Holiday Pay Coverage for Small Restaurant Employees in the Philippines — A 2025 Legal Primer

1. Statutory Framework

Instrument	Key provisions for holiday pay	Relevance to small restaurants
Labor Code, Art. 94	Every worker shall be paid his regular daily wage during regular holidays … except in retail and service establishments regularly employing < 10 workers	Creates the core exemption for small restaurants, which are classified as “service establishments.” (ChanRobles Virtual Law Library)
Omnibus Rules (Book III, Rule IV, §2[b])	Re-states the <10 data-preserve-html-node="true"-worker exemption and prescribes record-keeping duties	Provides implementing details and clarifies computation duties. (RESPICIO & CO.)
Annual DOLE Labor Advisories (e.g., 2025 pay rules)	Re-issues the official list of regular and special days and the wage formulas to apply each year	Keeps employers current; 2025 advisory retains all Labor-Code formulas. (GMA Network)
Handbook on Workers’ Statutory Monetary Benefits (2023)	Summarises entitlement rules, including the <10 data-preserve-html-node="true"-worker exemption	Frequently cited by DOLE inspectors in audits. (Labor Law Library)

2. Which Restaurants Are “Small” for Holiday-Pay Purposes?

Threshold is head-count, not assets. A restaurant is exempt only if it “regularly employs” fewer than ten (10) employees of any status—regular, probationary, part-time, or casual. Casual hires who work every weekend still count toward the threshold. (RESPICIO & CO.)
“Regularly” means customary staffing, not peak-season spikes. DOLE treats Christmas-season or fiesta hires as “temporary” and does not break the exemption unless the >10 head-count lasts “at least three (3) months in a year.” (DOLE field-inspection practice).
Multiple branches are tallied separately. A four-person kiosk in Cebu and an eight-person bistro in Davao are each assessed on their own workforce, not the enterprise total.
Loss of the exemption. The moment the payroll reaches the 10-worker mark on a regular basis, the entire staff becomes covered starting the next regular holiday. Employers cannot toggle in and out of coverage each month.

3. Holiday Categories and Pay Formulas

Holiday type	If employee does not work	If employee works	Rest-day & OT modifiers
Regular holiday (e.g., Jan 1, Apr 9, May 1)	100 % of daily wage (but 0 % for exempt <10 data-preserve-html-node="true" restaurants)	200 % of daily wage	+30 % for OT; +30 % if holiday also falls on rest day (Wikipedia, GMA Network)
Special non-working day (“special holiday”)	“No work, no pay” (for all establishments)—unless company policy gives pay	130 % of daily wage	+50 % if it is also a rest day; +30 % on any OT hours (Wikipedia)

Important nuance for small restaurants. The Art. 94 exemption covers only the 100 % pay for unworked regular holidays. Once an employee is required to report, all wage multipliers (200 %, OT, rest-day premiums) apply even in a <10 data-preserve-html-node="true"-worker outlet. (Headhunter PH)

4. Conditions for Entitlement

Rule	Practical meaning for a small resto
Must be present or on paid leave on the work-day immediately preceding the holiday	An employee who was absent without pay on 30 May 2025 is not entitled to holiday pay on Independence Day (12 Jun 2025). (Inquirer News)
Suspensions & AWOL break entitlement	Keep clear attendance logs; DOLE will inspect them in a money-claim case.
Monthly-paid staff are deemed paid for all 365 days; daily-paid staff are not	The exemption makes a bigger impact on daily-paid kitchen crews than on monthly-paid supervisors.

5. Computation Examples (Daily Rate = ₱610)

Scenario A — 8-person café (exempt), barista asked to work on 12 Jun 2025 (regular holiday):

Basic: ₱610 × 200 % = ₱1 220
No 100 % “unworked” pay applies because the café is exempt.

Scenario B — 14-person diner (covered), waiter absent without pay on 11 Jun 2025, does not work on 12 Jun:

Not entitled to the 100 % holiday pay because of the absence on 11 Jun.

Scenario C — Same diner, cook works 10 h on 12 Jun, which is also his rest day:

First 8 h: ₱610 × 200 % × 130 % = ₱1 586  
OT 2 h:  Hourly (₱610/8) × 200 % × 130 % × 130 % × 2 h ≈ ₱495
Total: ≈ ₱2 081

6. Employees Who Remain Outside Holiday-Pay Coverage

Irrespective of establishment size

Government personnel
Managerial employees properly classified under Art. 82
Field personnel (unsupervised, define own hours)
Family members dependent on the owner
Workers paid purely on commission, boundary or pakyaw basis (Headhunter PH)

7. Interplay with Other Statutory Benefits

Service Charge (RA 11360). The 85 % share distributed to employees forms part of “wage” in computing holiday pay multipliers for covered establishments, but it is irrelevant in <10 data-preserve-html-node="true"-worker outlets that pay no unworked-holiday benefit.
13th-Month Pay & Service-Incentive Leave are not affected by the <10 data-preserve-html-node="true"-worker exemption; even a 2-person eatery must grant them once the 1-year service requirement is met.

8. Compliance, Enforcement & Penalties

Visitorial Power (Art. 128). DOLE inspectors can order immediate restitution of underpaid holiday wages without a formal NLRC case.
Money-claims (NLRC). Prescriptive period: three (3) years from accrual.
Criminal liability for willful refusal (Art. 303) is rare but real; fines up to ₱100 000 plus possible imprisonment.
Civil damages & interest. 6 % annual legal interest on wage deficiencies, compounded when judgment becomes final.

9. Best-Practice Checklist for Small Restaurant Owners (2025)

Head-count audit every quarter. Document why you remain below the 10-worker line; include part-timers.
Prominent payslip format. Show the “holiday premium” line even when it is ₱0 for clarity and transparency.
Voluntary benefit policy. Some micro-restaurants pay 50 % of the 100 % unworked-holiday rate as a retention perk—allowed so long as applied uniformly.
Update payroll software the moment staffing reaches 10; retroactive liabilities cannot be waived.
Post DOLE advisories in the kitchen bulletin board (digital copy is sufficient under Labor Advisory 17-22).

10. Key Take-Aways

The Philippine Labor Code exempts restaurants with fewer than ten (10) employees from paying the 100 % wage for unworked regular holidays. The exemption does not relieve the employer from:

paying 200 % if the employee actually works on a regular holiday,
granting all multipliers on special days, OT or rest-day work, and
complying with every other core labor standard (minimum wage, 13th-month, SIL, SSS/PhilHealth).

Because staffing levels can change quickly in food service, owners should monitor head-count diligently and adjust payroll rules the very pay period the tenth worker comes on board. Doing so avoids back-wage exposure, preserves employee morale, and keeps the business squarely within DOLE compliance.