Service Charges

Service charge is an additional pay given to covered employees by establishments that collect service charges for services rendered. Establishments collecting service charges are required to pay all of them to rank-and-file employees. Service charges shall be distributed completely and equally, based on actual hours or days of work or service rendered.

1. Concept

Service charges – refer to the additional payment for services collected by hotels, restaurants, and similar establishments. (Article 96, Labor Code, as amended by R.A. 11360)

These establishments include those entities operating primarily as private subsidiaries of the Government. (Section A, Chapter 7, 2022 DOLE-BWC Handbook on Workers’ Statutory Monetary Benefits, p. 24)

2. Covered and excluded employees

All employees, except managerial employees as defined by law, under the direct employ of the covered establishment, regardless of their positions, designations or employment status, and irrespective of the method by which their wages are paid, are covered. (Section B, Chapter 7, Ibid.)

a. Distribution

All service charges actually collected shall be distributed completely and equally, based on actual hours or days of work or service rendered, among the covered employees, including those already receiving the benefit of sharing in the service charges. (Section C, Chapter 7, Ibid.)

b. Those already enjoying the benefit prior/at effectivity of R.A. 11360

All employees who are already receiv...

 



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