Holiday Pay Rules for Employees Working on a Local Special Non-Working Day Outside the LGU (Philippines)

I. Overview

In the Philippines, special (non-working) days are dates declared by law or proclamation when work may be suspended and, unlike regular holidays, the default rule is “no work, no pay.” Aside from nationwide proclamations, local governments (LGUs) may declare local special non-working days—for example, a city or province foundation day—effective only within their territorial jurisdiction.

This article explains how pay rules apply when an employee works on a local special non-working day but the worksite is outside the LGU that declared it, including hybrid/remote and fieldwork situations. It synthesizes Department of Labor and Employment (DOLE) wage advisories, the Labor Code’s wage standards, the Local Government Code’s grant of powers to LGUs, and common payroll practice.

II. Key Principles

Territoriality of Local Holidays. Local special non-working days bind establishments and work performed within the LGU that issued the declaration. They do not automatically apply outside that territory.
Place of Work Controls. For private-sector pay purposes, entitlement to special-day premiums depends primarily on where the work is performed (or the agreed place of work for remote arrangements), not the employee’s home address or where the employer’s head office is registered.
National vs. Local Declarations.
- National special days (e.g., EDSA anniversary when so declared) apply nationwide or to the areas specified in the presidential proclamation.
- Local special days (e.g., City A Day) apply only in City A.
Default Compensation Rules on Special (Non-Working) Days.
- Unworked: No pay, unless there is a company policy, CBA, or practice granting payment.
- Worked (within the LGU covered by the special day): 130% of the basic daily wage for the first 8 hours.
- Worked on a Rest Day that is also a Special Day (within the covered LGU): 150% of the basic daily wage for the first 8 hours.
- Overtime: Work beyond 8 hours on a special day is paid an additional 30% of the hourly rate on that day (i.e., 130% × 1.30 = 169% per overtime hour). If it also falls on a rest day, the OT rate is the 150% hourly rate × 1.30 = 195% per overtime hour.
- Night Shift Differential (10 p.m.–6 a.m.): Additional 10% of the hourly rate calculated on the applicable special-day rate.
Monthly-Paid vs Daily-Paid Employees.
- Daily-paid workers follow the strict special-day rules above.
- Monthly-paid employees are generally paid a fixed monthly salary that already contemplates unworked special days, depending on the employer’s “paid-for-all-days” policy. However, premiums for actual work on the special day must still be added to the monthly salary if the employee works on that day within the covered LGU.

III. Working Outside the Declaring LGU: What Happens?

A. Scenario 1: Employee’s home is in the LGU with a local special day, but the worksite is elsewhere (e.g., lives in Cavite, reports to a Makati office)

If the employee reports to work in Makati (where no special day exists), the local special day does not apply.
Result: No special-day premium is due; the day is treated as a regular working day at the worksite.

B. Scenario 2: Employee is remotely working from the LGU that declared the local special day

If the agreed place of work (per contract, telecommuting policy, or written assignment) is the employee’s home in the LGU that declared the special day, then the employee is working within the covered locality.
Result: Apply special-day rules (130%/150% etc.) for hours actually worked that day.

Practical tip: Employers should document the employee’s regular remote work location. If the policy allows employees to self-select a daily location, the location actually used that day may control.

C. Scenario 3: Employee is field-assigned to the declaring LGU on that date

Work performed in the covered LGU triggers special-day premium rules for those hours, even if the employer is based elsewhere.
If only part of the shift is in the covered LGU, apply the premium pro-rata to the hours spent working there; hours outside the LGU follow ordinary rates.

D. Scenario 4: Multi-site employers (branches in multiple LGUs)

Each branch follows the holiday regime of the LGU where it operates.
An employee temporarily deployed to a branch within the LGU on its local special day earns the special-day premium for work there.

IV. Computation Templates

Assume a basic daily wage of ₱W and an 8-hour workday; hourly rate ₱H = ₱W / 8.

Worked on a Local Special Day (within the covered LGU)
- First 8 hours: ₱W × 1.30
- OT hour(s): ₱H × 1.30 × 1.30 = ₱H × 1.69 per hour
Worked on a Local Special Day that also falls on the employee’s Rest Day (within the covered LGU)
- First 8 hours: ₱W × 1.50
- OT hour(s): ₱H × 1.50 × 1.30 = ₱H × 1.95 per hour
Night Shift Differential (any applicable scenario above)
- Add 10% × (applicable hourly rate) for night hours.
Worked Outside the Declaring LGU
- Treat as ordinary day (no special-day premium), unless company policy grants otherwise.

