Nov 25, 2020

DOLE tells employees to convert to cash unused service incentive leaves

Based on the Labor Code of the Philippines, employees who have rendered services for 12 months are entitled to five days service incentive leaves that can be monetized at the end of the year if not used.

Unused service incentive leaves by employees who have already spent a full year in service can be converted to cash or be credited to their accounts in the following year, a labor and employment official in Palawan reminded business owners Thursday.

Department of Labor and Employment (DOLE) Palawan chief labor and employment officer Luigi Evangelista said that based on the Labor Code of the Philippines, employees who have rendered services for 12 months are entitled to five days service incentive leaves that can be monetized at the end of the year if not used.

“Ang sabi ng service incentive article ay all unused service incentive leaves shall be convertible into cash at the end of the year. Ang service incentive leave kasi ay five days ‘yon subalit, kung ang ginagawa ni employer ay hindi niya mino-monetize pero nag-a-accumulate siya the following year, okay lang ‘yon. Basta hindi dapat nawawala,” Evangelista said.

Evangelista said that if the employer fails to monetize the unutilized incentive leave of an employee, this must be credited to the employee’s account the following year.

According to Article 95 of Labor Code of the Philippines, the provision shall not apply only to those “enjoying vacation leave with pay at least five days and those employed in establishments regularly employing less than 10 employees or in establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment.”

“Kasi mas papabor ‘yon sa worker kapag i-mo-monetize mo na kapag naipon, parang sa government nag-iipon ng leave. Kapag mataas na ‘yong rate mo, doon ka pa lang magmo-monetize,” he said.

“Pero kapag si establishment ay hindi niya ginagawa ‘yong accumulation, dapat at the end of the year babayaran ‘yong unused. Sa private ‘yan, five days service incentive leave,” Evangelista added.

Employers who will fail to monetize the unused service incentive leaves will face violations, he warned.

“Basta ang sinasabi ng labor code ay five days incentive leave. Kung beyond that ang leave benefits niyo, basta ‘yong five days ay na-i-enjoy niyo. Minsan tatlo lang nagamit mo, dapat may dalawa ka pa natitira na kailangan i-monetize. Mandatory ‘yon,” he said.

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