Philippines Overtime Laws

The Philippine overtime laws set forth provisions concerning the maximum number of hours an employee can work in a day or week, the overtime rate pay, and the conditions under which overtime may be required or voluntary.

This article provides a comprehensive overview of overtime laws in the Philippines, including their legal framework, provisions, and implications for both employers and employees.

This Article Covers:

Philippines Overtime Rates

Overtime rates in the Philippines are governed by Presidential Decree No. 442 or the Labor Code of the Philippines, which outlines provisions regarding overtime work, including the computation of overtime pay and the conditions under which it applies.

According to the Labor Code, employees are entitled to additional compensation for work performed beyond the regular eight hours of work in a day. The rate for overtime work is computed as an additional percentage of the employee’s regular rate. The overtime rate is generally computed as follows:

  • For work performed on regular days: An additional 25% of the regular hourly rate.
  • For work performed on rest days, special days, or regular holidays: An additional 30% of the regular hourly rate.

The standard work hours in the Philippines are eight hours a day, not exceeding 48 hours a week. Any work performed beyond these regular hours is considered overtime.

Overtime Entitlement in the Philippines

Eligibility of employees for overtime pay in the Philippines is determined by the provisions outlined in the Labor Code. Most non-exempt employees, including rank-and-file workers, are entitled to overtime pay for work performed beyond the standard 8 hours per day or 48 hours per week.

Employees covered by the Collective Bargaining Agreement (CBA) negotiated between their employers and labor unions may be entitled to overtime pay based on the terms and conditions specified in the agreement.

Overtime Exceptions and Exemptions in the Philippines

In the Philippines, these exceptions and exemptions define certain categories of employees who may be exempt from receiving overtime pay or who may have different rules applied to their overtime compensation. This includes:

  • Government employees: These are individuals working for the national government or its subdivisions, including government-owned or controlled corporations (GOCCs) created under special laws or with original charters.
  • Managerial employees: These employees manage the company or a department, regularly supervise at least two employees, and have authority over hiring, firing, and promotions. To qualify as exempt from overtime pay, all three conditions must be met.
  • Managerial staff: These are team members who assist managers. Their main duties must relate to company policies, involve independent judgment, and support management functions. They may also handle special assignments and must spend no more than 20% of their time on non-managerial work.
  • Kasambahay and persons in the personal service of another: Individuals engaged in domestic labor within an employment framework, such as household helpers, caretakers, cooks, gardeners, or laundry attendants may be exempt. This excludes those who perform domestic tasks sporadically or occasionally, rather than on a regular occupational basis.
  • Field personnel: Employees, including those hired on a task or contract basis, purely commission basis, or receiving a fixed compensation regardless of the time invested, whose activities and performance are not directly supervised by the employer may be considered exempt from overtime pay.

Calculating Overtime Pay for Rest Days, Special Days, and Holidays

Rest Days

Employers must provide a rest period of not less than 24 consecutive hours after every six consecutive normal work days. An employee who is made or permitted to work on their scheduled rest day must be paid with an additional compensation of at least 30% of their regular wage.

If an employee’s work nature has no scheduled regular work days and rest days, the employee must be paid an additional compensation of at least 30% of their regular wage for work performed on Sundays and holidays.

If an employee’s scheduled rest day falls on a holiday and they are required to work, the employee is entitled to an additional compensation of at least 50% of their regular wage.

Special Days

In the Philippines, special holidays refer to non-working days declared by law or proclamation that are distinct from regular holidays.

During special days, employees who are required or permitted to work are entitled to overtime pay of not less than 30% of their regular wage. Further, for any hours worked exceeding 8 hours conducted on special holidays or rest days not falling on regular holidays, the employee should receive extra compensation for overtime equivalent to their rate for the initial 8 hours of work plus at least 30% of that amount.

Special (Non-Working) Holidays in the Philippines for 2025 include:

  • Chinese New Year – January 29 (Wednesday)
  • Black Saturday – April 19 (Saturday)
  • National and Local Elections – May 12 (Monday)
  • Proclamation No. 729 – July 27 (Sunday)
  • Ninoy Aquino Day – August 21 (Thursday)
  • All Saints’ Day Eve – October 31 (Friday)
  • All Saints’ Day – November 1 (Saturday)
  • Feast of the Immaculate Conception of Mary – December 8 (Monday)
  • Christmas Eve – December 24 (Wednesday)
  • Last Day of the Year – December 31 (Wednesday)

