Benefits for employees are a vital component of the relationship between employers and employees. They are intended to assist guarantee workers are fairly compensated and appreciated by their companies. Considering the vital function that labor performs in business, worker welfare has become institutionalized in legislation through mandated company benefits. With that in mind, read on to learn more about mandated employee benefits in the Philippines and the significance they have for each firm.
What are mandatory benefits for employees in the Philippines?
The rights of employees are incorporated in the Philippine Labor Code to safeguard them from unfair employment practices. The Social Security System (SSS), PhilHealth, the Pag-IBIG Fund, 13th-month salary, vacation and sick days, maternity leave, benefits for retirement, and extra vacation benefits are among these perks.
Types of Compensation
Minimum Wage
Employees who work no fewer than 40 hours each week are entitled to at least the minimum pay. The NCR cost is P537.00 per day. However, certain wages may also differ according to region and job specification.
Overtime Wage
Workers who put in more than the customary eight hours will be paid a 25% bonus in addition to their usual salary.
Night Differential
Works from ten o’clock to six in the morning shall get a 10% bonus for every hour worked.
Premium Pay
When a worker is required to report to work on his or her scheduled rest day, he or she will earn a 30% premium in pay. Should the rest day fall on a holiday, the premium cost is increased to 50%.
13th-month Pay
Workers are required to receive an additional month’s pay before or on December 24th. Staff who resign are likewise eligible for 13th-month compensation, however, on a prorated scale.
Labor Code of the Philippines
Three primary governmental benefits are mandated for regular staff members engaged by private enterprises, including home workers earning at least P1,000 per month. Inequitable remuneration and excluding your workers from statutory benefits are violations of current labor laws that will result in penalties, fees, and even jail for violating corporations.
Understanding the Different Governmental Benefits
PhilHealth
The Philippine Health Insurance Corporation (PHIC), or PhilHealth, is a tax-exempt, state-owned, regulated body associated with the Department of Health (DOH). PhilHealth helps patients with hospital bills who are hospitalized at PhilHealth-accredited medical institutions.
Pag-Ibig
Commonly known as the Home Development Mutual Fund (HDMF) or “Pag-Ibig Fund,” the organization is a nationwide savings system intended to meet the requirements of Filipino workers for reasonably priced housing finance.
SSS
The organization is another national savings initiative that provides multiple advantages to workers. SSS contains features for maternity leave and disability benefits in addition to sick leave perks, pension pay, and bereavement allowances.
Vacation and Sick Leaves
Businesses are obligated to offer a set amount of vacation and sick leave days to their personnel throughout the year. The actual number of dates depends on the staff member’s duration of employment.
Special Leaves for Women
Female employees undergoing medical procedures are entitled to a maximum of two months of paid absence. Victims of abuse against women and their children are entitled to ten days of paid time off.
Maternity Leaves
The paid leave for maternity has been increased to a total of 105 days, with seven days transferred to dads as paternity leave. Single mothers have an extended 15 days of paid absence.
Paternity Leaves
Wedded fathers can request a maximum of seven days of compensated paternity leave to help their partner.
Special Leaves
Personnel are entitled to five incentive leave for service days each year. These can be used for leisure or absences due to illness.
Special Leaves and Wages
Auxiliary benefits, like mental health vacation, are popular amongst candidates for employment and a business “turn-on” for them because it conveys an upright narrative that prioritizes worker health and psychological well-being over financial gain.
Separation Pay
Staff members are entitled to severance compensation if their employment with the firm ended under fair circumstances. On the other hand, if a worker is fired for inappropriate behavior, violation of contract, or criminal action, they are unable to be compensated for this.
Retirement Pay
Personnel who are 60 to 65 and who have been working for the firm for a minimum of five years will be compensated when they reach the age of retirement. Retirement advantages are offered to staff members to guarantee they can sustain themselves once they leave their jobs. Benefits from retirement can be received as a one-time or as a periodic payment.
Recipients of Employee Benefits in the Philippines
Here are some of the recipients of government-mandated employee benefits in the Philippines:
- Workers below the age of 60 who are regular
- Household laborers who earn at least PHP1,000 per month
- Filipinos with employment for Philippine or foreign-based firms, either locally or abroad
- Foreigners under the age of 60 who are employed or live in the Philippines
Non-compliance with Mandatory Employee Benefits in the Philippines
Throughout the Philippines, there are various significant legal ramifications for a non-compliant firm regarding benefits for workers. Companies are responsible for not simply paying their staff fairly but also providing them with the perks mandated by Philippine labor regulations. Failure to comply will not be accepted without consequences; rather, it will result in fines and incarceration.
Regulatory Consequences for Non-compliance
Fines
Businesses that fail to take adequate care of their staff’s Social Security Fund contributions may face fines ranging from PHP5,000 to PHP20,000, as well as incarceration for up to 12 years. Overdue payments may also incur a penalty of 3% of the outstanding amount for each month of delay.
Penalties
Companies that fail to appropriately provide to a worker’s Pag-Ibig Fund incur a penalty of double what was anticipated, plus up to 6 years in prison sentence. Failure to pay may also incur a fee of 0.1% of the outstanding amount every day of delay.
Additional Charges
Firms who fail to appropriately participate in their workers’ PhilHealth funds face charges that vary from PHP5,000 to PHP10,000 for each impacted worker. Receiving payments late may also incur a penalty of 2% of the unpaid amount for every month of delay.
Important Dates for Employee Benefits in the Philippines
In order to avoid fines for missed remittances, keep track of each government agency’s share due dates for payments.
PhilHealth Deadlines
Transaction dates for PhilHealth depend on the final number of the PhilHealth business code:
- 0 to 4: the 11th to 15th of the month
- 5 to 9: the 16th to 20th of the month
Pag-Ibig Deadlines
The following are the Pag-IBIG Fund contribution deadlines, organized by the initial letter of the company’s or firm label:
- A to D: 10th to 14th day of the month
- E to L: 15th to 19th day of the month
- M to Q: 20th to 24th day of the month
- R to Z and 0 to 9: 25th to the last day of the month
Social Security System
For conventional employers, the due date for SSS participation contributions is on the final day after the corresponding month.
Finally, benefits for workers are an important aspect of each work environment since they guarantee that workers are appropriately compensated and respected by their employers. Businesses must follow labor regulations in order to preserve their employees’ rights and prevent legal ramifications. Learning these fundamental benefits for workers is critical for workers as well as employers, as it aids in adhering to Philippine labor regulations and offers an equitable and nurturing workplace for everybody.
“You don’t build a business. You Build People – and then people build the business.” – Zig Zigler
