Handbook on Workers' Statutory Monetary Benefits (2024)

Service Incentive Leave: Definition

Service incentive leave (SIL) refers to the paid leave of five days granted to an employee who has rendered at least one year of service that may be used for sick, vacation, and other leave purposes.

Service Incentive Leave: Coverage

This benefit applies to every employee who has rendered at least one year of service, except the following: 1. Government employees, whether employed by the National Government or any of its political subdivisions, including those employed in government-owned and/or controlled corporations with original charters or created under special laws; 2. Persons in the personal service of another; 3. Managerial employees, if they meet all of the following conditions: 3.1 Their primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof; 3.2 They customarily and regularly direct the work of two or more employees therein; and 3.3 They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to hiring, firing, and promotion, or any other change of status of other employees are given particular weight. 4. Officers or members of a managerial staff, if they perform the following duties and responsibilities: 4.1 Primarily perform work directly related to management policies of their employer; 4.2 Customarily and regularly exercise discretion and independent judgment; 4.3 (a) Regularly and directly assist a proprietor or managerial employee in the management of the establishment or subdivision thereof in which he or she is employed; or (b) execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision, special assignments and tasks; and 4.4 Do not devote more than 20% of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs 4.1, 4.2, and 4.3 above; 5. Field personnel and those whose time and performance is unsupervised by the employer; 6. Those already enjoying this benefit; 7. Those enjoying vacation leave with pay of at least five days; and 8. Those employed in establishments regularly employing less than ten employees.

Service Incentive Leave: Meaning of “one year of service”

The phrase “one year of service” of the employee means service within 12 months, whether continuous or broken, reckoned from the date the employee started working. The period includes authorized absences, unworked weekly rest days, and paid regular holidays. If through individual or collective agreement, company practice, or policy, the period of the working days is less than 12 months, said period shall be considered as one year for the purpose of determining the entitlement to the service incentive leave.

Service Incentive Leave: Conversion

The employee may choose to either use his/her leave credit or commute it to its monetary equivalent if not exhausted at the end of the year. If the employee does not use or commute his/her SIL, he/she is entitled upon his/her resignation or separation from work to the commutation of the same. The basis of the computation shall be the salary rate at the date of the commutation. The use and conversion of this benefit may be on a pro rata basis. To illustrate, Employee A has not used or commuted any of his SIL since he was hired on 01 January 2023 and resigned on 01 March 2024. Assuming at the date of the commutation, the daily salary rate of Employee A is ₱610.00. In this case, his SIL shall be computed as follows: SIL earned as of 31 December 2023 5.000 days Proportionate SIL for January and February 2024 0.833 days (2/12 x 5 days) Total accrued SIL as of 01 March 2024 5.833 days Monetary equivalent of the SIL ₱3,558.13 (daily salary rate x remaining accrued SIL) Sec. 3, Rule V of the Omnibus Rules Implementing the Labor Code of the Philippines. Auto Bus Transport System, Inc. v. Bautista, 497 Phil. 863 (2005). DOLE Legal Service Opinion.