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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year.
Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave (SIL) of five days with pay.
Unused service incentive leaves (SIL) are required to be converted to cash at the end of the year or upon the termination of employment due to just causes or separation from service due to authorized services.
The law says:
“SECTION 5. Treatment of benefit. — The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year.” (Section 5, Rule V, Book III, Omnibus Rules Implementing the Labor Code)
The 2022 Handbook on Workers’ Statutory Monetary Benefits provides that SIL may be used for sick and vacation leave purposes. The unused SIL is commutable to its money equivalent at the end of the year.
In computing, the basis shall be the salary rate at the date of the conversion. The use and conversion of this benefit may be on a pro rata basis.
For example:
An employee was hired on January 01, 2020 and resigned on March 01, 2021. Assuming that he/she has not used or commuted any of his/her accrued SIL, upon his/her resignation, as follows:
|
SIL earned as of December 31, 2020 |
5.000 days |
|
Proportionate SIL for January and February 2021 (2/12) x 5 days
|
0.833 days |
|
Total accrued SIL as of March 01, 2021: |
5.833 days |
Related article: Service Incentive Leave
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