FAIR CHARGING OF LEAVE BALANCES FOR "COMPRESSED" WORKWEEK

Updated: Jul 1, 2019


Department Advisory No. 4 Series 2010 Department issued by the Labor and Employment (DOLE) allows companies to operate under the "compressed" workweek schedules provided they have acquired prior permission. Under this work schedule, employees report to work less than six (6) days but the total number of work hours per week remain the same. Consequently, the work hours per day is increased from the standard 8 to 9.5 (or to some other value) to compensate for the reduction of number of work days per week.


Oftentimes, companies operating under this compressed workweek arrangement overlook the correct calculation of charging the Leave Balances when employees take paid Leaves (Time Off). Under the conventional, non-compressed work week scenario, the customary practice is to charge 1 day Leave whenever an employee takes a whole day off. However, under the compressed workweek scenario, it would be erroneous to charge the same 1 day when the Leave taken for that day exceeds 8 hours.


In other words, if an employee takes a Leave on a day that has a 9.5 hour work schedule, it would be incorrect to charge the same 1 day from his/her Leave Balance. This is because 1 day is defined as 8 hours. For a 9.5 hour work day, the correct charging should be as follows:


Similarly, if the work schedule for that day is 9.0 hours, the calculation would be:



Under this scenario, if 1 day were to be deducted from the Leave Balance, this would constitute an undercharging of the Leave Balances and would be unfair to the employer. In effect, undercharging of Leave Balances is essentially an additional expense to the company.



However, implementing this type of charging will not violate DOLE's regulations as this will exceed the statutory benefits. The employees must be made to understand that they are enjoying an additional benefit.


Disclaimer: The ideas, comments and suggestions expressed in this article are solely the author's and are not intended to replace proper consultation with DOLE officials. It is your duty to check with DOLE before implementing any of the above.

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