Below is a comprehensive discussion of how rest day overtime pay is calculated under Philippine labor laws when an employee has incurred absences. This write-up synthesizes relevant legal provisions, Department of Labor and Employment (DOLE) issuances, common company practices, and practical examples. Always note that specific company policies, collective bargaining agreements (CBAs), or employment contracts may supplement (or slightly modify) these principles.

1. Legal Basis

Labor Code of the Philippines (Presidential Decree No. 442, as amended)
- Article 91 (formerly Article 93): Governs rest days.
- Article 87 (formerly Article 83): Governs overtime pay.
- Article 88 (formerly Article 84): Provides guidelines on undertime not offset by overtime.
- Article 93 (formerly Article 89): Specifically addresses premium pay for work on rest days and special days.
DOLE Handbook on Workers’ Statutory Monetary Benefits
- Provides simplified formulas and clarifications on how to compute premium pay (including rest day pay) and overtime pay under various scenarios.
Jurisprudence
- Philippine Supreme Court decisions clarifying special circumstances, including premium calculations and authorized wage deductions.

Whenever you refer to these laws and issuances, keep in mind that certain industries (e.g., retail, healthcare, BPOs) might have specific exceptions or alternative work arrangements approved by DOLE.

2. Concept of the Rest Day

Definition: A rest day is typically a continuous period of not less than 24 consecutive hours after six consecutive workdays (or in accordance with the employer’s operating requirements and the employee’s schedule).
Assignment of Rest Days: Employers determine the employees’ rest days, considering preference of the employee when possible. Most employees have one rest day in a week; others may have rotating rest days due to shift work.

Key Principle: An employee who is required or permitted to work on a rest day is entitled to a rest day premium—i.e., additional pay on top of the regular daily wage.

3. Rest Day Premium and Overtime Rates

3.1. Working on a Rest Day (Up to 8 Hours)

When an employee works on a rest day (no overtime involved), the law mandates an additional 30% on top of their basic daily rate for the first eight hours. In formula form:

[ \text{Pay for first 8 hours on rest day} = \text{Daily Rate} \times 130% ]

3.2. Overtime on a Rest Day (Beyond 8 Hours)

If the employee works more than eight hours on a rest day, the hours beyond eight are compensated with an overtime premium. The rule is:

On ordinary days, overtime is paid at 125% of the hourly rate.
On rest days, overtime is paid at 30% on top of the rest day rate (i.e., 130%).

Hence, the employee’s hourly overtime rate on a rest day becomes:

[ (\text{Daily Rate} \times 130%) \times 130% \text{ (for hours beyond 8)} ]

Or numerically:

[ \text{Daily Rate} \times 1.30 \times 1.30 = \text{Daily Rate} \times 1.69 ]

Applied on a per-hour basis for the hours beyond 8.

4. Impact of Absences on Calculating Rest Day Overtime Pay

4.1. Daily-Rated vs. Monthly-Paid Employees

Daily-Rated Employees
- Paid strictly for days actually worked (or otherwise paid if leaves with pay are available).
- If absent without pay, the basic wage for that day is simply forfeited.
- For a rest day (or rest day overtime) in the same payroll period, the calculation still uses the agreed daily rate—absences do not directly reduce that daily rate.
- However, a day’s absence results in fewer actual days’ pay, so the total pay in the payroll period will be lower.
Monthly-Paid Employees
- Typically have a fixed monthly salary covering all days in a month (depending on the company’s pay scheme: 304, 313, or 261 factor, etc.).
- If an employee takes an unpaid absence (i.e., no available leave credits), employers usually deduct an equivalent amount for that day from the monthly salary.
- The basis for computing overtime (hourly rate) usually remains (Monthly Rate ÷ 22 or 26 working days, or a factor mandated by company policy) ÷ 8 hours.
- Therefore, even if the employee had an absence earlier in the pay period, the hourly rate used for rest day overtime remains the same standard basis—unless the absence triggers a pro-rated decrease in monthly salary, in which case the computed daily/hourly rate is effectively the same but multiplied by fewer days for that month.

Key Takeaway:
Absences do not reduce the per-hour rate used for computing rest day overtime pay, so long as you still use the same “regular daily rate” or “regular hourly rate” as the baseline. However, the total pay that the employee receives at the end of the month may decrease due to deductions for the absence itself.

4.2. Undertime, Tardiness, and Offsetting

Undertime (working fewer hours in a given day) or tardiness is not offset by overtime under Article 88 of the Labor Code.
If an employee arrives late or leaves early on a given workday, it does not entitle them to “offset” those missed hours by working longer hours later in the week without incurring overtime pay if they exceed 8 hours in a day.
The effect on rest day overtime calculation is minimal unless the tardiness or undertime changes how the employee’s daily/hourly rate is computed (usually, it does not). The standard formula for overtime pay on rest day remains the same.

