Holiday Pay

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  • P.D. 442 is the legal basis for holiday pay.
  • Holiday pay is a 100% additional pay during a regular holiday.
  • If no work is done on a holiday, the employee receives his daily wage.
  • If there is work done, he receives his holiday pay plus his day’s wage.
  • If there is work done on a double holiday, he receives two holiday pays plus his day’s wage.
  • There are 12 regular holidays.
  • There are rules on absences without pay immediately preceding a regular holiday pay.
  • Piece-rate workers are entitled to holiday pay.
  • Seasonal employees are not entitled to holiday pay during off-season.
  • Workers without regular workdays are entitled to holiday pay.

Legal basis

The legal basis is Presidential Decree No. 442 (“P.D. 442”), otherwise known as the “Labor Code of the Philippines”.

Concept

Holiday pay is an additional pay of 100% of the basic wage of a covered employee on a regular holiday even if that employee does not work.

If the covered employee renders work on a regular holiday, he/she receives his holiday pay (100% of basic wage) plus his day’s wage.

If the covered employee renders work on a double holiday, he/she receives his two holiday pays (200% of basic wage) plus his day’s wage.

The day’s wage is subject to his actual hours of work rendered on that day. If he/she only renders work for six (6) hours, then he/she is entitled only to pay for the equivalent of the time worked.

Covered and excluded

The benefit applies to all employees except:

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. Those of retail and service establishments regularly employing not more than five (5) workers;

3. Kasambahay and persons in the personal service of another;

4. Managerial employees, if they meet all of the following conditions:

4.1. Their primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof;

4.2. They customarily and regularly direct the work of two or more employees therein; and

4.3. 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.

5. Officers or members of a managerial staff, if they perform the following duties and responsibilities:

5.1. Primarily perform work directly related to management policies of their employer;

5.2. Customarily and regularly exercise discretion and independent judgment

5.3. (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

5.4. Do not devote more than twenty percent (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 5.1, 5.2, and 5.3 above;

6. Field personnel and other employees whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

Employees who are not excluded are referred to as “covered employees”.

Regular holidays

There are currently 12 regular holidays in the Philippines, namely:

January 1 – New Year’s Day

Movable date – Maundy Thursday

Movable date – Good Friday

April 9 – araw ng Kagitingan

May 1 – Labor Day

June 12 – Independence Day

Last Monday of August – National Heroes’ Day

Movable date – Eid’l Fitr

Movable date – Eid’l Adha

November 30 – Bonifacio Day

December 25 – Christmas Day

December 30 – Rizal Day

Double Holiday

A double holiday happens when there are two holidays in one day. For example, since Maundy Thursday is movable, there are occasions when it falls on Araw ng Kagitingan resulting in a double holiday on the same day.

Computation

These are the steps on how to compute for holiday pay.

1. If there is no work on a regular holiday, a covered employee is entitled to a holiday pay of 100% daily wage.

100% holiday pay + day’s wage = day’s wage with holiday day

Example:

Php1,000.00 + 0 = Php1,000.00

2. If there is work performed on a regular holiday, a covered employee is entitled to a holiday pay of 100% daily wage plus his wage for that day. (If the covered employee is compensable for his entire day’s work, he is entitled to 100% of his day’s wage. If he is tardy or late, then he is entitled to his corresponding pay for the day.)

100% holiday pay + day’s wage = day’s wage with holiday day

Example:

Php1,000.00 + Php1,000.00 = Php2,000.00

3. If there is work performed on a double holiday, a covered employee is entitled to a holiday pay of 200% daily wage plus his wage for that day.

200% holiday pay + 1 day’s wage = day’s wage with holiday day

Example:

Php2,000.00 + Php1,000.00 = Php3,000.00

Rules on absences

If an absent employee is paid the workday immediately preceding a regular holiday, then he/she is entitled to holiday pay.

Conversely, if an absent employee is not paid the workday immediately preceding a regular holiday, he/she is not entitled to holiday pay.

An absent employee is paid if he applied his leave credits for the day’s absence and the same was approved by the management. If there is no applied leave credit, an absent employee is not paid.

Absence during successive regular holidays

The same rule on absences apply for successive regular holidays or two/more holidays lining up after another (e.g. Maundy Thursday and Good Friday).

If an absent employee is paid the workday immediately preceding a regular holiday, then he/she is entitled to holiday pay for the regular holidays.

Conversely, if an absent employee is not paid the workday immediately preceding a regular holiday, he/she is not entitled to holiday pay for the successive regular holidays.

However, if an absent employee is not paid the workday immediately preceding a regular holiday, but performs work on the first regular holiday, then he/she is entitled to the holiday pay for the next holiday/s without having to work. The rules on absences will apply for the next successive holidays after the first regular holiday when he worked.

Work suspension or temporary/periodic shutdown

The employer is required to pay the holiday and observe the rules on holiday pay for days/period when there is work suspension or temporary/periodic shutdown.

Piece-rate workers

They are entitled to holiday pay which shall not be less than his/her average daily earnings for the last seven (7) actual days of work immediately preceding the regular holiday. The holiday pay should not be less than the applicable statutory minimum wage rate.

Seasonal workers

They are not entitled to holiday pay for regular holidays during off-season.

Workers without regular workdays

They are entitled to holiday pay. Workers without regular holidays include stevedores.

Employment contract, company policies, CBA

The above discussion may be superseded by any stipulation favorable to the employee via an employment contract, company policies, collective bargaining agreement, or analogous thereto.

References

  • Presidential Decree No. 442, a.k.a. Labor Code
  • DOLE Omnibus Rules Implementing the Labor Code
  • DOLE-BWC Handbook on Workers’ Statutory Monetary Benefits
  • Jurisprudence or Supreme Court Decisions