HR & Labor
Employees must be paid at least the statutory minimum wage.
Minimum wage rates vary by region, and whether the employee is an agricultural or nonagricultural worker.
Salaries of managerial and professional employees vary widely according to the employee’s type of work, function, and position; and the employer’s status, industry classification, union status, and location.
Contributions to pension trusts maintained for employees are deductible. Contributions covering the cost of pension payments during a taxable year are deductible in full in that year. The deduction for contributions in excess of that amount must be apportioned in equal parts over a period of ten consecutive years beginning with the year in which the transfer or payment is made.
Employee pension trusts established under conditions laid down by law are exempt from income tax.
Termination of employment
An employer may terminate the services of an employee for just cause, such as serious misconduct or gross and habitual neglect of duties. Applying the two notices and hearing rule, the dismissed employee should be notified initially of the ground for termination, specifying the particular act or omission constituting the ground. The employee is then entitled to be heard and present his defense. Thereafter, if there is still a valid ground for the dismissal, the notice of termination must be given to the employee. Employees dismissed for just cause are not entitled to any separation pay.
If an employee is illegally dismissed, suspended, or laid off, the DOLE may, after due process, order the reinstatement with back wages of the employee, or require the payment of termination pay, other benefits and remedies that it considers equitable under the circumstances.
Employees may also be terminated for other causes authorized under the Labor
Code, such as the installation of laborsaving devices or redundancy. The employee must be given one month’s notice of termination, and the DOLE must also be advised. The employee will be entitled to
separation pay equal to the greater of one month’s pay or one-half month’s pay for every year of service depending on the reason for termination.
Employees may also be separated in certain circumstances for ill health. The employee will be entitled to separation pay equal to one month’s pay or one-half month’s pay for every year of service, whichever is higher.
Two weeks paid sick leave per year.
Most labor agreements contain provisions for the accumulation of paid vacation and their commutation (i.e., exchange of comparable pay for vacations not taken), normally within two years from the date of employment.
The President may also declare additional days to be non-working days.
An employee with at least one year of service is entitled to an annual paid service incentive leave of at least five days.
However, the prevailing practice is to
provide two weeks paid vacation leave
Paid off holidays
Statutory holidays granted with full pay to monthly paid employees are listed below:
(The following are designated as regular holidays and nationwide special days, unless otherwise modified by law, order, or proclamation.)
•New Year’s Day - 1 January
•Maundy Thursday - Movable date
•Good Friday - Movable date
•Eidul Fitr - Movable date
•Araw ng Kagitingan (Bataan and Corregidor Day) - 9 April
•Labor Day - 1 May
•Independence Day - 12 June
•Ninoy Aquino Day - 21 August
•National Heroes Day - Last Monday of August
•Eid’l Adha - Movable date
•All Saints Day - 1 November
•Bonifacio Day - 30 November
•Christmas Day - 25 December
•Rizal Day - 30 December
•Last day of the year - 31 December
Many large establishments voluntarily provide paid sick, vacation and holiday leaves, private pension plans, subsidized meals, rice and transportation allowances, and group hospitalization and group life insurance benefits.
In some establishments, executives and other high-ranking employees are provided with housing and car plans. Expatriate executives usually enjoy greater fringe benefits than their local counterparts
A domestic or a resident foreign corporation is required to file income tax returns on a quarterly basis. Within 60 days from the close of each of the first three quarters in its taxable year, the corporation must file in duplicate a return summarizing its gross income and deductions for the year to date. A final annual income tax return must be filed on or before the 15th day of the fourth month following the close of the tax year.
The place where a return must be filed is also prescribed. Filing a return in the wrong location may attract a penalty of 25% of the tax due, even though the return might have been filed and the tax paid on the due date.
The SSS was created to provide private employees and their families with protection against disability, sickness, old age, and death. The Government Service Insurance System (GSIS) is an
equivalent system for government employees.
(See Appendix XI on Page 224 for Social Security System contributions)