Holidays

Any employee who is made or permitted to work on any regular holiday, not exceeding eight hours, is entitled to at least 200% of his regular daily wage. If the holiday falls on the scheduled rest day of an employee, the employee is entitled to an additional premium pay of at least 30% of their 200% wage. Regular holidays in the Philippines for 2025 are the following days:

  • New Year’s Day – January 1 (Wednesday)
  • Eid al-Fitr – April 1 (Tuesday)
  • Araw ng Kagitingan – April 9 (Wednesday)
  • Good Friday – April 18 (Friday)
  • Labor Day – May 1 (Thursday)
  • Eidul Adha (Feast of Sacrifice) – June 6 (Friday)
  • Independence Day – June 12 (Thursday)
  • National Heroes Day – August 25 (Monday)
  • Bonifacio Day – November 30 (Sunday)
  • Christmas Day – December 25 (Thursday)
  • Rizal Day – December 30 (Tuesday)
  • Compensatory Time in the Philippines

Administrative Order No. 103, issued by the Civil Service Commission (CSC), allows government agencies to implement a Compensatory Time-Off (CTO) scheme as an alternative to the payment of overtime compensation, subject to certain conditions and limitations.

However, it is important to note that the implementation of CTO is subject to the approval of the head of the agency and should follow the guidelines outlined in AO No. 103. It is not a universal practice across all government offices and is subject to specific conditions and limitations outlined in the order.

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Philippines Time Tracker

Emergency Overtime in the Philippines

In the Philippines, emergency overtime work may be required of any employee by an employer due to the following circumstances:

  • During times of war, or when a national or local emergency has been declared by the National Assembly or the Chief Executive;
  • When necessary to prevent loss of life, property, or imminent danger to public safety due to emergencies such as serious accidents, fires, floods, typhoons, earthquakes, epidemics, or other disasters;
  • In cases where urgent work on machines, installations, or equipment is essential to avoid significant loss or damage to the employer or other similar causes;
  • When work is needed to prevent loss or damage to perishable goods; and
  • When the completion or continuation of work initiated before the eighth hour is crucial to prevent obstruction or harm to the employer’s business or operations.

Any employee required to render overtime work under these circumstances is entitled to additional compensation.

Penalties for Unpaid Overtime in the Philippines

Employers who fail to properly compensate their employees for overtime work may be subject to penalties and liabilities under the Labor Code. Any person who violates provisions of the Labor Code shall be punished by a fine of not less than PHP 1,000 no more than PHP 10,000 and/or imprisonment at the discretion of the court.

Those who intentionally withhold overtime pay may also face:

  • Payment of Back Wages: Full payment of unpaid overtime with legal interest.
  • Administrative Penalties: DOLE may issue fines or require corrective measures, such as better timekeeping or payroll systems.
  • Criminal Liability: Repeated or fraudulent acts, like falsifying records, may result in criminal charges, though these cases are less common.

Statute of Limitations for Unpaid Overtime in the Philippines

Under the Labor Code, Article 291 states that the statute of limitations for unpaid overtime claims in the Philippines is three years. This means that employees have three years to file a claim or request assistance with the Philippine Department of Labor and Employment (DOLE).

Legal Cases Relating to Overtime Compensation in the Philippines

Baked Goods Company Agrees to Pay Employees Over PHP 193,000

In Marby Food Ventures Corporation et al. v. Roland dela Cruz et al., a Philippine baked goods company faced complaints from its drivers and a salesman for underpayment of wages, nonpayment of overtime, 13th-month pay, holiday pay, service incentive leave pay, and other benefits. The employees also claimed that illegal deductions had been made from their salaries.

The National Labor Relations Commission (NLRC) ruled partly in favor of the employees, ordering Marby Food Ventures to pay ₱193,392.28 in wage differentials and 13th-month pay, plus attorney’s fees.

Court Decision: The Court of Appeals (CA) upheld the NLRC ruling and further directed the company to reimburse illegal deductions and recognize the workers as regular employees entitled to overtime pay, holiday pay, and service incentive leave pay.

The Supreme Court (SC) later affirmed the CA’s decision with modification, removing the double indemnity penalty since Marby had not been properly notified of that sanction.

Key lessons from this case:

  • Employers must ensure the proper classification of employees to avoid labor law violations.
  • Employers must ensure compliance with labor laws regarding overtime pay, holiday pay, and other benefits owed to employees.
  • Deductions from employees’ salaries must be authorized by law or with the written consent of employees.
  • Employers should maintain accurate records of employees’ work hours and payments to avoid disputes over unpaid benefits.

Learn about Labor Laws in the Philippines through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.