By law, every employee is entitled to a Night Shift Differential Pay of at least 10% of his regular wage for work performed during the night shift.
According to P.D. 442, Labor Code, Article 86, Section 2, Rule II, Book Three of the Omnibus Rules Implementing the Labor Code, and Section 1 of Republic Act No. 11701 or the Night Shift Differential Pay for Government Employees, Night Shift Differential Pay is given to:
(1) Employees who work at any time from 10:00 PM to 6:00 AM the following day and
(2) Government employees who work at any time from 6:00 PM to 6:00 AM the following day.
More importantly, it is not optional for companies and government entities to grant such pay, as this is required by law. It is the right of the employees to receive such indemnity if they work the night shift.
The law recognizes the possible effects on an employee’s health while working the night shift. It is important to note that night shift differential pay is not a bonus or incentive but a form of indemnity.
Employees are entitled to night shift differential pay regardless of status (regular, probationary, project, etc.). Similarly, whether employees are paid monthly or daily is irrelevant, the rules for Night Shift Differential Pay shall still apply.
Who cannot receive night shift differential pay?
- Government employees whose work schedule falls between 6:00 AM and 6:00 PM (Day Shift). However, they may receive overtime pay for services rendered beyond the required eight hours.
- On-call government employees and uniformed personnel who must serve and/or are called to serve anytime
- Employees in retail and service establishments that regularly employ only a maximum of five (5) people
- Employees providing needed personal service of another person or other people
- Managerial employees
How to compute night shift differential pay in the Philippines?
Employee’s Daily Wage: ₱1,000
Employee’s Hourly Wage: ₱1,000 / 8 hours = ₱125
Assuming there is no overtime,
Employee’s Work Schedule: 10:00 PM to 6:00 AM
Number of hours worked between 10:00 PM to 6:00 AM: 8 hours
Night Shift Differential: Hourly Wage x Number of NS Hours Worked x 10%
= ₱125 x 8 hours x 0.10
= ₱100
Total Take Home Pay: Daily Wage + NSD
= ₱1,000 + ₱100
= ₱1,100