Overview

In Philippine labor law, holiday pay is a statutory wage benefit designed to ensure that eligible employees receive pay for certain declared holidays even if no work is performed. The tricky part is that holiday pay is closely tied to an employee’s pay status and the reason the employee did not work.

When an employee is under suspension, entitlement depends largely on whether the suspension is with pay or without pay, and whether the suspension is later ruled valid or invalid (which affects backwages).

This article explains the rules in a Philippine context, focusing on regular holidays, special non-working days, and how those interact with preventive suspension, disciplinary suspension, and other “no-work” statuses.

Key Legal Concepts You Need First

1) Types of Holidays (Philippine Setting)

A. Regular Holidays These are the holidays where the general rule is: eligible employees are paid 100% of their daily rate even if they do not work.

If the employee works, premium rates apply (commonly: 200% of daily rate for the first 8 hours, with additional rules for overtime/rest day combinations).

B. Special Non-Working Days These generally follow the principle: “no work, no pay”, unless:

the employer’s policy grants pay,
a CBA grants pay, or
a long-standing company practice has ripened into an enforceable benefit.

If work is performed, a premium rate usually applies (commonly: additional 30% of the daily rate for the first 8 hours, subject to variations when it falls on a rest day and other combinations).

C. Special Working Holidays These are treated more like ordinary working days unless a special rule or proclamation provides otherwise.

Suspension issues are most important for regular holidays because those are the ones with built-in pay even without work—but only if the employee is in a pay-eligible status.

2) What “Holiday Pay” Is (and Isn’t)

Holiday pay is not a bonus. It is legally treated as part of wages for covered employees. But it is also not unconditional: rules on eligibility and conditions for payment matter.

3) The “Day Immediately Preceding the Holiday” Rule (Critical)

For regular holidays, one of the classic conditions is that an employee who is on leave of absence without pay on the workday immediately preceding the regular holiday is generally not entitled to holiday pay—unless the employee actually works on the holiday or falls under an exception (e.g., certain paid leave situations).

A suspension without pay operates very similarly to an unpaid leave for pay-status purposes.

Suspension: What Kind Are We Talking About?

Suspension can mean different things in practice. In Philippine employment relations, the most common ones are:

A) Preventive Suspension

Imposed pending investigation when the employee’s continued presence poses a serious and imminent threat to life or property or to the employer’s business.
It is not meant to be a penalty; it’s a temporary measure.
It is typically without pay, but there are important limits: if the employer keeps the employee out beyond the allowable period, pay consequences can attach (often through reinstatement or wage payment depending on the situation).

B) Disciplinary Suspension (Penalty)

Imposed after due process (notice + opportunity to explain + decision).
Typically without pay as a disciplinary sanction.

C) “Floating Status” / Temporary Off-Detail / Bona Fide Suspension of Operations

Employee is not given work assignments for legitimate business reasons (common in security/service contracting and seasonal business).
The employment relationship continues, but the employee is often on a no-work-no-pay footing unless the arrangement or policy provides otherwise.

Core Rule: Holiday Pay During Suspension

1) If the Suspension Is Without Pay

General rule: An employee under unpaid suspension is not entitled to holiday pay for holidays that fall within the suspension period, because the employee is not in a pay-eligible status and is not “at work” nor “on paid leave.”

This applies most strongly to:

Disciplinary suspension without pay
Preventive suspension without pay
Floating status / no assignment situations that are treated as no-work-no-pay

Practical effect: If a regular holiday happens during the unpaid suspension, the employee usually receives ₱0 for that day (unless an exception applies—see below).

2) If the Suspension Is With Pay

If the employer places the employee on suspension with pay (by policy, contract, CBA, or management choice), then the employee remains in a paid status.

General rule: A paid suspension functions like a paid leave. For regular holidays, the employee is typically entitled to holiday pay because they are not absent without pay.

3) If the Suspension Is Later Found Invalid (Backwages Situation)

This is where many disputes arise.

If a suspension (or dismissal following it) is later declared illegal, employees may be awarded backwages for the relevant period. Backwages are intended to restore what the employee should have earned had the illegal act not happened.

General rule in effect: When backwages are awarded, they often include the wages and wage-related statutory benefits that the employee would have received during that period—this can include holiday pay for regular holidays that occurred during the covered time.

So:

Valid unpaid suspension → no holiday pay during the suspension
Invalid suspension / illegal dismissal with backwages → holiday pay may be included as part of what should have been paid

This is highly fact-dependent and tied to what period is covered by the backwages award.

Regular Holidays vs Special Days During Suspension

A) Regular Holiday During Unpaid Suspension

Usually not payable because the employee is not in pay status and is effectively absent without pay.

B) Special Non-Working Day During Unpaid Suspension

Most of the time, still not payable, and even more so because special non-working days are generally no work, no pay unless there’s a favorable policy/CBA/practice.

