Holiday Pay and Employee Absence in the Philippines
(Everything employers, HR managers, and workers need to know)
1. Statutory framework
| Source of law | Key provision |
|---|---|
| Article 94, Labor Code (PD 442) | Guarantees every worker 100 % of the regular daily wage for an un-worked regular holiday, except retail/service firms that employ fewer than 10 workers. (Labor Law Library) |
| Rule IV, Book III, Omnibus Rules | Details when the 100 % “no-work-yet-paid” rule applies and the premium rates (200 % or 300 %) when work is performed on the holiday. (Lawphil) |
| Annual DOLE Labor Advisories | Re-state the same formula each year and remind employers that presence (or paid leave) on the work-day immediately preceding the holiday is required for daily-paid employees. Ex.: Labor Advisory No. 06-2024 for Labor Day 2024; DOLE pay rules for Labor Day 2025. (PMA Philippines, Inquirer.net) |
Regular vs. special non-working day The rules below refer to regular holidays (New Year’s Day, Independence Day, etc.). On special non-working days, the default rule is “no work, no pay,” unless a more generous CBA/company policy applies.
2. Who is (and is not) covered
- Covered: All rank-and-file employees, whether monthly- or daily-paid, who have rendered at least one (1) day of service.
- Excluded: Managerial employees, field personnel paid on “pure commission,” and workers in retail/service establishments with < 10 employees (unless the company voluntarily grants the benefit). (Lawphil)
Monthly-paid employees already receive their salary for all days of the month; the holiday pay is embedded. Daily-paid employees must meet the qualifying-day rule discussed next.
3. The qualifying-day rule and employee absence
| Scenario | Entitlement to the 100 % holiday pay (un-worked day) |
|---|---|
| Present or on paid leave on the work-day immediately before the holiday | Yes – full 100 % of daily wage |
| Absent without pay on both the day before and the day after the holiday | No – holiday pay is forfeited |
| Absent without pay only before or only after the holiday | Still entitled – presence/paid leave on either side is enough |
| Day before the holiday is the worker’s scheduled rest-day or the company declared it a “no-work” day | The worker remains entitled provided he/she was present or on paid leave on the last working day actually worked before the holiday. (Respicio & Co., RESPICIO & CO.) |
Half-day absence: DOLE treats a half-day as “present” if paid; if treated as leave without pay it counts as an absence.
4. Frequently asked absence situations
| Situation | Effect on holiday pay |
|---|---|
| Sick Leave with pay (SL) on the day before | Counts as present → entitled |
| Sick Leave without pay / SL exhausted | Counts as absence → follow table above |
| Maternity / Paternity leave (SSS-paid) | Considered paid leave → entitled |
| Authorized suspension without pay (e.g., preventive suspension) | Counts as absence → holiday pay forfeited |
| AWOL / unauthorized absence | Counts as absence → holiday pay forfeited |
| Work-from-home day before the holiday | Counts as present (same rules apply) |
| Company shut-down the day before | Employees are not deemed absent; they are still entitled on the holiday. (Lawphil) |
5. Worked holiday after an absence
Even if the employee was absent the day before, once he or she actually works on the regular holiday, the premium applies:
- 200 % of basic wage for the first 8 hours
- +30 % on that 200 % rate if the holiday also falls on the scheduled rest-day (effectively 260 %)
- +30 % of hourly rate on said day for overtime hours (> 8 hrs)
Absence before the holiday does not lower these premium rates. (Lawphil)
6. Jurisprudence highlights
| Case | Lesson |
|---|---|
| Nippon Paint Philippines v. Masikap (G.R. 229396, June 15 2021) | Rest-day-holiday overtime must be paid 200 % + 30 %; court reiterated that benefits already enjoyed cannot be reduced (non-diminution). (Lawphil) |
| Auto Bus Transport Systems v. Bautista (G.R. 187698, Aug 2010) | Commission-paid or task-basis workers may still claim holiday pay if they don’t fall under Article 82 exemptions. (Lawphil) |
| Macasio v. North Sea Marine (G.R. 195466, July 2014) | Re-affirms that pakyaw workers are covered unless field personnel criteria are met; clarifies coverage of holiday pay vis-à-vis service incentive leave. (Lawphil) |
7. Latest DOLE advisories and payroll practice (2024 - 2025)
- Labor Advisory No. 06-2024 (Labor Day) and the 2025 Labor Day pay-rules advisory both restate the qualifying-day rule and the 200 %/300 % formulas, underscoring employer liability for under-payment. (PMA Philippines, Inquirer.net)
- DOLE regional offices actively conduct payroll audits; failure to pay the correct holiday pay (or wrongfully withholding it due to mis-reading the absence rules) may incur double-indemnity penalties under Article 288-A and possible criminal liability under Article 303.
8. Compliance checklist for HR & payroll
- Track attendance accurately for the work-day immediately preceding and following every regular holiday.
- Flag paid vs. unpaid leave automatically; integrate your leave-management system with payroll.
- Distinguish monthly-paid from daily-paid employees; apply the qualifying-day rule only to the latter.
- Issue clear memos when the company declares special no-work days to avoid mistaken forfeiture.
- Include domestic workers (kasambahays)—RA 10361 extends Article 94 protection. (RESPICIO & CO.)
- Document consent for any overtime work on a holiday and reflect the correct 200 %/260 %/300 % multipliers on the payslip.
9. Practical examples
| Day-before status | Holiday worked? | Pay due |
|---|---|---|
| Absent without pay on 30 Apr → did not work 1 May | No holiday pay (qualifying-day rule) | |
| Absent on 30 Apr but filed paid sick leave → did not work 1 May | 100 % of daily wage | |
| Absent without pay on 30 Apr → worked 1 May (8 hrs) | 200 % of daily wage | |
| Rest-day on 30 Apr → worked 1 May (8 hrs) | 260 % of daily wage | |
| Present 30 Apr → did not work 1 May | 100 % of daily wage |
(The figures above are exclusive of COLA where applicable.)
10. Take-aways
- Daily-paid employees lose the 100 % benefit only when they are absent without pay on both sides of the holiday.
- Presence or any paid leave the day before (or after) preserves the entitlement.
- Once an employee works on the holiday, the absence rule is irrelevant—the premium rates always apply.
- Annual DOLE advisories plus Supreme Court doctrine consistently uphold the rule; non-compliance exposes employers to legal and monetary risk.
Employers should therefore align attendance monitoring, leave approval, and payroll programming well ahead of every regular holiday to ensure that absence is correctly classified and holiday pay is correctly computed.