Do you sometimes wonder why call center agents have salaries higher than some employees? One of the reasons is the night shift differential pay. Under Philippine labor laws, an employee who works between 10 p.m to 6:00 a.m. should be paid a night shift differential of not less than ten percent (10%) of his regular wage.
However, the following employees are NOT entitled to the night shift differential pay:
1. Government employees
2. Those of retail and service establishments regularly employing not more than five (5) workers;
3. Domestic helpers and persons in the personal service of another;
4. Managerial employees;
5. Officers or members of a managerial staff; and
6. Field personnel and other employees whose time and performance are unsupervised by the employer.
It must be emphasized that the Cost of Living Allowance (COLA) is NOT included in the night shift differential pay.
For example, Joyce is a call center agent who works in Pasig City. She is paid a daily wage based on the minimum wage in the National Capital Region (NCR) which is P491.00 (this is the rate before 05 October 2017). It must be noted that the P491.00 minimum wage is broken down into P481.00 as basic wage and P10.00 COLA.
If Joyce works from 4 p.m. to 1:00 a.m., she will be paid P505.32 for that day based on the following premises:
1. The actual work rendered by Joyce is 8 hours since the Labor Code mandates that an employee be given not less than 1 hour time-off for meals. This 1 hour meal break is NOT compensable.
2. Joyce’s hourly rate for the period of 4 p.m. to 10:00 p.m. is P61.38 based on the following:
P491/8 hours = P61.38
3. Hence, Joyce’s compensation for the period of 4 p.m. to 10:00 p.m. is P306.90 based on:
4:00 p.m. to 10:00 pm is equivalent to 6 hours.
6 hours less 1 hour meal break is 5 hours
P61.38 (hourly rate) x 5 hours = P306.90
4. Joyce’s hourly rate for the period of 10 p.m. to 1:00 a.m. is P66.14 based on the following:
P491 less P10 (COLA) = P481.00
P481/8 hours = P60.13
P60.13 x 1.1 (night shift differential) = P66.14
5. Hence, Joyce’s compensation for the period of 10 p.m. to 1:00 a.m. is P306.90 based on:
10 p.m. to 1:00 a.m. is equivalent to 3 hours
P66.14 (hourly rate) x 3 hours = P198.42
6. Joyce’s total compensation for the entire workday is P505.32 (P306.90 + P198.42)
This is how night shift differential works in the Philippines
** Note: The minimum wage rate of P491 is the rate before 05 October 2017. Starting 05 October 2017, the minimum wage rate in the National Capital Region is P512 per day. **
Nicolas & De Vega Law Offices is a full-service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 4706126, +632 4706130, +632 4016392 or e-mail us at [email protected] .