Purpose and policy on overtime
- The Circular is issued to prescribe and update rules and regulations on the payment of authorized overtime services of government personnel.
- Overtime work must be avoided by adequate planning of work activities.
- Overtime work must not be resorted to in the performance of regular routine work and activities.
- Overtime work is allowed only when unforeseen events and emergency situations result in any of the following:
- causing financial loss to the government or its instrumentalities;
- embarrassing the government due to inability to meet commitments; or
- negating the purposes for which the work or activity was conceived.
Coverage: who is covered
- The Circular covers incumbents of positions of chief of division and below under permanent, temporary or casual status and contractual personnel whose employment is in the nature of a regular employee.
- The Circular covers incumbents of positions of chief of division and below who are designated to a position in the Career Executive Service (CES).
Exemptions: who is not covered
- The following government personnel are not covered by the Circular:
- Department Secretaries;
- Department Undersecretaries;
- Department Assistant Secretaries;
- Bureau Directors and Regional Directors;
- Assistant Bureau Directors and Assistant Regional Directors;
- Department Service Chiefs and Assistant Department Service Chiefs;
- positions of equivalent category as those above-mentioned in State Universities and Colleges (SUCs), Local Government Units (LGUs), and Government-owned and/or -Controlled Corporations (GOCCs) and Government Financial Institutions (GFIs);
- incumbents of intermediate positions allowed and created in-between the enumerated positions in the existing organizational structure/staffing pattern of government agencies, SUCs, LGUs, GOCCs, and GFIs;
- elective officials; and
- other appointive officials whose equivalent rank is higher than a chief of division.
Overtime services included
- Overtime services include those rendered beyond eight (8) work hours of a regular work day.
- Overtime services include those rendered on rest days, such as Saturdays and Sundays.
- Overtime services include those rendered on Holidays or non-working days.
Computation: hourly rate and pay
- Overtime pay is by the hour and is based on actual rate.
- The Circular defines the actual hourly rate (H.R.) as computed from the employee’s Actual Salary Per Month using the formula H.R. = Actual Salary Per Month / (22 x 8).
- For ordinary working days, overtime pay adds 25% of the hourly rate, using Overtime Pay = 1.25 x H.R. x No. of Hours Rendered.
- For rest days and holidays, overtime pay adds 50% of the hourly rate, using Overtime Pay = 1.50 x H.R. x No. of Hours Rendered.
- The total overtime pay for an employee for the year must not exceed fifty percent (50%) of the employee’s annual basic salary.
- Overtime pay for contractual personnel must be based on the rate exclusive of the 20% premium.
Conditions and required compliance
- Authority to render overtime services is subject to Civil Service Commission (CSC) rules, particularly Rule XVII (Government Office Hours).
- Meal allowance as a form of payment of overtime services is no longer allowed.
Funding of overtime pay
- Agencies are authorized to pay overtime services out of:
- amounts specifically appropriated in the agency budget for overtime pay; or
- savings from released allotments for current operating expenditures subject to limitations that:
- all authorized mandatory expenses must have been paid first; and
- total overtime payments in a given calendar year must not exceed five percent (5%) of the total salaries of authorized positions of the agency.
- Agencies may use savings from released allotments for current operating expenditures for overtime pay without need for prior authority from the Department of Budget and Management, provided the conditions under Section 8.1.2 are fully satisfied.
- For government-owned and/or-controlled corporations, including government financial institutions, local government units, and project personnel, funding must be sourced from their respective corporate, local, and project funds.
Resolution of issues and gaps
- Issues and conflicts arising from implementation of the Circular must be submitted to the DBM for resolution.
- Cases not covered by the Circular’s provisions must be submitted to the DBM for resolution.
Repeal and modification; effect
- Inconsistent provisions of existing circulars, guidelines, and other issuances are rescinded/repealed and/or modified accordingly.
- The Circular takes effect on April 1, 1996.