WHAT IS OVERTIME PAY?

Philippine Concept Of Overtime Pay



WHAT IS OVERTIME PAY?
Definition of Overtime Pay

Overtime pay may be defined as an additional compensation awarded to an employee for work done in excess of eight hours. Every employee permitted or required to perform work beyond eight (8) hours a day shall be entitled to overtime pay. This additional compensation shall amount to the employee’s regular pay excluding bonuses and fringe benefits plus at least 25% thereof. In case an employee is permitted or forced to work on a holiday or rest day, his or her overtime pay shall amount to his or her regular basic salary plus 30% thereof.

The payment of overtime pay is, as a general rule, cannot be the subject of a waiver. It is a benefit granted to an individual by law and thus cannot be ordinarily subject to an agreement between the parties. Overtime pay may only be waived in certain instances such as when a compressed work week schedule has been implemented provided that the following requisites are present:
The waiver is voluntary on the part of the employee;
There is no diminution of the weekly or monthly take-home pay and fringe benefits of the employees;
The value of the benefits that will accrue in favor of the employees shall be commensurate with the overtime pay due to them under any proposed schedule;
That the overtime pay shall be due and demandable if the employees are permitted to work on a day not scheduled for work even when a compressed work week schedule is implemented;
The work does not involve strenuous physical exertion and there must be adequate rest periods;
Such arrangement is temporary in nature.

Most employment contracts today includes built in overtime provisions that guarantee the right of employees to overtime pay. In these instances, only upon submission of sufficient proof of services rendered beyond eight (8) hours shall the employee be entitled to compensation for his overtime pay.