Given the complexities of today’s modern life and the worsening traffic congestion in the Metro, it wouldn’t come as a surprise that the normal 8am to 5pm is no longer seen as feasible by most employees. As dictated by common practice, some employees would thus opt for an offsetting arrangement: where with the approval of their boss, they would just work overtime on some other day in order to make up for their undertime.
Let’s give a specific example.
Joey is an employee of X company. Based on their employment contract, he has a fixed 8-5 schedule.
Joey needs to accompany her mother to the hospital on Monday. Asking permission from his boss, Joey would go to work on 12nn – 5pm on Monday, but promises that he would just offset the time by spreading it over the week. Thus, he would work 8am-6pm for Tuesday to Friday.
The boss agrees to this arrangement; they even put it down into writing and sign. At payday, Joey gets his regular salary without overtime pay, since the total number of working hours have been matched, anyway.
Sounds simple, right? WRONG.
Offsetting on other days makes the employer liable for overtime pay
Despite the offsetting arrangement, the management is still liable to pay the overtime rate for each day that the employee worked over 8 hours, as mandated by law.
Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter.
The principle here is that the employee should not be deprived of the benefit of overtime pay. Under the law, the normal hours of work of any employee shall not exceed 8 hours. Anything beyond 8 hours should be paid the overtime premium.
Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight (8) hours a day. xxx
Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.
The Alternative: Flexi-time arrangement
The flexible time or flexi-time arrangement is an alternative so that the company would not be liable for the overtime rate, while still being compliant with the Labor Code.
Under the flexi-time arrangement, employees are not confined to a strict 8am to 5pm schedule. Thus, the employee can offset and make up for lost time within the day.
For instance, a late employee who goes to work on 11am would thus need to adjust and work until 8pm. Do take note however that the offset must be done within the day, must not be offset by overtime work on any other day.
The company has two responsibilities in this regard. First, the company’s legal team must make sure that this Flexi-time arrangement is written in the employee’s employment contracts. Second, the HR is obliged to enforce this rule strictly and provide awareness to the employees, and see to it that the working hours are being met.
Undertime may not be offset with overtime work on any other day, otherwise the employer is liable to pay the overtime rate for work rendered by the employee beyond 8 hours. As you can see, the HR is really an important position to the company because they would also need to know quite a bit about labor laws, to ensure that both the employer and employees’ rights and interests are protected.