5. Step-by-Step Guide to Calculating Rest Day Overtime with Absences

Below is a general step-by-step procedure:

Determine the Employee’s “Regular Daily Rate.”
- For daily-paid employees, this is the agreed daily wage.
- For monthly-paid employees, use:
  [ \text{Daily Rate} = \frac{\text{Monthly Rate}}{\text{factor}} ]
  where “factor” could be 22, 26, 261, or 313, depending on the company’s policy and whether it uses a compressed workweek or includes rest days in the factor.
Identify Actual Hours Worked on the Rest Day.
- Determine how many hours the employee actually worked.
- First 8 hours on a rest day are paid at 130% of the daily rate (converted to an hourly equivalent for partial hours).
- Hours beyond 8 on a rest day are considered overtime and are paid at 130% of the rest day rate (so effectively 1.69× the basic hourly rate).
Check if the Employee was Absent During the Same Payroll Period.
- Deduct any unpaid absences separately from the employee’s pay if the employee has no leave credits available.
- The premium pay basis for working on a rest day remains the same unless the company policy states otherwise.
- In essence, the daily/hourly rate does not get “discounted” due to an absence; rather, you simply deduct the entire day (for daily-rated) or the pro-rated portion of the month’s salary (for monthly-paid) for each absence.
Compute Total Rest Day Pay and Summarize Deductions
- Compute rest day pay (including overtime, if any).
- Subtract any wage deductions due to absences.
- Total = (Regular pay + rest day pay + rest day overtime pay) − (Unpaid absences).

6. Illustrative Example

Scenario:

Monthly-paid employee with a monthly rate of PHP 20,000.
Company factor for daily rate is 26 working days.
The employee was absent for one day without leave credit during the payroll period.
That same week, the employee worked on Sunday (normally their rest day) for 10 hours.

6.1. Compute the Daily & Hourly Rate

[ \text{Daily Rate} = \frac{20,000}{26} \approx 769.23 \text{ PHP/day} ]

[ \text{Hourly Rate} = \frac{769.23}{8} \approx 96.15 \text{ PHP/hour} ]

6.2. Rest Day Pay for First 8 Hours

[ \text{Pay for 8 hours on rest day} = 8 \times (96.15 \times 1.30) = 8 \times 124.99 \approx 999.92 \text{ PHP} ]

(The factor 1.30 accounts for the 30% premium.)

6.3. Overtime Pay (2 Hours beyond 8)

[ \text{Pay for OT hours on rest day} = 2 \times \bigl( (96.15 \times 1.30) \times 1.30 \bigr) ]

First, the rest day hourly rate is 96.15 × 1.30 = 124.99.
Overtime rate on a rest day is another 30% on top of that 124.99:

[ 124.99 \times 1.30 \approx 162.49 ]

Hence for 2 OT hours:

[ 2 \times 162.49 = 324.98 \text{ PHP (approx.)} ]

6.4. Deduction for the 1 Absent Day

[ \text{Amount Deducted for the Absence} = 769.23 \text{ PHP} ]

6.5. Net Effect

Pay for rest day (including OT) = 999.92 + 324.98 = 1,324.90 PHP
Deduction for 1 day absence = 769.23 PHP

Therefore, for that payroll period, the total special pay (just for the rest day work) is 1,324.90, but the employer will also deduct 769.23 for the absence. The net impact on the employee’s pay (aside from regular workdays) is +555.67 over the base monthly rate’s normal coverage.

7. FAQs and Common Misunderstandings

Does an absence reduce the hourly rate for rest day or overtime calculations?
- Generally, no. The daily or hourly rate stays the same. The absence is handled via a salary deduction or “no pay” for that day if no leave credits are available.
Can an employer refuse to pay rest day overtime premium if the employee was absent earlier in the week?
- Under Philippine labor laws, the right to premium pay for work on rest days cannot be waived simply because of a prior absence. The employee is still entitled to the lawful premium for hours actually worked on the rest day.
What if the employee works on a rest day but has a half-day absence the day before?
- Similarly, the prior half-day absence does not affect the premium rate. The employee still gets 130% for rest day work (and an additional 30% for the overtime hours on that rest day).
Is it legal for an employer to “force” rest day work?
- The Labor Code generally requires that the employee’s rest day be observed. Employers can require work on a rest day only when the nature of the business or an emergency demands it. The employee should be properly compensated with the rest day premium.
What if a CBA or contract provides higher rates?
- Labor standards set the minimum. A collective bargaining agreement (CBA) or employment contract that grants a higher premium is valid and enforceable. Employers cannot go below the statutory rates set in the Labor Code and DOLE rules.

8. Practical Tips and Reminders

Monitor Attendance and Leaves
- Properly track absences (with pay or without pay) so that the final payroll reflects correct premiums and deductions.
Maintain Accurate Time Records
- Keep precise logs of the actual hours worked on rest days, especially if employees cross the 8-hour mark. Overtime can be computed only if time records are exact.
Review Company Policy
- Check if the company has a specific pay methodology (e.g., using 313 days for monthly rate breakdown). Understand your company’s “daily rate” or “hourly rate” basis.
CBA Provisions
- If you’re covered by a union, always confirm whether the CBA has different rules on rest day premiums or overtime.
Consult DOLE for Clarifications
- If there’s any confusion or dispute, DOLE regional offices provide advisory opinions and can mediate or clarify conflicting interpretations.

9. Conclusion

In the Philippines, rest day overtime pay is governed by clear statutory rules ensuring that employees who render work during their rest days receive an additional 30% premium for the first eight hours, plus 30% of that premium rate for overtime beyond eight hours. Absences do not diminish the per-hour or per-day rate used to compute these rest day premiums; rather, they typically result in a separate deduction or “no pay” for the day missed. Proper adherence to these rules helps avoid confusion, fosters fair treatment of employees, and maintains compliance with Philippine labor laws.

Disclaimer: The details above provide general information and are not a substitute for professional legal advice. For case-specific guidance, always seek assistance from DOLE, legal counsel, or a certified labor law practitioner.