even if called VL/SL/Leave Credits, as long as the benefit is at least equivalent. In practice:

If you have 5 or more paid leave days annually, the company may treat those as already meeting SIL.
If your leave is more restrictive than SIL in a way that makes it not truly equivalent (for example, it cannot be used at all except under narrow conditions, or it is not actually paid), it may not validly substitute.

Why this matters at 6 months: A company can legally choose to grant:

pro-rated leave credits,
early SIL credits, or
separate VL/SL even before one year—but that is a policy choice, not an automatic statutory entitlement (except for other special leaves discussed below).

5) Can a company grant SIL after 6 months? Yes—by policy or practice

Nothing prevents an employer from being more generous than the legal minimum. Many employers do one or more of the following:

Grant leave credits upon hiring (Day 1 entitlement),
Grant leave credits upon regularization (often around month 6),
Grant pro-rated annual leave during the first year, or
“Advance” SIL credits subject to internal rules.

If the company’s handbook, contract, offer letter, or established practice says leave begins at 6 months, then the employee’s right is anchored on:

contractual undertaking,
company policy, and/or
company practice (a benefit repeatedly granted over time in a consistent manner can become enforceable).

Important: If a benefit has become an established company practice, it generally cannot be withdrawn or reduced unilaterally if doing so would violate the principle against diminishing benefits.

6) Pro-rating: what’s legally required vs. what’s commonly practiced

SIL (statutory minimum):

The typical legal trigger is after 1 year. The law does not require pro-rating before one year (again, subject to coverage and equivalency rules).

Company leave (policy-based):

Pro-rating is common: e.g., 12 VL/year credited monthly, or 5 days credited after regularization.
Pro-rating rules depend on the written policy (and how it has been implemented historically).

Employee takeaway:

If you are at the 6-month mark and receiving paid leave credits, that is usually a company benefit—and should be verified against your handbook/contract.

7) “Regular employee” vs. “probationary employee” and leave entitlements

A probationary employee is still an “employee,” and is protected by labor standards generally. But for SIL specifically:

probationary status does not accelerate the SIL timeline; and
regular status does not automatically create SIL entitlement before one year.

Where regularization matters is more often policy-driven:

companies frequently tie leave privileges to regular status (e.g., “VL/SL begins upon regularization”).

8) Using SIL: purpose, scheduling, and approval

SIL is often described as leave that may be used for personal reasons (service incentive leave is not strictly illness-based). But operational rules still apply:

Employers may impose reasonable rules on scheduling, notice, and approval, especially where leave would disrupt operations.
However, policies cannot be used to nullify the benefit in practice (e.g., rules so strict that leave can never realistically be taken).

9) Conversion to cash (commutation)

A defining feature of SIL in Philippine labor standards practice is that unused SIL is commutable to cash—commonly at the end of the year or upon separation—subject to lawful company rules consistent with minimum standards.

Common situations where cash conversion appears:

Year-end conversion of unused SIL (or company leave treated as SIL).
Separation pay-out for accrued unused leave, depending on policy and the nature of the leave benefit.

Typical computation idea (conceptual):

Unused SIL days × employee’s daily rate (often based on the basic daily wage; in many payroll setups, statutory wage-related items like COLA may be treated according to payroll rules and wage orders).

Because disputes can arise over what exactly is included in the “daily rate,” employers typically follow their payroll policies and wage rules; employees often look at payslips and payroll computations to confirm.

10) Separation from employment: what happens to leave at resignation/termination?

Two questions matter:

(A) Did the employee accrue a legally demandable SIL benefit?

If the employee completed at least one year and is covered, unused SIL is typically payable.

(B) Does company policy grant additional leave pay-outs?

Many employers pay out unused VL but not SL, or cap conversions, or allow conversion only at year-end.
These are policy-driven, but once promised and consistently applied, they may become enforceable.

At only 6 months of service:

If the employee resigns at 6 months, a statutory SIL claim is usually weak because the one-year condition has not been met—unless the company voluntarily granted leave credits and the policy provides for pay-out, or the benefit has ripened into an enforceable practice/contract right.

11) Recordkeeping and burden in disputes

In leave disputes, documentation is everything. Typical proof sources include:

employment contract and offer letter,
employee handbook/company policy,
payslips and payroll registers (showing leave pay),
leave applications and approvals,
HR memos and announcements, and
consistent historical granting (company practice).

Labor standards enforcement is generally under the Department of Labor and Employment and related labor arbitral bodies depending on the claim type. Money claims for unpaid benefits are also subject to prescriptive periods (commonly discussed as a three-year window for many money claims under labor law frameworks).

12) Related legally mandated leaves employees sometimes confuse with SIL

Even if SIL is not yet due at 6 months, an employee may still be entitled to other legally mandated leaves if qualified, because these have different triggers and conditions:

Maternity Leave (expanded maternity leave law; generally not dependent on one-year service in the same way as SIL, but subject to statutory requirements and social security rules).
Paternity Leave (under Republic Act No. 8187; limited days, subject to conditions like marital status and cohabitation requirements under the law).
Solo Parent Leave (under Republic Act No. 8972 as amended; generally 7 working days subject to qualifications and documentary requirements).
Leave for Victims of Violence Against Women and their Children (under Republic Act No. 9262; commonly 10 days, with conditions).
Special Leave for Women (under Republic Act No. 9710; for qualifying gynecological surgery cases, with statutory conditions).

These leaves are separate from SIL and may apply even within the first year depending on the statute’s eligibility rules.

13) How to read a company policy correctly at the 6-month point

If your workplace says “paid leave starts after 6 months,” the key is to identify what kind of leave it is:

Is it explicitly called SIL?
- If yes, it may be an employer-granted early SIL or an internal labeling choice.
Is it VL/SL/Leave Credits?
- Then it is typically a company benefit, possibly satisfying SIL later (once the employee reaches one year), or running alongside SIL depending on how the company structured it.
Is it conditional on regularization?
- That’s a common internal rule: “probationary employees have no leave credits; regular employees start accruing.”
Does it mention conversion to cash?
- Some policies allow conversion; some disallow it for VL/SL but SIL conversion principles may still apply for the statutory minimum in covered cases.

14) Bottom line rules you can rely on

SIL is the core minimum paid leave standard for many private-sector employees, but it generally becomes due after one year of service, not after six months.
Six months is not the SIL trigger; it is usually tied to regularization and thus to company policy rather than a SIL mandate.
Employers may legally grant more generous leave earlier than the law requires, and once consistently granted or contractually promised, it may become enforceable.
Other special statutory leaves (maternity/paternity/VAWC/solo parent/special leave for women) operate independently from SIL and may apply on different eligibility timelines.