Here’s a practice-oriented legal explainer on Holiday Pay Eligibility for Employees Absent Before a Regular Holiday (Philippine context)—what the rule actually says, who’s covered, the common edge-cases, and how employers should implement it without running afoul of DOLE inspections or wage claims.

1) The core rule (Regular Holidays)

For regular holidays (e.g., New Year’s Day, Araw ng Kagitingan, Independence Day, Bonifacio Day, Christmas Day, etc.):

If unworked: A daily-paid employee is entitled to 100% of the basic daily wage provided the employee was present or on leave of absence with pay on the workday immediately preceding the holiday.
If worked: First 8 hours are paid at 200% of the basic daily wage (higher if the day also falls on the employee’s scheduled rest day, plus overtime premiums if applicable).

Presence test:

“Present or on leave with pay on the workday immediately preceding the holiday.” If the employee was absent without pay on that immediately preceding workday, the employee does not get the unworked regular holiday pay (unless there’s a more favorable company policy/CBA).

2) Coverage and common exemptions

Holiday pay rules under the Labor Code and its Implementing Rules generally cover rank-and-file and non-managerial employees, whether probationary or regular, except:

Government employees (civil service rules apply).
Retail and service establishments that regularly employ fewer than ten (10) workers (statutory exemption).
Managerial employees and members of the managerial staff.
Field personnel and those whose work hours cannot be determined with reasonable certainty, including some task/contract/commission-basis workers, when by the nature of their pay and schedule, holidays are not separately compensable.
Domestic helpers and those in the personal service of another.

Monthly-paid employees (whose monthly rate is expressly computed to cover all days of the month, including regular holidays) are ordinarily already paid for unworked regular holidays. The “presence test” typically does not disqualify them from holiday pay—though the employer may deduct absences under its attendance and payroll policy consistent with law and agreements.

3) “Immediately preceding workday” — how to apply it

The test looks to the employee’s actual work schedule and the establishment’s operating calendar.

If the day before the holiday is a scheduled rest day (e.g., holiday Monday; rest day Sunday): look to the last workday before the rest day (Saturday for a Mon–Sat shop). If the employee worked Saturday or was on paid leave Saturday, the employee qualifies for the unworked holiday pay on Monday.
If the establishment was closed (no work for everyone) on the day before the holiday (e.g., plant-wide shutdown), employees are not penalized; use the last day the employee was required to work immediately before the closure.
If the employee was on leave with pay the day before the holiday (e.g., approved VL/SL with pay), the employee qualifies.
If the leave was without pay (LWOP) the day before, the employee does not qualify (for the unworked holiday), unless a more favorable CBA/company policy says otherwise.

4) Successive regular holidays (e.g., Maundy Thursday & Good Friday)

If the employee was present or on paid leave on the workday immediately preceding the first holiday (e.g., Wednesday), the employee is entitled to unworked holiday pay for both Thursday and Friday.
If the employee was absent without pay on that immediately preceding workday (Wednesday), the employee is not entitled to the unworked holiday pay for either day.
If the employee works on either holiday, pay the worked-holiday rate for that day regardless of the absence rule (because the entitlement then rests on actual work performed).

5) Daily-paid vs. Monthly-paid: what actually changes

Daily-paid (no work, no pay): Must clear the presence test to receive unworked regular holiday pay.
Monthly-paid (monthly rate covers all days): Already includes regular holiday pay. Absences may affect attendance-based deductions or leave credits, but the holiday itself is ordinarily paid unless there’s a lawful, clearly stated policy to the contrary (and not less favorable than the law).

6) Typical edge-cases & how to resolve them

A. New hire started after the “preceding workday.” No entitlement to unworked holiday pay because the employee was not yet employed on the qualifying day. If the employee works on the holiday, pay worked-holiday rates.

B. Employee resigned effective the day before the holiday. Employment has ended; no entitlement to unworked holiday pay for the holiday that occurs after separation. (If the holiday fell before effectivity of separation and presence test is met, pay it.)

C. Suspension/No-pay status on the preceding workday. A no-pay status on the qualifying day generally disqualifies for the unworked holiday. If the employee works on the holiday, pay the worked-holiday premium.

D. Tardiness or undertime on the preceding workday. Does not defeat eligibility so long as the day counts as worked or paid leave under company policy. If the undertime converts the day to LWOP, disqualification follows.

E. Flexible/rotating shifts. Identify the employee’s assigned workday immediately preceding the holiday (could be a night shift crossing midnight). If that tour is worked or paid, the employee qualifies.

F. On probation. Probationary rank-and-file are covered just like regulars.

G. CBA or long-standing practice. A more favorable CBA or company practice (e.g., “pay unworked regular holidays regardless of presence”) controls. You cannot roll back a benefit already granted by practice without valid bargaining/notice and without violating non-diminution.

7) Payroll computation quick reference (regular holidays)

Unworked (eligible daily-paid):

100% × basic daily wage

Worked (not a rest day):

200% × basic daily wage for first 8 hours

OT at 260% (200% × 1.3) beyond 8 hours

Worked and falling on scheduled rest day:

260% × basic daily wage for first 8 hours

OT at 338% (260% × 1.3) beyond 8 hours

(Exact multipliers must follow the latest DOLE rules/CBA; use your payroll factors consistently.)

8) Compliance checklist for employers

Publish the calendar of regular holidays and state the presence test plainly.
Define “workday immediately preceding” for each shift pattern in your policy (especially for night shifts and rotating crews).
Code leave correctly (paid vs. LWOP) in HRIS; wrong coding is the #1 cause of disputes.
Respect more favorable CBAs/practices; document any special concessions.
Keep proof of attendance/leave approvals; DOLE inspectors ask for these during payroll audits.
Train payroll on successive-holiday handling and rest-day overlaps.

9) Employee-side quick guide

If you’re daily-paid and will miss the day before a regular holiday, try to convert the absence to a paid leave (if you have credits) to keep eligibility.
If your rest day falls immediately before the holiday, eligibility is based on your last actual workday before that rest day.
Worked-holiday pay is due whether or not you met the presence test.
Check your CBA/company rules—they may be more generous.

10) Disputes & remedies

Grievance/CBA route first (if unionized).
HR/payroll escalation with time records and leave approvals attached.
DOLE Single-Entry Approach (SEnA) for quick conciliation.
Money claim before a Labor Arbiter (NLRC) if unresolved—holiday pay differentials are wage claims; legal interest may apply on delayed amounts.

11) Bottom line

For regular holidays, unworked pay to daily-paid employees hinges on a simple presence rule: be present or on paid leave on the workday immediately before the holiday.
Monthly-paid employees are typically covered by their monthly rate already.
Worked-holiday premiums are due regardless of the presence test.
When in doubt, follow the more favorable rule in your CBA/company policy, and document everything.

This is general information for the Philippine setting and not legal advice. For unusual setups (compressed workweeks, seasonal layoffs, “no work, no pay” establishments with hybrid monthly rates), have counsel align your payroll rules with DOLE standards and any CBA commitments.