Below is a comprehensive discussion of the holiday pay rules in the Philippine private sector, focusing on the principle of “No Work, No Pay” on legal holidays, as grounded in existing labor laws and Department of Labor and Employment (DOLE) guidelines.

1. Governing Law and Basic Principles

1.1. Labor Code of the Philippines

Article 94 of the Labor Code (as renumbered) is the core legal provision that grants holiday pay to employees. It provides that every worker shall be paid the regular daily wage for any regular holiday, except when the employee is absent without leave on the day immediately preceding the holiday, subject to existing rules and regulations.

1.2. DOLE Rules and Regulations

The Omnibus Rules Implementing the Labor Code and various DOLE advisories clarify how holiday pay should be computed, what employees qualify for holiday pay, and the conditions affecting entitlement.

1.3. “No Work, No Pay” Principle

The general principle in the Philippines is “No Work, No Pay.” This means that compensation is given only for days actually worked or days deemed paid by law (such as regular holidays). This principle also applies to special non-working days, unless a company policy or collective bargaining agreement (CBA) provides otherwise.

2. Types of Holidays in the Philippines

2.1. Regular Holidays

Regular holidays are days that usually commemorate significant national events or religious observances. These are mandated by law (e.g., New Year’s Day, Araw ng Kagitingan, Maundy Thursday, Good Friday, Labor Day, Independence Day, National Heroes Day, Bonifacio Day, Christmas Day, Rizal Day, etc.).

Right to Holiday Pay, Even if Not Worked
Under the Labor Code, employees are generally entitled to receive 100% of their daily wage (i.e., the basic pay for an 8-hour workday) for any unworked regular holiday, provided they are present or on paid leave on the workday immediately preceding the holiday.
- Example: If a regular holiday falls on a Monday, and the employee worked or was on paid leave on the preceding Friday (assuming Saturday and Sunday are rest days), the employee should receive pay for that Monday even if they do not work.
If Work is Required on a Regular Holiday
The employee must be paid 200% of their daily wage for the first 8 hours. Any overtime work rendered beyond the first 8 hours warrants an additional premium on top of the 200% (normally 30% on the hourly rate for overtime on a regular holiday).

2.2. Special (Non-Working) Days

Special non-working days (sometimes called special holidays) are typically declared by law or by presidential proclamation for specific occasions—e.g., Chinese New Year, Black Saturday, Ninoy Aquino Day, All Saints’ Day, Feast of the Immaculate Conception, or additional days declared around Christmas or New Year’s.

No Work, No Pay
For special non-working days, the “No Work, No Pay” rule applies by default. This means that unless the employee actually reports for work, the employer is not required to pay the daily wage.
- However, many employers voluntarily grant pay on special non-working days (through company policy or a CBA). In such a case, the employer’s policy or agreement would prevail if it is more favorable to the employee.
If Work is Required on a Special Non-Working Day
The daily wage rate for the first 8 hours is generally 130% of the employee’s basic daily rate. Overtime on such a day would require an additional 30% on the hourly overtime rate.

2.3. Special Working Holidays

A relatively newer classification introduced through some proclamations is the “special working holiday.”

On a special working holiday, the principle is that work is not a paid holiday—meaning employees and employers treat it like an ordinary workday. There is no additional holiday premium unless company policy states otherwise.

3. Coverage and Exemptions

3.1. Covered Employees

As a rule, rank-and-file employees in the private sector who have an employer-employee relationship are covered by holiday pay rules.
Monthly-paid employees are typically presumed to be paid for regular holidays, as their monthly salary structure often factors in the holidays, but this can vary depending on the employer’s specific pay policy.

3.2. Exempt or Excluded Employees

Certain categories of employees are excluded from holiday pay under the Labor Code or its implementing rules. The most commonly cited exclusions include:

Government Employees (covered by Civil Service rules, not the Labor Code)
Managerial Employees (and some managerial staff)
Field Personnel (whose hours of work cannot be determined with reasonable certainty)
Domestic Workers (kasambahay) – they have their own law (Republic Act No. 10361, the Domestic Workers Act), which provides a different set of rules.
Workers Paid on a Purely Commission Basis – if their pay structure specifically does not include holiday pay.

Always check if a CBA, contract, or company policy grants these categories holiday benefits despite statutory exclusions.

4. The “No Work, No Pay” Rule on Legal Holidays

4.1. Regular Holidays vs. Special Non-Working Days

Regular Holidays
- Basic Principle: Employees should receive their daily basic pay on a regular holiday even if no work is performed, subject to compliance with certain conditions (e.g., being present on the last workday before the holiday).
- Because the Labor Code guarantees payment for unworked regular holidays, it functions as an exception to the “No Work, No Pay” principle.
Special (Non-Working) Holidays
- Basic Principle: “No Work, No Pay.” If the employee does not work, the employer generally has no obligation to pay.
- An employer may choose to provide payment even if there is no work, if that policy is written in the company handbook or a CBA.

