Sometimes, employees leave the office minutes or hours early for various reasons without prior notice. Managing these situations depends from case to case, but repeated undertime can impact productivity—making proper tracking part of your responsibility as an employer.
In the Philippines, undertime is when employees work less than the full or minimum number of hours. They might leave work earlier than their scheduled shift allows or render less than their required work hours.
While it might seem minor compared to absences or tardiness, consistently overlooking undertime can disrupt operations and create employee tension.
Understanding how to compute undertime is crucial for maintaining fairness, enforcing company policies, and staying compliant with labor laws. This guide explains the basics of undertime computation, ensuring clarity and confidence for you and your employees.
What is Undertime in the Philippines?
Under Philippine labor law, undertime is when an employee works fewer hours than required in a workday. Unlike tardiness, which occurs when workers arrive past an agreed-upon time, undertime happens when they cut their shift short—intentionally or not.
Several scenarios can prompt this situation. They include personal emergencies, such as medical issues or family matters, and unplanned absences, like leaving work for urgent errands or unforeseen commitments. While these instances are sometimes unavoidable, they can disrupt operations if managed improperly.
It’s also essential to distinguish undertime from tardiness. Tardiness affects the start of an employee’s shift, often resulting in delays for projects or meetings. Meanwhile, undertime
reduces total work hours and leaves tasks unfinished. Both require clear tracking to ensure productivity and compliance with company policies.
Labor Law and Company Policies on Undertime in the Philippines
Having clear company-specific policies is essential for you and your employees to navigate the issue of undertime fairly and effectively, as misunderstandings and general confusion might arise without proper guidelines in place.
Article 88 of the Labor Code states, “Undertime work on any particular day shall not be offset by overtime work on any other day.” This statute ensures that you treat undertime separately because overtime rules and calculations are entirely different.
Beyond legal requirements, company-specific undertime policies can outline how to handle the situation. You may deduct undertime hours from paid leave balances or impose salary deductions. These policies provide transparency and set expectations on how undertime will impact wages and benefits.
Flexible work arrangements and undertime
With the rise of flexible work arrangements, undertime presents a unique challenge. While flexible setups provide employees with greater autonomy, they can blur the boundaries of work hours, making it harder to track undertime effectively.
According to Manila Recruitment Director of Client Services Arvin Ramos and Head of Client Services Lawrence Barrett, trust, communication, and clear expectations are the key.
“If there is trust and transparency in communication, and expectations are managed accordingly, then undertime issues can be minimized under flexible work arrangements,” says Ramos.
Barrett adds, “Flexible work arrangements can help address situations like unexpected family obligations, especially for employees with children. Options like flexible start times or work-from-home setups, when paired with results-based and accountability-driven environments, can serve as effective tools for managing expectations while maintaining work-life balance.”
Ultimately, while flexible work can reduce undertime issues in some cases, clear policies and structures remain essential to ensure accountability and fairness.
How to Compute Undertime in the Philippines
Here’s how to conduct an accurate undertime computation in the Philippines. The formula for undertime deductions is:
Rate per minute x Standard work day-Total hours worked
The most accurate way to calculate undertime is to get your employee’s rate per minute. If you start with a monthly salary, the breakdown is as follows:
Hourly rate=Monthly salary ÷Total working days in a month ÷Standard workday hours
Rate per minute=Hourly rate÷60
For example, if an employee earns PHP 20,000 per month, works 22 days a month, and follows an eight-hour workday:Hourly rate=PHP
20,000 ÷22 days ÷8 hours=PHP 113.64 per hour
Rate per minute=PHP 113.64 ÷60=PHP 1.89 per minute
If the employee worked 6 hours and 15 minutes instead of 8:
Undertime deduction=PHP 1.89 x 8-6.25 x 60=PHP 198.45
Subtract this figure from the employee’s daily rate to get the corresponding undertime pay. Note that while this formula generally reflects deductions based on actual time missed, your company may have specific rules on compensation, rounding, and calculations. Make sure to double-check!
Making Every Second Count
Undertime may seem like a small detail in the bigger picture of employee management, but its proper computation and handling reflect your commitment to fairness and transparency. Addressing undertime can bring about smoother operations and better employee satisfaction.
Similarly, managing talent and ensuring compliance go hand in hand. If you’re looking for top-tier professionals to help drive your business forward equitably, Manila Recruitment is your trusted offshore agency in the Philippines. We’ll help you build a thriving team, from finding exceptional candidates to creating a results-driven workplace.
Contact us today to find the best talent in the Philippines!
DISCLAIMER: The information in this webpage/blog/article/infographic we have published and the associated commentary are presented as general information and are not a substitute for obtaining legal advice in this area. Manila Recruitment does not accept liability for any action taken based on the information presented or for any loss suffered as a result of reliance on the information provided.
Passionate about promoting the ingenuity of Filipino talent, Arvin is a sought-after resource person in the field of career development. He regularly delivers keynote speeches and conducts workshops throughout the Philippines, sharing his insights and strategies for improving employability and promotability.
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