Philippines HR Glossary

DOLE conducts routine and complaint-based workplace inspections through its Labour Law Compliance System (LLCS). Non-compliant employers can be issued compliance orders requiring correction within a set period. Establishments with 10 or more employees must register with DOLE and submit mandatory reports (e.g., RSIA, WAIR). DOLE also administers the SENA (Single Entry Approach) mechanism for rapid dispute resolution before formal litigation.

The Labour Code establishes the 8-hour standard workday and 48-hour workweek (6 days), prescribes overtime and holiday pay rates, and sets minimum leave entitlements (Service Incentive Leave). DOLE issues implementing rules and regulations (IRRs) and Department Orders to clarify application. The Code covers all private-sector employees except domestic workers (covered by the Kasambahay Law) and government employees (Civil Service Commission).

Monthly SSS contributions in 2025 are 14% of the monthly salary credit (employer: 9.5%, employee: 4.5%), with a monthly salary credit range of PHP 4,000–30,000. Employers must remit contributions by the applicable deadline based on their employer number suffix, or face a 3% monthly penalty on overdue amounts. Employees can check their SSS contributions via the My.SSS portal; unremitted contributions are a common worker complaint.

The PhilHealth premium rate is 5% of monthly basic salary (employer: 2.5%, employee: 2.5%), subject to a salary floor (PHP 10,000) and ceiling (PHP 100,000), resulting in a minimum contribution of PHP 500 and a maximum of PHP 5,000 per month. Contributions are due by the last day of the month following the applicable period. Non-remittance results in a 3% monthly surcharge and possible disqualification of employees from PhilHealth benefits.

Employees and employers each contribute 2% of monthly compensation to Pag-IBIG, with the employee's monthly contribution capped at PHP 100 (on salaries up to PHP 5,000) and 2% for those earning above PHP 5,000. Employers remit contributions by the 15th (for regular employers) or 25th (for small employers) of the following month. Pag-IBIG membership is mandatory for all private-sector employees earning more than PHP 4,000/month.

The 13th Month Pay is mandated under Presidential Decree No. 851 and enforced by DOLE. It is tax-exempt up to PHP 90,000 per year (combined with other benefits). Employers may split the payment: half on or before 30 June, and the remainder by 24 December. Non-compliance is a DOLE violation subject to fines and compliance orders. Managerial employees are not covered, but many companies extend the benefit voluntarily.

The NSD applies on top of any applicable overtime or holiday premium. For example, an employee working overtime at night earns 10% NSD on the overtime rate, not the basic rate. Managerial employees and household helpers are excluded. DOLE inspections frequently uncover NSD underpayment as a common Labour Code violation, particularly in BPO and hospitality sectors with heavy night operations.

Unused SIL at the end of the year must be converted to cash at the employee's daily rate and paid out — SIL cannot be forfeited. Establishments already providing at least 5 days of vacation leave and/or sick leave per year are exempt from the SIL requirement. SIL is monitored by DOLE and is a common basis for worker complaints and DOLE compliance orders against employers who fail to provide or encash unused leave.

The amount depends on the cause: one month's pay or one month per year of service (whichever is higher) for redundancy; one-half month per year of service for retrenchment, closure not due to serious losses, or disease. No separation pay is owed for termination for just cause (e.g., serious misconduct). Years of service are rounded up if 6 months or more. Non-compliance can be brought before the NLRC (National Labor Relations Commission).