FAQ: Statutory Monetary Benefits

NOTICE: The following frequently asked questions and their answers (FAQ) cover all statutory monetary benefits or legally mandated benefits that an employer is required to pay to the employees. To be clear, the of the term statutory monetary benefits herein contemplates or includes: (a) 13th month pay, holiday pay, night shift differential pay, statutory monetary benefits, premium pay, retirement pay, separation pay, service charges; and (b) maternity leave, paternity leave, service incentive leave, solo parent leave, special leave for women, and VAWC leave.  Thus, statutory monetary benefits that will be coming from the Government are excluded (e.g. SSS benefits, PhilHealth benefits, and Pag-IBIG benefits).

1. In General

The following applies to all forms of statutory monetary benefits, whether as additional pay or as leave credits.

a. Entitlement

Are all employees entitled to statutory monetary benefits?

No, only covered employees are entitled to statutory monetary benefits. As to who are considered covered employees will depend on each statutory monetary benefit as they can be different. It is thus important to check each benefit whether a particular employee is covered or excluded.

May the conditions or requirements provided for by law to be entitled to a statutory monetary benefit be increased?

No, the conditions or requirements provided for by law to be entitled to a statutory monetary benefit cannot be increased. The conditions or requirements provided for by law are the minimum that the employee is required to satisfy in order to be entitled to a benefit.

Any agreement/contract or company policy increasing the conditions or requirements to be entitled to a statutory monetary benefit is voidor not valid for being contrary to law and public policy.

NB: This should not be confused with administrative requirements that the employer may have in place to ensure that an employee is properly authorized to do additional work that may result in the application of statutory monetary benefits. For example, an employer may have a requirement that only employees who have filled up an overtime work form and have obtained approval will be allowed to do overtime work and thus be paid overtime pay. In this situation, employees cannot simply continue working after regular work hours and expect overtime pay when they are not authorized to do so. They have to make sure that they proper authorization to do overtime work.

b. Payment

May employers refuse to pay statutory monetary benefits?

No, employers may not refuse to pay statutory monetary benefits as it is required by law.

Employers who refuse or fail to pay statutory monetary benefits will be liable for employee monetary claims, as well as face criminal liability.

May employees waive statutory monetary benefits?

No, covered employees are not allowed to waive statutory monetary benefits as it is provided for by law.

Any agreement/contract by the employer and the covered employees to waive statutory monetary benefits is voidor not valid for being contrary to law and/or public policy.

When should statutory monetary benefits be paid?

The statutory monetary benefits should be paid together with the salary covering the period when the benefits were due.

For example, holiday pay for June 12 (Independent Day) should be paid in the same period for the salary covering June 1 to 15.

May payment of statutory monetary benefits be “in kind” or substituted by non-monetary payments such as meals, goods, merchandise, etc.?

No, payment of statutory monetary benefits be “in kind” or substituted by non-monetary payments such as meals, goods, merchandise, etc.

Statutory monetary benefits should be paid in cash to the covered employees.

Any agreement/contract on payment of statutory monetary benefits via substitutes is voidor not valid for being contrary to law and public policy.

c. The Benefit

May favorable employee stipulations increase the statutory monetary benefits than what is provided by law?

Yes, favorable employee stipulations or terms may increase the statutory monetary benefits than what is provided by law. Favorable employee stipulations may be provided for via employment contracts, company policies, collective bargaining agreements (CBA), and other employment agreements, may increase overtime benefits than what is provided by law.

For example, the statutory overtime hourly rate at 25% may be increased to 30% through an employment contract, a company policy, a CBA, or other employment agreements.

May the benefits be decreased or lowered than what is provided by law?

The benefits cannot be decreased or lowered than what is provided by law.

Any stipulation or company policy decreasing or lowering the benefits than what is provided by law is void or not valid for being contrary to law and/or public policy.

The statutory monetary benefits are the minimum.

May the employer subsequently decrease or withdraw any increase previously made on a benefit and go back to the minimum provided by law?

No, the employer may not subsequently decrease or withdraw any increase previously made on a benefit and go back to the minimum provided by law.

Any employer action decreasing or withdrawing any increase previously made on a benefit and go back to the minimum provided by law is void or not valid for being contrary to law and/or public policy. In particular, it will violate the principle on non-diminution of benefits.

Once the employer gives a benefit or increases the one provided for by law, it cannot anymore be withdrawn or decreased.

See: Non-Diminution of Benefits

d. Burden of proof

Who has the burden of proof to show that an employee is entitled to a statutory monetary benefits?

The burden of proof shifts between the employer and the employee depending on the statutory monetary benefits. It is thus important to see which rule applies on a particular benefit.

See: Burden of Proof

2. Specific

For specific FAQ on statutory monetary benefits, refer to the following:

a. Additional Pay

FAQ: 13th Month Pay

FAQ: Holiday pay

FAQ: Overtime Pay

FAQ: Night Shift Differential Pay

FAQ: Premium pay

FAQ: Retirement pay, Private Sector

FAQ: Separation Pay

FAQ: Service Charges

b. Leave Credits

• FAQ: Maternity Leave

• FAQ: Paternity Leave

• FAQ: Service Incentive Leave

• FAQ: Solo Parent Leave

• FAQ: Special Leave for Women

• FAQ: VAWC Leave

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