Here’s a complete, plain-English legal explainer on holiday pay eligibility when work is suspended in the Philippines—covering regular holidays vs. special days, daily-paid vs. monthly-paid, temporary shutdowns (calamity, business closure, strike/lockout, “floating” status), preventive suspension, and what happens if some employees still work. (General info, not legal advice.)
1) Quick refresher: what holiday pay normally requires
Regular holiday (e.g., Jan 1, Jun 12):
Unworked: Daily-paid employees are entitled to 100% of the basic daily wage if they were present or on leave with pay on the workday immediately preceding the holiday.
- Exception: retail/service establishments with ≤10 workers are exempt from paying unworked regular holiday pay.
Worked (first 8 hours): 200% of the basic daily wage; if it’s also the employee’s rest day, 260%. Overtime/night work premiums stack on top.
Special (non-working) day: Different, lower rules; this article focuses on regular holidays (because that’s where “suspension” questions bite most).
Monthly-paid employees: Their monthly rate typically already covers regular holidays (even unworked), subject to company policy/CBA; they still get premium when they work on the holiday.
2) What does “work suspension” mean—and why it matters
“Work suspension” can arise from:
- Temporary business closure / shutdown (lack of work, repairs, seasonal lull);
- Calamity/force majeure (typhoon, flood, earthquake, power failure);
- Government restrictions or work-stoppage orders;
- Authorized temporary lay-off (“floating status”) under the Labor Code (good-faith suspension of employment not exceeding 6 months);
- Strike/lockout;
- Preventive suspension pending investigation (individual disciplinary); or
- Work-day suspension (“no classes/work”) declared by LGU/agencies due to weather.
These typically place daily-paid workers on a no work, no pay footing unless a law, CBA, or company policy says otherwise. That stance interacts with holiday pay eligibility.
3) Decision guide: Is an unworked regular holiday payable during suspension?
Use this ladder for daily-paid employees:
Was the employee required/allowed to work on the holiday?
- Yes → Pay worked-holiday rates (2.00× or 2.60× if rest day), even if operations were otherwise suspended.
- No → Go to #2.
Is the employer a retail/service establishment with ≤10 workers?
- Yes → Unworked regular holiday not due (statutory exemption).
- No → Go to #3.
Was the employee “present or on leave with pay” on the workday immediately preceding the holiday?
- Yes → Pay 100% (unworked regular holiday).
- No → Go to #4.
Why not present?
Employee absence without pay (AWOL, unpaid leave, suspension without pay, strike participation) → Not entitled to unworked holiday pay.
Employer-caused non-workday (e.g., temporary shutdown, authorized floating, calamity closure, or LGU suspension that converted the prior scheduled workday into a no-work day for which the employee received no pay) → As a rule, not entitled to unworked holiday pay (no work, no pay), unless:
- a CBA/company policy grants it,
- the employee was on leave with pay (e.g., VL/SL approved and paid), or
- the employee is monthly-paid (holiday covered by monthly rate).
Key practical point: The statute’s “present or on leave with pay on the workday immediately preceding” condition looks to the last scheduled workday before the holiday. If management or government suspended work and no wages were due for that day, daily-paid employees generally don’t qualify for the unworked regular holiday—unless a more generous policy applies. If the employee had a pre-approved paid leave on that last workday, the condition is met.
4) How specific suspension scenarios affect holiday pay
A) Temporary business closure / authorized “floating” (≤6 months)
- Daily-paid: No wages during suspension; unworked regular holiday that falls within the suspension is not payable (unless CBA/policy says otherwise). If work is required on the holiday for skeletal tasks, pay worked-holiday premiums.
- Monthly-paid: Monthly rate continues only if employment is not suspended; if placed on bona fide suspension of employment (no work, no pay status), the monthly pay and unworked holiday pay can be withheld for the suspension period, per lawful arrangement.
B) Calamity/force majeure; LGU work suspension
- If the day before the holiday was suspended without pay, daily-paid workers usually don’t meet the eligibility condition → no unworked regular holiday pay.
- If they worked on the holiday for emergency/skeletal ops → pay worked-holiday premiums.
C) Strike/lockout
- Strike (employee-initiated stoppage): period is no work, no pay; unworked holiday during a strike is not payable. If strikers actually worked on the holiday by agreement, pay applicable worked rates.
- Lockout (employer-initiated stoppage): also no work, no pay, but exposure to backwages can arise if the lockout is later ruled illegal; holiday pay can be addressed in the monetary award depending on rulings.
D) Preventive suspension (individual)
- The employee is on suspension without pay pending investigation; an unworked regular holiday during this period is not payable. If the employee is later exonerated and preventive suspension is declared improper/excessive, backwages/benefits (including holiday pay) may be adjusted per decision.
E) Company-declared leave with pay (forced leave but paid)
- If management puts employees on a paid leave day immediately before the holiday, the “leave with pay” condition is met → unworked regular holiday is payable.
F) WFH / alternative work arrangements
- If the employee rendered paid work (WFH) on the workday immediately preceding the holiday, eligibility for unworked holiday pay is preserved.
