Service Incentive Leave

WHO HAS THE RIGHT TO SERVICE INCENTIVE LEAVE?

Every covered employee who has rendered at least one (1) year of service is entitled to a yearly service incentive leave of five (5) days with pay.

The term “at least one year of service” should mean service within twelve (12) months, whether continuous or broken, reckoned from the date the employee started working, including authorized absences and paid regular holidays, unless the number of working days in the establishment as a matter of practice or policy, or that provided in the employment contract, is less than twelve (12) months, in which case, said period should be considered as one (1) year for the purpose of determining entitlement to the service incentive leave benefit.

WHO ARE EXCLUDED FROM THE LAW ON SERVICE INCENTIVE LEAVE?

All employees are covered by the rule on service incentive leave except:

[1] Those of the government and any of its political subdivisions, including government-owned and controlled corporations;
[2] Domestic workers or kasambahays;
[3] Persons in the personal service of another;
[4] Managerial employees as defined in Book III of the Labor Code;
[5] Field personnel and other employees whose performance is unsupervised by the employer;
[6] Those who are engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount for performing work irrespective of the time consumed in the performance thereof;
[7] Those who are already enjoying the benefit provided in the law;
[8] Those enjoying vacation leave with pay of at least five (5) days;
[9] Those employed in establishments regularly employing less than ten (10) employees;
[10] Other officers and members of the managerial staff; and
[11] Members of the family of the employer who are dependent on him for support.
IS IT CONVERTIBLE TO CASH?

The service incentive leave is commutable to its money equivalent if not used or exhausted at the end of the year. The phrase “leave with pay” means that the employee is entitled to his full compensation during his leave of absence from work.

In computing the service incentive leave benefit, the basis is the salary rate at the date of commutation. The availment and commutation of the service incentive leave benefit may be on a pro-rata basis.

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