Holiday Pay under Philippine Labor Law
Holiday pay refers to the additional compensation granted to employees for work performed during holidays as mandated by the Labor Code of the Philippines, its Implementing Rules and Regulations (IRR), and subsequent laws such as R.A. No. 6727, R.A. No. 9504, R.A. No. 9178, R.A. No. 9492, R.A. No. 9849, and R.A. No. 10966. Below is a detailed discussion of the relevant provisions:
I. Legal Basis
Labor Code of the Philippines (Presidential Decree No. 442)
- Article 94 mandates the payment of holiday pay to covered employees for regular holidays even if no work is performed.
R.A. No. 9492
- Rationalized the observance of holidays by instituting the concept of holiday economics—adjusting the dates of certain holidays to the nearest Monday, except religious holidays, to promote productivity and economic growth.
R.A. No. 9849
- Declared Eid'l Adha and Eid'l Fitr as regular holidays in the Philippines.
R.A. No. 10966
- Declared December 8 (Feast of the Immaculate Conception of the Blessed Virgin Mary) as a regular holiday.
II. Definition and Components of Holiday Pay
Holiday pay is the entitlement of employees to their daily basic wage even on days when they are not required to work due to the declaration of a holiday.
Covered Employees
- Employees entitled to holiday pay include:
- Those in the private sector who are not managerial employees.
- Employees who worked or were on paid leave the day before the holiday.
- Employees entitled to holiday pay include:
Exemptions
- Certain groups of workers are not entitled to holiday pay, including:
- Government employees.
- Managerial employees and officers.
- Kasambahay (domestic helpers) and persons in the personal service of another.
- Employees of retail and service establishments with less than ten (10) workers.
- Certain groups of workers are not entitled to holiday pay, including:
III. Components and Computation
Regular Holidays
- Covered employees are entitled to 100% of their daily basic wage even if they do not work. If they work, they are entitled to 200% of their daily basic wage.
- Example: Daily wage = ₱1,000
- If not worked: ₱1,000
- If worked: ₱2,000
- Example: Daily wage = ₱1,000
- Covered employees are entitled to 100% of their daily basic wage even if they do not work. If they work, they are entitled to 200% of their daily basic wage.
Special (Non-Working) Holidays
- Payment is no work, no pay, unless there is a favorable company policy or collective bargaining agreement (CBA).
- If worked, the employee receives 130% of their daily basic wage.
Overtime Pay
- Work performed beyond eight (8) hours on a holiday merits an additional 30% of the hourly rate.
Double Holidays
- If two holidays fall on the same day, the employee is entitled to 300% of their daily basic wage if worked and 200% if not worked.
IV. Rules for Holiday Pay under Specific Laws
Executive Order No. 203
- Declared national holidays and prescribed rules for the observance of holiday pay.
Implementing Rules and Regulations (IRR)
- The IRR of the Labor Code provides detailed guidelines on computation, coverage, and exclusions for holiday pay.
R.A. No. 6727 (Wage Rationalization Act)
- Ensures that holiday pay adheres to the prescribed minimum wage rates.
R.A. No. 9178 (Barangay Micro Business Enterprises Act of 2002)
- Exempts registered Barangay Micro Business Enterprises (BMBEs) from holiday pay obligations to encourage small business growth.
V. Notable Judicial Interpretations
Non-diminution of Benefits
- Employers cannot reduce or withdraw existing holiday pay benefits once granted unless authorized by law or agreement.
Holiday Pay for Probationary Employees
- Probationary employees are entitled to holiday pay if they meet the eligibility requirements.
Holiday Pay and Rest Days
- When a holiday coincides with an employee's rest day, the employee is entitled to an additional 30% of their daily wage if worked.
VI. List of Regular and Special Holidays (Under R.A. No. 9492, R.A. No. 9849, and R.A. No. 10966)
Regular Holidays
- New Year’s Day (January 1)
- Maundy Thursday
- Good Friday
- Araw ng Kagitingan (April 9)
- Labor Day (May 1)
- Independence Day (June 12)
- National Heroes Day (last Monday of August)
- Bonifacio Day (November 30)
- Christmas Day (December 25)
- Rizal Day (December 30)
- Eid’l Fitr (movable date)
- Eid’l Adha (movable date)
- Feast of the Immaculate Conception (December 8)
Special (Non-Working) Holidays
- Chinese New Year (movable date)
- EDSA People Power Anniversary (February 25)
- Black Saturday (movable date)
- Ninoy Aquino Day (August 21)
- All Saints’ Day (November 1)
- All Souls’ Day (November 2)
- Christmas Eve (December 24)
- New Year’s Eve (December 31)
VII. Practical Notes for Employers and Employees
Records Keeping
- Employers must maintain records of holidays, employee attendance, and corresponding holiday pay.
Dispute Resolution
- Employees may file complaints for non-payment of holiday pay with the Department of Labor and Employment (DOLE).
Holiday Substitution
- Employers and employees may agree to substitute a holiday with another day, provided such agreement is documented and consensual.
This comprehensive outline provides all the critical information regarding holiday pay under Philippine labor laws. For specific situations or disputes, legal counsel or DOLE assistance is advised.