Am I entitled to night shift differential, and how is it computed?

Why

Article 86 of the Labor Code is one sentence long: every employee shall be paid a night shift differential of not less than 10% of their regular wage for each hour of work performed between ten o'clock in the evening and six o'clock in the morning. Two words carry the weight. 'Each hour' means it is computed hour by hour rather than as a flat allowance for the shift, so an employee whose shift ends at 11:00 PM is owed the differential for that one hour. 'Not less than' means 10% is the statutory floor, and many collective bargaining agreements and company policies in the BPO sector pay considerably more.

The differential is separate from every other premium and does not absorb them. If you work overtime during night hours, you are owed both the overtime premium and the night differential. If those hours fall on a rest day, a special day or a regular holiday, the differential is taken as 10% of the hourly rate applicable on that day, which is already 130%, 130% or 200% respectively. Computing the night differential against your bare ordinary rate is the single most common underpayment in shift work.

A worked example. Take an hourly rate of PHP 100. An ordinary night hour between 10:00 PM and 6:00 AM pays PHP 110. A night hour that is also overtime pays the overtime rate of PHP 125 plus 10% of it, or PHP 137.50. A night hour worked on a regular holiday pays the holiday rate of PHP 200 plus 10% of it, or PHP 220.

Coverage follows the same exclusions as the rest of the working-conditions provisions. Under Article 82, government employees, managerial employees, field personnel, members of the employer's family dependent on them for support, domestic workers, persons in the personal service of another, and workers paid by results are outside it. Managerial status is decided by the powers actually exercised, not by the job title, so a team lead in a call centre with no authority to hire, discipline or lay down policy is very unlikely to be a managerial employee in the legal sense.

The right cannot be waived. Like overtime pay, night shift differential is a benefit fixed by statute, so an agreement to work night hours without it, or to fold it into a 'shift allowance' that turns out to be smaller, does not defeat the claim.

Domestic workers are covered by their own law rather than by Article 86. The Batas Kasambahay, RA 10361, sets their conditions of work separately.

What to do

• Count your actual hours falling between 10:00 PM and 6:00 AM per shift, not the whole shift. Partial hours in the window still count.
• Check whether your payslip shows night differential as its own line. Where it is buried inside an allowance, ask HR in writing for the hourly computation.
• Verify the base being used. On a holiday or rest day the 10% must be taken on that day's higher rate, not on your ordinary rate.
• Confirm the differential was also applied to night hours that were overtime. These are two separate entitlements and both are due.
• Unpaid night differential is a money claim with a three-year prescriptive period from each payday. File a Request for Assistance with DOLE under SEnA.

The law behind this