Makati City Rep. Luis Campos, Jr. wants to free the night shift differential pay from taxes, so that employees may fully enjoy the additional compensation that they earn for work performed from 10:00 p.m. to 6:00 a.m.
Campos has filed House Bill No. 10534, which seeks to exclude the night shift differential pay from the computation of the gross taxable income of employees.
“Our bill seeks to further augment the take home pay of workers and help them cope with the soaring cost of living,” the lawmaker said in a statement on Sunday.
“This will also give more meaning to the mandates of the Constitution for the state to provide full protection to labor, promote the welfare of workers, and to assure them a rising standard of living,” Campos added.
Under the Labor Code, employers are legally required to provide extra remuneration to their workers for labor rendered anytime between 10:00 p.m. to 6:00 a.m.
Called the “night shift differential,” the additional pay is equivalent to 10 percent of the employee’s hourly pay, and is given for every hour worked.
At present, the night shift premium pay is still subject to income taxes, especially in the case of employees already receiving more than P250,000 in gross compensation per annum.
Once enacted, Campos’ measure would benefit a multitude of Filipinos performing labor during the so-called graveyard or third shift, including the 1.7 million workers employed by the business process outsourcing (BPO) sector.
Campos is the husband of Makati Mayor Abigail Binay. Makati is home to the country’s largest BPO firms whose employees provide round-the-clock business support to global corporations.
The proposal would also benefit workers in other establishments that are running 24 hours a day—from hospitals and convenience stores to fast-food chains and exporters rushing to meet production quotas.
The bill seeks to amend the National Internal Revenue Code by adding the night shift differential pay to the list of items excluded from taxable income.
