Holiday Pay Entitlement When an Employee Is Absent on a Regular Holiday
(Philippine Labor-Law Primer, updated to June 17 2025)
1. Statutory Foundations
| Instrument | Key Provision | Practical Effect |
|---|---|---|
| Article 94, Labor Code | “Every worker shall be paid his regular daily wage during regular holidays, except in retail/service establishments regularly employing <10 data-preserve-html-node="true" workers.” | Establishes the basic right and the retail-10 exemption. |
| Rule IV, Book III, Omnibus Rules Implementing the Labor Code | Requires presence (or approved leave with pay) on the work-day immediately preceding the regular holiday. | Sets the “preceding-day present” condition. |
| Department Order (DO) 210-20 & DOLE Handbook on Workers’ Statutory Monetary Benefits (2023 ed.) | Clarify computation, exemptions, and illustrative matrices. | Codify the 100 % / 200 % / 260 % formula and reiterated rules on absence. |
2. Who Is (and Isn’t) Covered?
Covered employees
- Monthly-paid, daily-paid, piece-rate, “pakyaw,” or task-based workers unless specifically excluded.
Exclusions
- Government employees (Civil Service rules apply).
- Managerial employees “primarily managing” and meeting the four tests for exemption are still entitled—holiday pay is not one of the Labor Code’s “exemptible” benefits.
- Retail/service establishments employing fewer than 10 workers: completely exempt unless the company has voluntarily adopted the benefit (estoppel).
- Field personnel and workers paid purely on commission or trip-rate are covered only if a company policy/CBA grants it; otherwise “no-work, no-pay” governs.
3. The “Preceding-Work-Day Present” Rule
| Scenario | Holiday Pay? |
|---|---|
| Present or on paid leave on the work-day immediately before the holiday | Yes (100 % of daily wage even if holiday is unworked). |
| Absent and leave is unpaid on the day immediately before the holiday | No, except when: • Employer has a more favorable practice/CBA; or • Worker actually works on the holiday (see Section 4). |
| Successive regular holidays (e.g., Maundy Thu + Good Fri): absent on the work-day before the first | Not entitled to both, unless employee works on either holiday (then that day becomes the “preceding day” for the next). |
| Absence due to mandatory quarantine or suspension by employer (not employee fault) | Generally entitled; the absence is deemed excused or on “leave with pay.” |
| Temporary cease of operations (“floating status”) | No work = no pay; if shutdown includes the holiday, holiday pay is not due, unless employer’s policy/CBA says otherwise. |
Key point: the rule looks only one working day back (not forward). Working after the holiday cannot retroactively cure the absence.
4. If the Employee Works on the Holiday after Being Absent
Even when the employee was absent on the qualifying day, working on the holiday reopens entitlement, but only for that day:
| Worked Hours | Pay Multiplier |
|---|---|
| First 8 hrs | 200 % of basic daily wage |
| Overtime >8 hrs | 260 % (200 % × 1.30 OT premium) |
| Night Shift Diff. (10 p.m.–6 a.m.) | Add 10 % of hourly rate on top of 200 %/260 % |
Example
Daily-paid welder paid ₱700/day is absent Wed (unpaid). Thursday is a regular holiday but he is called in:
₱700 × 200 % = ₱1 400 for the first 8 hrs; plus overtime/night-shift differentials if any.
5. Interaction with “No-Work, No-Pay” Principle
Daily-paid workers earn only on days actually worked—but Article 94 overrides no-work-no-pay on regular holidays provided the qualifying-day rule is met. (Special non-working days/“special holidays” remain strictly no-work-no-pay unless worked.)
6. Effect of Approved Leaves
| Leave Type on Pre-Holiday Day | Treated as “Present”? |
|---|---|
| Vacation/Sick Leave with pay | Yes |
| SIL (Service Incentive Leave) converted to cash, then absent | No—because it is unpaid leave once commuted. |
| Maternity, Paternity, Solo Parent Leave | Yes, because statutorily with pay. |
| Emergency leave granted by employer with pay | Yes, by practice. |
7. Regular Holiday vs. Rest Day
If a regular holiday coincides with the worker’s scheduled rest day:
| Condition | Pay Entitlement |
|---|---|
| Did not work | 100 % of daily wage (holiday pay) but no rest-day premium. |
| Worked | 260 % of daily wage (200 % × 1.30 rest-day premium). |
8. Retail/Service Establishments (<10 data-preserve-html-node="true" Workers)
They may voluntarily pay. Once paid regularly and deliberately, it becomes a company practice that cannot be unilaterally withdrawn (Art. 100, non-diminution).
9. Jurisprudence Highlights
| Case | G.R. No. | Ratio |
|---|---|---|
| Macleod & Co. vs. Eustaquio (SC 1941, still cited) | L-1741 | First declared holiday pay a statutory obligation. |
| Intercontinental Broadcasting Corp. vs. IBC Employees Union (G.R. 144530, 15 Jan 2004) | Employer cannot stop paying holiday benefits it had consistently granted, despite retail-10 exemption. | |
| St. Luke’s Medical Center vs. Notario (G.R. 195909, 7 Aug 2017) | Private hospital’s policy granting holiday pay despite absences became vested right. |
10. Computing Holiday Pay for Monthly-Paid Employees
Monthly wage already covers un-worked regular holidays. Formula (per DOLE Handbook):
Equivalent Daily Rate (EDR) =
Monthly Salary / (Total Working Days in Year – Regular Holidays)Thus no additional pay is due if un-worked; add 100 % of EDR if the employee works.
11. Documentation & Employer Compliance
- Attendance records: Essential to prove absence/presence.
- Payroll register: Should reflect separate holiday pay line-item.
- Policy/CBA: Spell out whether company waives the qualifying-day rule or grants extra pay.
- DOLE inspection: Non-payment is a monetary claim actionable within three years (Art. 306).
12. Best-Practice Checklist for Employers
- □ Remind workforce of qualifying-day rule before long weekends.
- □ Require supervisors to certify reasons for pre-holiday absences.
- □ Automate payroll multipliers to avoid manual error.
- □ For ≤10-worker establishments: decide once and document whether to grant the benefit; consistency avoids estoppel issues.
- □ Update policy annually in light of DOLE Labor Advisories (the President may declare additional regular holidays).
Key Take-Away
Absence on the work-day immediately prior to a regular holiday generally disentitles a Philippine employee to statutory holiday pay—unless the absence is paid, excused, or the employee actually works on the holiday itself, or a more favorable company practice/CBA applies. Employers that nonetheless pay the benefit make it a vested right going forward.
Armed with this matrix, HR managers and employees alike can navigate holiday pay questions with confidence—and avoid costly labor claims.