As in any countries, the Philippines has its own labor laws to protect its workers. The Philippines Department of Labor and Employment (DOLE)is the government agency handling these matters. Anyone who hires full-time employees in the Philippines should follow the labor code issued by DOLE.
The Philippines labor code patterned to the international labor adopted by most countries worldwide except for few provisions that are unique to the Pilipino culture, namely:
1. The13th Month Pay. Every Pilipino worker should receive a 13th month pay every year of his service. This is equivalent to 1/12 of his/her monthly pay. This is usually given in the last month of the fiscal year (or December). However, if he/she works less than a complete year by December, the 13th monthy pay is calculated pro-rata, i.e., 1/12 times the actual number of months he/she worked for that particular fiscal year.
The 13th month pay is tax-free. Note that although it is equivalent only to 1/12 of a worker’s monthly pay, it is not restricted to this amount. Employers may increase this amount depending on the size of the company or as incentive for satisfactory performance of a worker.
2. Special Holidays observed in the Philippines.
The Philippine government declares some days as special non-working days whereby employers are to be given additional pay should they require their employees to work on these days. The rate will be 200% of their daily wages plus 30% more for work in excess of 8 hours.
These special non-working days are:
a. January 1st (New Years Day)
b. April 9th (Valor Day)
c. May 1st (Labor Day)
d. June 12th (Independence Day)
e. National Heroes Day every last Sunday of August
f. November 1st (All Saints Day)
g. November 30th (Andres Bonifacio Day)
h. December 25th (Christmas Day)
i. December 30th (Rizal Day)
j. December 31st (New Years Eve)
In addition, workers are also paid on the following days declared by the Philippines government as holidays or
paid non-workings days:
a. Maundy Thursday
b. Good Friday
c. August 23rd (Ninoy Aquino Day)
d. August 31st (Manuel L. Quezon Day)
e. December 24th (Special non-working day)
Workers are paid 100% of their daily salary even if they do not report for work on these days.
Other special religious or cultural holidays observed in the Philippines are Holy Week, Christmas, and
3. 6TH Month Contract.
Actually, the Philippine Labor Law applies only to hired workers after they have worked continuously for a company for 6 month. Before this, the workers are considered to be on probationary period and they are entitled yet to paid vacations, sick leaves, paid holidays, nor 13th month pay. In the Philippines, home-based workers (as those in the outsourcing business) are not yet considered as regular employees to whom the Philippine Labor Law applies. Hence, their employers are not bound to implement this law unless there exists a binding employee-employer agreement that all or some of these benefits are observed.
However, this being the case in outsourcing companies, it is highly commendable that employers grant some or most of these benefits to their virtual workers as a way of incentive to promote and maintain high morale among their workers. This may translate to greater productivity and faster growth ti their outsourcing business.