Understanding Compressed Work Weeks: A Guide for HR and Payroll Professionals
- Manny Sia
- Jan 16, 2024
- 1 min read
What Are Compressed Work Weeks?
In a compressed work week, employees work fewer than six days but maintain the total number of work hours for the week. This means that while the standard workday is typically 8 hours, in a compressed schedule, each workday might extend to 9.5 hours (or another adjusted duration). This adjustment compensates for fewer working days in the week, ensuring that the total weekly work hours remain constant.
Compliance with DOLE Regulations
According to Department Advisory No. 4, Series 2010, issued by the Department of Labor and Employment (DOLE), companies can implement compressed workweek schedules with prior authorization. This ensures that such schedules align with labor laws and regulations.
Calculating Leave in Compressed Work Schedules
A key aspect where compressed work schedules differ significantly from traditional schedules is in calculating leave. Under a standard workweek, a full day's leave typically equates to 8 hours. However, in a compressed schedule where a workday might be 9.5 hours, charging only one day of leave for a full day's absence would be inaccurate.
For instance, if an employee takes a day off on a 9.5-hour workday, the leave should be calculated as follows:
Leave Deduction: 9.5 hours / 8 hours (standard day) = 1.1875 days
Similarly, for a 9-hour workday, the calculation would be:
Leave Deduction: 9 hours / 8 hours (standard day) = 1.125 days
Neglecting this adjusted calculation can lead to miscalculations in leave balances, potentially disadvantaging the employer. It's essential to account for these differences to ensure fair and accurate leave charging.
Calculating Absences During Compressed Work Weeks
In a compressed work week scenario, when an employee is absent, the deduction is based on the total hours scheduled for that day. For example, if an employee is scheduled to work for 9 hours on a particular day and is absent, 9 hours will be deducted from their work hours.
Overtime Calculation in Compressed Work Weeks
The approach to calculating overtime (OT) in a compressed workweek differs from the traditional method:
For Regular Work Days:
There is no OT premium for the duration extending from the first 8 hours until the end of the scheduled workday. OT premiums are only applicable after the scheduled work hours for the day. For instance, an employee working from 8 AM to 6 PM (including a 1-hour lunch break) in a 9-hour shift will not earn OT premiums for the time between 5 PM to 6 PM.
For Worked Holidays:
Holiday premiums apply only to the first 8 hours of work. Hours worked beyond 8 on a holiday are subject to usual holiday OT premiums. For example, in a 9-hour shift on a legal holiday, the first 8 hours (8 AM to 5 PM) would earn a holiday premium, while the time from 5 PM to 6 PM would earn a holiday-OT premium.
For Non-Worked Holidays:
a. Regular Holidays that fall on a Work Day
- Monthly and Daily paid employees will be paid for one day or 8 hours.
b. Regular Holidays that fall on a Rest Day
- Monthly and Daily paid employees will receive an additional one day's pay or 8 hours.
c. Special Holidays that fall on a Work Day
- Monthly paid employees will be paid for one day or equivalent to 8 hours.
- Daily paid employees are UNPAID since this is No-Work-No-Pay
d. Special Holidays that fall on a Rest Day
- Monthly paid employees will be paid for one day or equivalent to 8 hours.
- Daily paid employees are UNPAID since this is No-Work-No-Pay.
For Worked Rest Days and Combined Holiday-Rest Days
Rest days are computed using standard computation. The first 8 hours on a rest day earn rest day premiums and work beyond 8 earns the RD/RD-HOLIDAY OT premiums.
EDS HROS Integration
All these calculations for compressed work weeks are fully automated in the EDS HROS system. This integration ensures accuracy and relieves payroll staff from complex manual computations. For more details on this feature, please reach out to our Sales team.
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