Press Release
January 26, 2019

Villanueva seeks to increase service incentive leave pay of private employees

Senator Joel Villanueva has appealed to his colleagues to immediately pass a measure seeking to increase the service incentive leave of employees from five days to 10.

Villanueva, chairman of the Senate Committee on Labor, Employment and Human Resources, said studies have already shown that taking leaves increases the productivity of workers while it costs very little to employers.

The senator had submitted to the floor for plenary debate last month Senate Bill No. 1614, under Committee Report No. 441, or "An Act increasing the Service Incentive Leave Pay of Employees."

Under the measure, every employee who has rendered at least one year of service shall be entitled to an annual service incentive leave of 10 days.

Presently, Labor Code of the Philippines (Article 95 of Presidential Decree No. 442) mandates that every employee is entitled to a yearly service incentive leave of five days with pay.

The bill seeks to add additional 5 days but the additional days shall not be commutable or no cash equivalent.

Moreover, the provision shall not apply to those who are already enjoying such benefit, those enjoying a vacation leave of at least 10 days with pay, and those in establishments regularly employing less than 10 people.

Villanueva said that the increase of mandatory paid service incentive leave of employees "will benefit the economy, as it benefits both employees and employers."

"Recent studies have shown that taking leaves increases the productivity of workers, improves employee morale, fosters stronger employee retention and gives significant health benefits," Villanueva said.

"Some research also suggests that the cost of paid leaves to employers is very little, in terms of temporary employee replacement costs or overtime paid to existing employees and has few, if any, costs - and potentially gains - in terms of employee morale and productivity," he said.

"Employees with healthy work-life balance can better focus on their job because they will have less personal problems as they can spend more time to attend to their personal and family matters. It will affect their positive outlook in life and positive attitude at work," the senator added.

The said measure is still pending at the Senate, which was approved on second reading. The House of Representatives approved its version of the bill in August of last year.

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