1) Scope and Key Definitions

A. Governing framework

Holiday pay entitlements in the Philippines are governed primarily by:

the Labor Code (holiday pay provisions, premium pay principles),
implementing rules and long-standing Department of Labor and Employment (DOLE) policy issuances,
and wage orders/practices insofar as they do not diminish statutory minima.

This article focuses on the situation where an employee’s scheduled rest day (usually Sunday or another fixed day off) coincides with a regular holiday.

B. Important terms

Regular holiday: a holiday that, as a rule, is paid even if unworked, subject to eligibility rules (e.g., New Year’s Day, Araw ng Kagitingan, etc.).
Rest day: the employee’s weekly day of rest required by law, typically after six consecutive workdays, but may be fixed by company policy or schedule.
Holiday pay: pay for a regular holiday, including pay for unworked holiday where eligible.
Premium pay: additional compensation for work performed on rest days, holidays, or special days, computed as a percentage over the employee’s daily rate.

2) General Rule: Regular Holiday Pay Applies Even If the Holiday Falls on a Rest Day

A. “Holiday on rest day” is still a regular holiday

When a regular holiday falls on an employee’s rest day, the day does not lose its character as a regular holiday. The employee’s entitlement depends on whether the employee:

did not work, or
worked on that day.

B. If the employee does not work on the holiday/rest day

Baseline rule: the employee is entitled to 100% of the daily wage as holiday pay, provided the employee is eligible for holiday pay.

In practical terms: the employee is treated as paid for that day as a regular holiday, even though it is also the employee’s rest day.

3) If the Employee Works on a Regular Holiday That Falls on the Rest Day

A. Premium pay structure

Work performed on a day that is both:

a regular holiday, and
the employee’s rest day entitles the employee to a higher premium than ordinary holiday work or ordinary rest day work alone.

B. Common minimum computation (conceptual)

The pay is generally expressed as a percentage of the employee’s daily rate:

Regular holiday worked (not a rest day): daily rate plus a premium.
Rest day worked (not a holiday): daily rate plus a premium.
Regular holiday that is also a rest day worked: daily rate plus a higher combined premium.

In payroll practice, this “combined” situation produces a computation that is higher than either condition alone.

C. Overtime on top of holiday/rest day work

If the employee works in excess of 8 hours on that day, the employee is entitled to overtime premium computed on top of the applicable holiday/rest day rate (not merely on the basic daily rate).

4) Eligibility Rules: When Holiday Pay May Be Withheld

Holiday pay is not always automatic for every individual. Key eligibility considerations include:

A. Absence on the workday immediately preceding the holiday

A common rule is that if an employee is absent without pay on the workday immediately preceding a regular holiday, the employee may lose entitlement to holiday pay for that holiday, subject to important exceptions (e.g., the employee was on:

approved leave with pay,
authorized absence,
or other circumstances recognized as not breaking eligibility).

B. Holiday pay for employees who are not required to work on the holiday

For eligible employees, holiday pay is due even if unworked.

C. Monthly-paid vs daily-paid employees

Monthly-paid employees are generally considered paid for all days in the month, including regular holidays, under standard payroll structuring—meaning holiday pay is typically already integrated into their monthly salary.
Daily-paid employees typically receive holiday pay as a distinct entitlement or as part of daily wage computation rules.

The key legal principle is non-diminution: the method of payment should not reduce what the law guarantees.

5) Special Situations That Commonly Cause Confusion

A. “No work, no pay” policies

“No work, no pay” generally does not apply to regular holidays for employees who are eligible for holiday pay. A company policy cannot override statutory holiday pay.

B. Piece-rate, task-based, commission-based employees

Entitlement can depend on whether the worker is paid by results and how the pay system is structured, but statutory holiday pay rules may still apply if the employment relationship and coverage indicate entitlement.

C. Part-time employees

Holiday pay coverage can depend on whether the worker is part of the covered employee classes and whether they meet eligibility rules. Computation often becomes proportional depending on how the daily rate is established.

D. Employees excluded from holiday pay coverage

Certain categories (commonly those in retail/service establishments employing a small number of workers, managerial employees, or those excluded by implementing rules) may have different treatment. Coverage must be evaluated carefully.

6) Interaction With “Holiday Offsetting” and Company Scheduling

A. Employer cannot generally substitute another day to avoid holiday pay

An employer generally cannot avoid the obligation to pay holiday pay simply by declaring the holiday as the employee’s rest day or by shifting schedules in a way that effectively defeats holiday pay.

B. Rotating rest days and compressed workweeks

Where rest days rotate or compressed workweek schedules exist, identifying whether the holiday coincided with a rest day requires examining:

the posted work schedule,
the CWW agreement (if any),
payroll classification of the day, and
actual attendance records.

7) Computation Framework (Practical Payroll Guide)

To compute properly, identify:

Employee’s daily rate (or daily equivalent).
Whether the day is a regular holiday.
Whether it is also the employee’s rest day under the schedule.
Whether the employee:
- did not work,
- worked up to 8 hours, or
- worked beyond 8 hours.
Whether the employee is eligible for holiday pay (especially the preceding-day rule).

Then apply:

holiday pay rules if unworked and eligible, or
the combined premium if worked on holiday + rest day,
plus overtime premium if applicable.

8) Enforcement, Claims, and Evidence

A. Common evidence needed

Work schedule showing rest days
Attendance logs or time records
Payslips/payroll register
Company policy and CBA provisions (if any)
Leave approvals (to prove eligibility)

B. Where disputes go

Disputes are typically pursued through DOLE mechanisms or labor tribunals depending on the nature of the claim and whether it involves money claims, employment relationship issues, or enforcement matters.

9) Bottom Line

When a regular holiday falls on an employee’s rest day, the day remains a regular holiday for pay purposes. An eligible employee who does not work is generally entitled to holiday pay (100% of daily wage). If the employee works on that day, the employee is entitled to a higher premium reflecting that it is both a regular holiday and a rest day, with overtime premium added if work exceeds eight hours. Eligibility rules—especially absence without pay on the workday immediately preceding the holiday—can affect entitlement and must be checked against authorized leave and payroll classification.