V. Entitlement Conditions and Common Payroll Rules

“No Work, No Pay” still governs local special days if unworked—unless there is a beneficial policy, CBA, or established practice paying even when unworked.
“Must-Work” Directives. Employers may require work on a local special day (business necessity), subject to payment of the proper special-day premium if the work is performed within the covered LGU.
Absence Before the Special Day. Unlike regular holidays, special days have no statutory “present or on leave with pay on the day immediately preceding” rule. If the employee actually works on the special day within the LGU, the premium applies regardless of attendance patterns before/after—unless a valid company policy says otherwise (and is not used to defeat statutory benefits).
Allowances & Supplements. Compute percentage premiums on the basic wage. Cost-of-living allowances and fixed supplements are treated according to DOLE rules and the wage orders that define what forms part of “basic wage.”
Non-Diminution & Practice. If the employer has consistently paid for unworked local special days or recognized the day company-wide, that can ripen into a benefit that cannot be unilaterally withdrawn.

VI. Determining the Applicable LGU for Remote/Hybrid Teams

Contractual Place of Work. The safest anchor is the written place of work (e.g., “Employee’s home in City A” or “Employer’s office in City B”).
Policy Hierarchy. If the contract is silent, look to telecommuting/remote-work policies, memoranda, and actual practice.
Mobility/Hot-desking Models. If employees freely choose daily locations, the actual location on the day may determine whether the local special day applies. Employers should require a declared daily work location (e.g., via HRIS) to manage compliance.

VII. Illustrative Examples

Lives in Laguna, works in BGC (Taguig). Laguna has a local special day; Taguig does not. Employee reports to BGC.
- Result: Treated as a regular working day; no special-day premium.
WFH in Laguna on Laguna Day per approved remote-work schedule.
- Result: Special-day premiums apply (130%/150%/OT as applicable).
Makati-based salesperson spending the morning at a client in Cavite on Cavite Day, then returns to Makati.
- Result: Pay Cavite-hours at special-day rates, Makati-hours at ordinary rates.
Monthly-paid supervisor WFH in Quezon City on QC Day and actually works.
- Result: Monthly salary continues; add special-day premium on the worked day because work occurred within QC.

VIII. Documentation & Compliance

Keep the paper trail:
- Proclamations/ordinances declaring the local special day;
- Employee worksite or remote-work location approvals;
- Time records distinguishing where work was performed;
- Payroll computations showing base, premium, OT, NSD, and any rest-day tagging.
CBAs and Company Policies should name the LGUs whose local special days the company will honor company-wide (if any) to avoid ambiguity.
Dispute & Prescriptive Period: Money claims for holiday premiums generally prescribe after three (3) years from when the cause of action accrued; keep records accordingly.

IX. Frequently Asked Questions

Q1: Our head office is in City A (with a local special day), but our employee worked in City B (no special day). Do we pay a premium? A: No. Place of work governs; work outside City A is treated as an ordinary day.

Q2: The employee lives in the LGU with the special day but worked on-site elsewhere. Does the commute origin matter? A: No. The worksite controls, not the residence.

Q3: If the employee is on official business in the declaring LGU just for that day, are premiums due? A: Yes—for the hours actually worked within that LGU.

Q4: Can we voluntarily recognize a local special day company-wide? A: Yes, via policy or CBA. Be aware that consistent grant may become a non-diminishable benefit.

Q5: How do we compute if the special day also falls on a rest day? A: First 8 hours at 150%; overtime at 195% per hour; apply NSD (10%) where applicable.

X. Practical Checklist for HR & Payroll

Identify: Is the day a national or local special day? Which LGU(s) are covered?
Map: Where did each affected employee actually work (on-site/remote/field) that day?
Classify: Was it a rest day? Were OT and NSD incurred?
Compute: Apply 130% / 150% / 169% / 195% as appropriate; add 10% NSD where due.
Document: Keep location approvals, time sheets, and computation sheets.
Communicate: Publish a short holiday matrix per site/LGU before the date; require employees to declare their work location for the day.

XI. Bottom Line

For local special non-working days, location is everything. If the employee works within the LGU that declared the special day, DOLE’s special-day premium rules apply. If the employee works outside the declaring LGU, it’s a regular day—unless your company or CBA provides a more generous benefit. Clear documentation of where work is performed (especially under remote and field-based models) is the key to clean, compliant payroll.