Are Managers Entitled to Overtime Pay in the Philippines?

Question from Pogi, Are Managers Entitled to Overtime Pay in the Philippines?

Answer from AI:

In the Philippines, the rules regarding overtime pay are governed by the Labor Code of the Philippines. However, not all employees are entitled to overtime pay. The entitlement to overtime pay depends on the nature of the employee’s duties and responsibilities, not on their method of payment (salary or hourly wage).

Who is Entitled to Overtime Pay?

According to Article 82 of the Labor Code, managerial employees are not entitled to overtime pay. A managerial employee is defined as one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions.

How is Overtime Pay Calculated?

For those who are entitled to overtime pay, it is calculated as follows:

• For work performed beyond eight hours on ordinary days, employees are entitled to an additional 25% of their hourly rate.
• For work performed beyond eight hours on holidays and rest days, employees are entitled to an additional 30% of their hourly rate.

What if a Manager Works Overtime?

Even if a manager works beyond their regular working hours, they are not entitled to overtime pay under the Labor Code. This is because their salary is presumed to compensate them for all the hours they work, including any additional hours. However, companies may have internal policies that provide additional compensation for managers who work beyond their regular hours.

Note: This information provides a general overview of the law and should not be taken as legal advice. The application of the law can vary widely depending on the specific facts and circumstances. For personalized advice, it is recommended to consult with a legal professional or labor expert in the Philippines.

For more information, you can refer to the Labor Code of the Philippines.