Understanding holiday pay can be a bit of a maze, especially for daily-paid employees. In the Philippines, the rules are governed primarily by the Labor Code and its Implementing Rules and Regulations (IRR), supplemented by annual Proclamations from the President.
Here is everything you need to know about holiday pay entitlement for daily-paid workers.
1. The Core Rule: "No Work, With Pay"
For Regular Holidays, the general rule for a daily-paid employee is that they are entitled to their daily wage even if they do not work, provided they were present (or on leave with pay) on the workday immediately preceding the holiday.
2. Regular Holidays vs. Special Non-Working Days
The law distinguishes between these two types of holidays, and the pay structures differ significantly.
| Type of Holiday | If Unworked | If Worked |
|---|---|---|
| Regular Holiday | Paid 100% of daily wage | Paid 200% of daily wage |
| Special Non-Working Day | No pay (unless company policy says otherwise) | Paid 130% of daily wage |
3. The "Workday Before" Rule
To be entitled to pay on a Regular Holiday while not working, a daily-paid employee must:
- Work on the last workday prior to the holiday; or
- Be on a paid leave of absence on that day.
Note: If the employee is on leave without pay on the day before the holiday, they are generally not entitled to holiday pay if they do not report for work on the holiday itself.
4. Successive Regular Holidays
In cases like Maundy Thursday and Good Friday (two successive regular holidays), the rule is:
- If you work or are on paid leave the day before the first holiday, you get paid for both.
- If you are absent without pay on the day before the first holiday, you aren't entitled to pay for the first holiday. However, if you work on the first holiday, you are entitled to pay for the second.
5. Overtime and Rest Days
If the holiday coincides with the employee's scheduled rest day or involves overtime, the rates increase:
- Regular Holiday + Rest Day: of the daily rate.
- Special Holiday + Rest Day: of the daily rate.
- Overtime on Regular Holiday: An additional 30% of the hourly rate for that holiday.
6. Who is Excluded?
Not all employees are entitled to holiday pay under Book IV, Title I of the Labor Code. Exclusions include:
- Government employees (governed by Civil Service rules).
- Managerial employees and officers.
- Retail and service establishments regularly employing less than 10 workers.
- Domestic helpers (Kasambahays) and persons in the personal service of another.
- Field personnel and those paid on a purely commission basis.
7. Monthly-Paid vs. Daily-Paid
While the focus here is daily-paid, it is a common misconception that monthly-paid employees "don't get holiday pay." In reality, the monthly salary of "monthly-paid" employees is legally presumed to already include payment for all holidays and rest days for the year.
Summary Checklist for Employers
- Identify the Holiday: Check if it is "Regular" or "Special" via the latest Presidential Proclamation.
- Check Attendance: Did the employee work the day before?
- Calculate the Premium: Apply the 200% or 130% multiplier where applicable.
Would you like me to create a sample calculation table based on a specific daily minimum wage rate?