Annual Leave

The annual leave period in Philippines is from 1 January to 31 December.

Under the Philippine Labor Code, employees are entitled to a minimum of five days of Service Incentive Leave (SIL) annually after completing one year of service.

While the law mandates only five days of SIL, employers often voluntarily offer more days. However, if an employer provides at least five days of vacation or sick leave, they are not required to offer SIL by law.

There is no legislation on a maximum amount. If Client offers more than 5 days of leaves, employee must follow the terms and conditions of the Company policy. This should be documented via contract amendment.

Proration is done based on the employee’s start date till end of the year or with regards to resignation, till the last day of service within the year.

Employees can only start using SIL after 1 year of service (continuous or broken service from employee’s first day of employment)

Example An employee was hired on 1 January 2000 and resigned on 1 March 2001.

Assuming that they have not used or commuted any of they accrued SIL, they are entitled to the conversion of their accrued SIL, upon their resignation, as follows: SIL earned as of 31 December 2000 = 5.000 days Proportionate SIL for January and February 2001 (2/12) x 5 days = 0.833 day Total accrued SIL as of 1 March 2001 = 5.833 days

Under Philippine labor law, eligible employees are entitled to five (5) days of Service Incentive Leave (SIL) with pay after at least one year of service. Unused statutory SIL should be used during the applicable year or converted to its cash equivalent at year end. For Remote’s purposes, the statutory SIL portion should not be treated as ordinary carryover leave unless local counsel confirms a different treatment.

If the Client grants additional contractual leave on top of the statutory SIL, the Client may set its own rules for those extra days, such as carryover, forfeiture, or encashment, provided this is clearly documented in the employment agreement or internal policy and does not reduce the employee’s statutory SIL rights.

Yes, stated as follows:

Leave : X days per calendar year

No legislation on that. But employee should give reasonable notice to Company so they can adjust work plans accordingly.

Yes

Overtaken leaves taken will be converted into unpaid leaves

Employers can require employees to use their annual leave during specific periods, provided that it is done reasonably and with adequate notice. This practice helps businesses manage operational needs and ensures smooth functioning during planned shutdowns or low-demand periods.

If the mandatory 5 SIL days are not used (ie. the first 5 days of the leave entitlement), it is not mandatory to encash at the end of the year.

Mandatory encashment is only done upon termination.

Any encashment requested has to be approved by Client and inform Remote accordingly.

The computation is based on employee’s daily rate x PTO balance, wherein daily rate is from Monthly rate / 22 days.