5) What if operations resume right before the holiday?
- If the preceding workday becomes a paid workday (resumption), then daily-paid employees who are present (or on paid leave) that day regain eligibility → unworked regular holiday pay due.
- If resumption is after the holiday, the shutdown still covers the prior workday → no unworked holiday pay for daily-paid.
6) Worked-holiday pay still applies during suspension
Even when operations are suspended, if an employee is required/allowed to work on the regular holiday:
- Pay 2.00× the daily wage for the first 8 hours (or 2.60× if it is also their rest day).
- Overtime (beyond 8 hours) = 1.30× of the day’s rate per hour (so 2.60× base → 3.38× OT hourly; rest-day/holiday stacks accordingly).
- Night-shift differential = 10% of the applicable hourly rate for that day.
7) Daily-paid vs. monthly-paid: recap during suspensions
| Pay scheme | During bona fide suspension (no work) | Unworked regular holiday that falls within the suspension |
|---|---|---|
| Daily-paid | No work, no pay | Not payable, unless CBA/policy grants it or the day-before condition is met via paid leave |
| Monthly-paid (active employment) | Monthly rate continues (includes regular holidays) | Covered by monthly pay; worked holiday still gets premium |
| Monthly-paid (employment suspended) | Pay may be stopped per lawful suspension | Treated like daily-paid during suspension (no work, no pay) |
Always check your CBA/company policy: many employers voluntarily pay unworked regular holidays during short closures or calamities.
8) Edge cases & FAQs
Q1: The day before the holiday was declared an LGU “no work” day. Are daily-paid employees entitled to the unworked holiday pay? A: Generally no (no work, no pay)—they were not present or on leave with pay on the immediately preceding workday. If they were on paid leave, the condition is met.
Q2: Payroll closed for a week, but a guard/maintenance staff worked on the regular holiday. A: Pay them worked-holiday rates as normal.
Q3: Employee was sick on paid SL the day before the holiday during a shutdown. A: If SL is paid, the “leave with pay” condition is met → unworked regular holiday is payable.
Q4: The shop has 8 workers (retail/service) and is closed the whole week including the holiday. A: The shop falls under the ≤10 workers exemption → no unworked regular holiday pay due to daily-paid staff; worked hours on the holiday still attract premium.
Q5: Employee is on maternity leave crossing a regular holiday. A: Paid leave status; the holiday pay is subsumed in maternity benefits/monthly pay—no separate holiday premium unless she works (which typically she should not during maternity leave).
Q6: The “preceding workday” was a rest day in the schedule. A: The requirement looks to the workday immediately preceding. If the chronological day before was a rest day, look to the last scheduled workday before the holiday. Presence/paid-leave on that workday satisfies the condition.
Q7: Preventive suspension ended two days before the holiday; employee returned to paid work on the day immediately preceding. A: The condition is met → unworked regular holiday payable.
9) Compliance checklist for employers
- Announce suspensions in writing (dates, scope, pay treatment).
- Clarify whether the day before a holiday is a paid leave, unpaid suspension, or workday.
- If anyone works on the holiday, pay the correct premium (2.00× / 2.60× + OT/NSD as applicable).
- Document attendance/paid-leave on the preceding workday for eligibility audits.
- CBA/policy: decide if you’ll extend unworked holiday pay during brief closures/calamities; state it clearly to avoid disputes.
10) Practical examples (₱800 daily wage; ₱100 hourly)
Scenario A – Calamity shutdown Fri; Holiday Sat (regular holiday).
- Fri became no-work, no-pay. Employee did not work Sat. → ₱0 (unworked RH not due).
- If employee worked 8 hrs Sat: 2.00× = ₱1,600 (or ₱2,080 if Sat is also a rest day).
Scenario B – Forced paid leave Fri; Holiday Sat (unworked).
- Paid leave Fri satisfies condition → ₱800 holiday pay.
Scenario C – Floating status all month; guard worked 10 hrs on RH.
- Pay worked RH: 8 hrs = ₱1,600; OT rate = 2.60× Hr = ₱260/hr; 2 OT hrs = ₱520; Total ₱2,120 (if rest day too, use 2.60× base and 3.38× OT).
Scenario D – Preventive suspension covers Mon–Wed; Holiday Thu; employee worked Wed.
- Present on preceding workday (Wed) → ₱800 unworked RH payable if employee doesn’t work Thu. If employee works Thu: apply worked rates.
Bottom line
For daily-paid workers, unworked regular holiday pay hinges on being present or on leave with pay on the workday immediately preceding the holiday. When operations are suspended without pay (shutdown, calamity, strike, floating status, preventive suspension), that condition is usually not met—so unworked holiday pay is not due unless a CBA or policy grants it. If an employee works on the holiday—even amid suspension—worked-holiday premiums still apply. Monthly-paid employees are typically covered by their monthly rate unless their employment itself is lawfully suspended. Clear written notices and precise timekeeping are your best tools to get holiday pay right during suspensions.