It’s been said that a company’s greatest asset walks out the door at the end of each workday. Given the crucial role manpower plays in business, employee welfare has been enshrined in law through mandatory benefits from employers.
If you’re planning on starting a business, knowing these benefits can help you better plan your finances. Below is a quick overview of said entitlements:
Compensation
Minimum wage: Any employee who works at least 40 hours per week is entitled to receive at least minimum wage. In the NCR, that’s P537.00 per day but rates vary per region.
Overtime pay: Employees who work beyond the standard eight hours are to receive a 25% premium on top of their regular wage.
Premium pay: If an employee must work on his assigned rest day, he will receive a 30% premium on his usual wage. If the rest day also coincides with a holiday, the premium shall be 50%.
Night differential: Working between 10 p.m. and 6 a.m. shall merit a 10% premium for each hour rendered.
13th month pay: Employees must receive an extra month’s worth of basic wages on or before December 24th. Resigned employees are also entitled to a 13th-month pay but on a pro-rated basis.
Separation pay: An employee who departs from a company under reasonable conditions can claim a separation pay. This does not apply if the employee is terminated due to misconduct or illegal actions.
Retirement pay: Employees who reach 60 years old and have served for at least five years will receive a retirement pay amounting to half a month’s salary for each year of service.
Leaves
Meal breaks: Employers must give workers 60 minutes per day for regular meals.
Service incentive leaves: Employees shall be given five service incentive leaves per year. These may be used as either vacation or sick leaves.
Maternity leave: Paid maternity leave has been extended to 105 days, seven of which are transferable to fathers as paternity leave. Single moms are entitled to an additional 15 days of paid leaves.
Paternity leave: Married fathers can file for 7 days of paid paternity leave to assist their spouse.
Special leaves for females: Female employees who undergo gynecological surgery will get up to two months of paid leaves. Victims of violence against women and their children get 10 paid leave credits.
Contributions
Social Security System (SSS): The current rate is 11% of basic monthly salary, with a cap of P16,000. Employers pay 7.37% while employees cover the remaining 3.63%.
Home Development Mutual Fund (Pag-IBIG): Contribution amounts to P100 each month.
Philippine Health Insurance Corporation (PhilHealth): Depending on the employee’s salary, contributions can range from P175 to P875 per month.
While these benefits might seem daunting at first, remember that these are all meant to keep employees happy and loyal to your firm. For more guidance on these benefits or on starting a business, don’t hesitate to get in touch with Duran & Duran-Schulze at (+632) 478 5826 or via info@duranschulze.com. Our team looks forward to answering any questions you may have about corporate legal requirements.