Employment Contracts and How to Pay Daily Waged Employees

Hi,

I'm about to put up a business and would like to do it the right way. Hope it's alright to ask for advice.

In the business I will be hiring labor workers who are usually paid daily and admin on monthly, my questions are:

1. What's the difference of the daily paid employee vs monthly paid employee?(besides the fact that its daily and monthly)

2. My understanding for Regular employees is that they are paid a basic salary every month and increases if theres a Holiday and decreases if there are absences.

For Daily paid employees, is the company required to pay a basic salary like the monthly paid employees or do we only pay for days they work (no work no pay, rest days not paid)? If yes, Is there a minimum number of days required by law that we should pay?

If the worker only works 5 days the entire month, will he get paid 5 days only or is
there a minimum?

Are they considered regular employees?

Can I enforce a 10 day vacation leave / sick leave / SIL for the year on them?
Can they be Terminated based on not reporting for work without advice if daily paid?
What should our contract look like for a Daily Paid Regular Employee?


Thanks so much in advance!!

1. by concept, only managers or managerial employees are offered monthly wages since they're considered to be paid everyday of the month. Daily paid employees use either the factor 313 days per year (for working mon-sat) or the 261 days per year (for working mon-fri). monthly employees use the 365 days factor.

2. regular workers or not, if you are discussing monthly paid employees, they are paid as you had stated. computing for monthly paid employee, you usually count the number of days absent for them. for daily paid employees, you count the number of days they reported to work then multiply them with the amount for their daily wages. then add holiday and premium pays.

daily = no work no pay basis, they are paid by the number of days they reported for work.

if the worker works only 5 days the entire month, they are only paid for the said 5 days.

regular employees are those that had worked for you more than 6 months.

regarding vl/sl/SIL, law only states 5 days SIL per year.
what do you mean enforce? btw, if they do not use any SIL, you have to convert it to cash.

regarding termination for not reporting to work - follow due process

contract - consult your attorney/legal

mikos23 wrote:1. by concept, only managers or managerial employees are offered monthly wages since they're considered to be paid everyday of the month. Daily paid employees use either the factor 313 days per year (for working mon-sat) or the 261 days per year (for working mon-fri). monthly employees use the 365 days factor.

2. regular workers or not, if you are discussing monthly paid employees, they are paid as you had stated. computing for monthly paid employee, you usually count the number of days absent for them. for daily paid employees, you count the number of days they reported to work then multiply them with the amount for their daily wages. then add holiday and premium pays.

daily = no work no pay basis, they are paid by the number of days they reported for work.

if the worker works only 5 days the entire month, they are only paid for the said 5 days.

regular employees are those that had worked for you more than 6 months.

regarding vl/sl/SIL, law only states 5 days SIL per year.
what do you mean enforce? btw, if they do not use any SIL, you have to convert it to cash.

regarding termination for not reporting to work - follow due process

contract - consult your attorney/legal

Thanks mikos23!!

Enforce meaning create a company code that would include a statement that says "5 days allowed VL/SL/SIL in a year, beyond that will be ground for sanctions, suspensions and terminations" is that possible or does not make any sense to have this in place?

Regarding the 261 days factor rate per year, how is the factor rate used?

How does the factor rate fall on a daily paid employee, for example the worker worked 10 days every month only (Total of 120 for the year), How does the Factor rate play a role in this?

Also, can an Administrative job also be a daily paid employee given than you mentioned in #1 that by concept only managers are offered monthly wages?

i don't get your explanation on enforcing. can you clarify further.

factor rate is to get the equivalent monthly rate (EMR) of the employees. The EMR is usually to compute the other benefits that is based on how much employee receive per month. i.e. at 502.00 per day, EMR for 5 day work week will be (502 x 261 / 12) 10,918.50, you can compute the mandated benefits of the employee (sss,philhealth) contribution based on this EMR.

if employee works 10 days per month, rate of Philhealth contribution is the same because it is based on the EMR of the employee. you can verify this with philhealth.

the concept for monthly rate is for managerial is because they usually don't get paid overtime, holiday or premium pay. i.e. if you gave a monthly rate to rank and file, and they work during the holiday, there is usually a problem in the computation. most payroll masters computation, upon audit, shows over payment. if you pay it correctly, Rank and File will complain under payment. To simplify computation and matters, i recommend what i stated before.

hope this helps