4.2. Conditions to Receive Holiday Pay (Regular Holidays)

Must be present or on leave with pay on the workday immediately preceding the regular holiday.
If the employee is absent without leave on that day (i.e., AWOL), the employer is not obliged to pay holiday pay for that holiday.
If an employee is on authorized leave, such as sick leave or vacation leave with pay, they remain qualified for holiday pay.

4.3. “No Work, No Pay” in Practice

For a regular holiday, the primary concept of “no work, no pay” does not apply in the same way it does to special non-working days. Rather, the law modifies it by requiring that employees be paid if they meet the above condition (presence or paid leave before the holiday).
For a special non-working day, if the employee does not work, they receive no pay unless the employer voluntarily grants it or an agreement provides for payment.

5. Computation Examples

Below is a simplified demonstration of how holiday pay can be computed (daily rate of PHP 1,000 assumed for illustration).

Unworked Regular Holiday
- If the employee is present on the last workday prior to the holiday:
  Holiday Pay = PHP 1,000 (100% of daily rate)
Worked Regular Holiday (8 hours only)
- Pay = 200% of daily rate = 2 × 1,000 = PHP 2,000
Worked Regular Holiday (Overtime)
- First 8 hours = PHP 2,000 (200% of daily rate)
- Overtime pay per hour = 2,000 / 8 × 1.30 (additional 30% on an hourly basis)
- Multiply that overtime rate by the number of overtime hours.
Unworked Special Non-Working Day
- Pay = 0 (No Work, No Pay)
- Unless employer policy or CBA says otherwise.
Worked Special Non-Working Day (8 hours only)
- Pay = 130% of daily rate = 1.3 × PHP 1,000 = PHP 1,300

6. Company Policy, Collective Bargaining Agreements, and Better Benefits

Employers can offer more favorable terms than those mandated by law, but cannot offer terms less than the minimum labor standards.
Collective Bargaining Agreements (CBA) typically provide improved holiday pay rates or entitle employees to special conditions (e.g., more paid days off, or added pay for special non-working days).
Company Work Rules and Regulations may also voluntarily grant full pay on all holidays (both regular and special) regardless of actual work rendered, especially if such a practice aids employee morale and retention.

7. Common Misunderstandings

Assumption That All Holidays Are Paid Even If No Work Is Rendered
- This is only true for regular holidays, and only if the employee meets the conditions. Special non-working days remain subject to the “No Work, No Pay” principle.
Assuming AWOL Employees Must Still Be Paid on a Holiday
- If an employee is absent (AWOL) the day before the regular holiday, they generally lose entitlement.
Confusing Special Non-Working Day with a Regular Holiday
- Always verify whether the day in question is a regular holiday (with a statutory requirement of 100% pay if unworked) or a special non-working day (governed by “No Work, No Pay”).

8. Practical Guidance for Employers and Employees

Check Proclamations and DOLE Updates
- The Office of the President issues annual proclamations listing regular holidays, special non-working days, and special working holidays. Employers and employees should review these announcements each year.
Maintain Good Attendance Records
- For employees: Ensure you are present or on an approved leave of absence before a regular holiday to qualify for holiday pay.
- For employers: Proper documentation helps clarify disputes over absences and holiday pay entitlements.
Review Company Policies or CBAs
- These documents might grant more generous holiday pay benefits than the Labor Code’s bare minimum.
- Make sure you are aware of any unique conditions (e.g., partial holiday pay for part-time employees or prorated monthly pay systems).
Communicate Clearly
- Employers should issue memoranda before upcoming holidays to clarify pay rates or attendance requirements.
- Employees should seek clarification on how each holiday is classified (regular vs. special non-working vs. special working day).

9. Conclusion

In Philippine labor law, private sector holiday pay rules follow two main pillars: (1) Regular Holidays, for which the law guarantees pay even if no work is rendered (subject to conditions), and (2) Special Non-Working Days, where “No Work, No Pay” prevails unless a more favorable policy or agreement applies. These rules embody a balance between protecting workers’ right to rest on nationally significant days and recognizing the principle that wages are generally earned by rendering work.

Employers should keep track of holiday classifications and properly implement the statutory rates and conditions. Employees, on the other hand, should ensure attendance or proper leave documentation to avoid disqualification from holiday pay. By adhering to these guidelines—grounded in the Labor Code and DOLE regulations—both parties can maintain a fair and consistent approach to holiday pay in the private sector.