C) Employer Policy Can Be More Generous

Employers can always provide benefits more favorable than the legal minimum. If company policy, CBA, or established practice grants holiday pay even during suspension, that may be enforceable.

Monthly-Paid Employees: A Common Payroll Trap

Many employees are monthly-paid, and their salary is usually understood to already cover:

regular holidays, and often
rest days and special days, depending on the pay scheme.

But if a monthly-paid employee is placed on unpaid suspension, payroll typically prorates/deducts pay for the suspension days.

How the holiday fits in:

If the regular holiday falls within the unpaid suspension, the employer will generally treat it as part of the unpaid period and deduct/withhold pay for that day too.
If the employer does not deduct and pays it anyway, that’s typically a company grant (which could later be argued as practice if consistently done).

Best practice for employers: Make the deduction method transparent and consistent with your written policy to avoid claims of underpayment or “selective deduction.”

Exceptions and Edge Cases You Should Know

1) “Paid Leave” vs “Unpaid Suspension”

Holiday pay is generally preserved when an employee is on leave with pay (e.g., certain approved paid leaves), but not when they are on leave without pay.

Unpaid suspension is typically treated like a no-pay status.

2) If the Employee Works on the Holiday (Rare During Suspension)

If an employee is truly suspended, they generally should not be working. But if, in practice, the employee is allowed or required to work on a holiday, that can undermine the notion of “suspension,” and wage entitlements (including holiday premiums) can attach.

3) CBA / Company Practice

Holiday pay during suspension may be claimed if:

the CBA explicitly grants it, or
a long, consistent, deliberate employer practice has effectively become a company benefit.

4) Preventive Suspension Beyond Allowable Limits

Preventive suspension is not meant to be indefinite. If an employer improperly extends it beyond what is allowed without following the required consequences (often reinstatement or wage payment depending on the circumstance), wage liability risks increase—and disputes about holiday pay may follow as part of broader wage claims.

Illustrative Examples

Example 1: Disciplinary Suspension Without Pay (Regular Holiday Occurs)

Daily rate: ₱800
Suspension: April 6–10
Regular holiday: April 9

Result (typical rule): No pay for April 9 because the employee is under unpaid suspension during that date.

Example 2: Preventive Suspension With Pay (Regular Holiday Occurs)

Daily rate: ₱800
Preventive suspension with pay: April 6–10
Regular holiday: April 9

Result: Holiday pay is payable (employee remains in pay status).

Example 3: Unpaid Suspension Later Declared Invalid, With Backwages

Employee suspended without pay for 30 days
Two regular holidays fell within the period
Labor ruling orders backwages for the period covered

Result: Holiday pay for those regular holidays is commonly treated as part of what should have been earned, and may be included in the backwages computation.

Practical Guidance

For Employees

Identify the holiday type: regular holiday vs special non-working day.
Check the suspension notice: is it expressly with pay or without pay?
Check your CBA / handbook: some employers grant pay even during suspensions.
If you believe the suspension is illegal or improperly extended, keep records—holiday pay claims often ride with broader claims for backwages.

For Employers / HR

Put in writing whether a suspension is with pay or without pay.
Apply a consistent payroll rule for holidays falling within unpaid suspensions.
Be careful with preventive suspension: ensure it is justified and not extended improperly.
If you pay holidays during suspension as a discretionary act, label it clearly to manage “practice” risk—while recognizing that repeated, consistent grants can become enforceable over time.

Frequently Asked Questions

“Am I still an employee during suspension?”

Usually yes—the employment relationship typically continues. But continuing employment does not automatically mean continuing wage entitlement for days placed in no-pay status.

“If I’m suspended without pay, do I still get paid on a regular holiday?”

Usually no, if the holiday falls within the unpaid suspension period, because you are not in pay status.

“What if the holiday is a special non-working day?”

Even more likely no, because special non-working days are commonly no work, no pay unless there’s a favorable policy/CBA/practice.

“If the company paid me holiday pay during my suspension before, can I demand it again?”

Possibly—if it was contractual, CBA-based, or a consistent company practice. One-off payments are harder to enforce, but repeated, consistent payments can become arguable as practice.

“If the suspension is later ruled illegal, do holidays get paid retroactively?”

Often yes as part of backwages, depending on the scope of the backwages award and the findings of the labor authority/court.

Bottom Line

Unpaid suspension generally means no holiday pay for holidays that occur during the suspension—especially for regular holidays, and even more so for special non-working days.
Paid suspension generally preserves entitlement to regular holiday pay.
If the suspension is later found invalid and backwages are awarded, holiday pay may be included in what must be paid for the covered period.
Employer policies, CBAs, and consistent company practices can provide more generous treatment than the minimum rules.

If you want, share a concrete scenario (holiday type, dates of suspension, whether monthly- or daily-paid, and whether the suspension was preventive or disciplinary), and I’ll map the likely outcomes and computations under the rules above.