Holiday Pay Rules When an Employee Is Absent on the Holiday (Philippine Law)

1) Overview

“Holiday pay” is a statutory benefit that compensates employees for regular holidays even if no work is performed, and provides premium pay when work is required on holidays. The rules differ sharply between regular holidays (e.g., New Year’s Day, Bonifacio Day) and special (non-working) days (e.g., Ninoy Aquino Day, All Souls’ Day when declared). Whether an employee is absent on the holiday itself or absent on the workday before the holiday affects entitlement.

This article consolidates the governing principles, employer coverage, qualification rules, and common edge cases—with clear scenarios and sample computations.

2) Legal Basis and Key Concepts

Labor Code (Art. 94) and its implementing rules set the minimum holiday pay standards for the private sector.
Regular holiday vs. special (non-working) day:
- Regular holidays: “no work, still paid” (subject to a qualification-day rule below).
- Special (non-working) days: no work, no pay, unless a company policy, CBA, or practice grants payment.
Daily-paid vs. monthly-paid employees:
- Daily-paid workers are paid for days actually worked and the regular-holiday benefit if qualified.
- Monthly-paid employees receive a fixed monthly salary covering all days of the month, including unworked regular holidays; deductions may still occur if the qualification-day rule is not met or if the day(s) around the holiday are on leave without pay.
Coverage (private sector): Applies generally to rank-and-file employees regardless of status (probationary, regular, project, seasonal), except categories excluded by law (e.g., government employees, managerial employees, certain field personnel whose hours cannot be determined with reasonable certainty, domestic workers covered by a separate law, etc.). There is also a long-standing small retail/service exemption under the holiday pay provision; check your sector and headcount.

3) The Core Rule When the Employee Is Absent on the Holiday

A. Regular Holiday — Absent on the holiday itself

If the employee does not work on a regular holiday, they are still entitled to 100% of the daily wage for that day provided they meet the qualification-day rule (below).
If they do not meet the qualification-day rule, the regular holiday need not be paid.

B. Special (Non-Working) Day — Absent on the holiday itself

No work, no pay is the default.
Payment applies only if there is a CBA, company policy, or a consistent practice granting pay despite absence, or if the employee actually works that day (then a premium applies).

4) The “Qualification-Day” Rule for Regular Holidays

An employee becomes entitled to regular holiday pay only if they are present or on leave of absence with pay on the workday immediately preceding the regular holiday.

Present the day before = qualified (holiday pay due).
On paid leave the day before = qualified (holiday pay due).
Absent without pay the day before = not qualified (no regular holiday pay), unless a more generous policy/CBA applies.
The law focuses on the day immediately preceding the holiday. Absent on the day after the holiday does not disqualify entitlement unless a stricter company/CBA rule validly provides otherwise.

Practical note: Many employers adopt “present before and after” rules in policy; only the preceding day is the legal qualifier. A stricter policy must be consistent with law and with any CBA.

5) Successive Regular Holidays (e.g., Maundy Thursday and Good Friday)

Absent on the workday immediately preceding the first regular holiday: generally not entitled to holiday pay for the first holiday.
For the second consecutive regular holiday:
- If the employee worked on the first holiday, they gain entitlement to the second holiday’s pay (subject to schedules and qualifying presence relative to that day).
- If they also did not work on the first holiday (and failed to qualify), they will usually not be entitled to the second either, unless they satisfy the qualifier for the second holiday (e.g., there is an intervening workday that they attend, which is rare for back-to-back holidays).

6) Work Performed on a Holiday (for context)

Even though this article centers on absence, entitlement is easier to understand with the work-on-holiday rules:

Regular holiday worked: at least 200% of the daily wage for the first eight hours; overtime on a regular holiday is at least 260% (8 hours + OT premium). Night shift differentials, if any, are computed on the increased base.
Special (non-working) day worked: at least 130% for first eight hours; overtime at least 169%. If it also falls on the employee’s rest day, premiums increase further under the rules.

7) Common Absence Scenarios and Outcomes

Scenario	Day Before Holiday	Holiday Type	Worked on Holiday?	Pay Result
A. Absent on the holiday; present the day before	Present	Regular holiday	No	100% of basic daily wage for the holiday
B. Absent on the holiday; absent without pay the day before	AWOL/LWOP	Regular holiday	No	No holiday pay (fails qualification)
C. Absent on the holiday; on paid leave the day before	Leave with pay	Regular holiday	No	100% (qualified)
D. Absent on the holiday; present the day before	Present	Special (non-working)	No	No pay by default (unless policy/CBA/practice says otherwise)
E. Worked on the holiday; absent the day before	AWOL/LWOP	Regular holiday	Yes	Paid the “worked” holiday premium (work actually performed governs), but the unworked holiday pay portion can still be denied for failing the qualifier if policy separates them. In practice, paying the correct premium for hours actually worked is required.
F. Two consecutive regular holidays; absent the day before the first	AWOL/LWOP	Regular holiday ×2	No	Generally no pay for both, unless the employee works on Day 1 (then Day 2 may be due) or otherwise qualifies for Day 2

AWOL = absent without official leave. LWOP = leave without pay.

8) Leaves, Suspended Work, and Special Situations

Leave with pay (vacation/sick) on the day before a regular holiday: employee qualifies for holiday pay even if they do not report on the holiday itself.
Leave without pay the day before a regular holiday: not qualified for holiday pay.
Company-initiated suspension of work (e.g., due to calamity) on the day before the holiday: apply your calamity/work-suspension policy and government issuances for that period. If there is no workday immediately preceding (e.g., mid-shutdown), treat the nearest scheduled workday as the relevant “preceding day” for qualification.
Probationary, project, seasonal employees: covered while the employment relationship subsists and they meet the qualifier.
Resignation/termination effective before the holiday: no employer-employee relationship on the holiday; no holiday pay. If the last day worked is the day before the holiday and the employment ends at close of business that day, the employee is still employed on the holiday date and should receive regular holiday pay if qualified.
Flexible/rotating schedules: the “workday immediately preceding” refers to the employee’s scheduled workday, not the calendar day.
No regular workday before a holiday (e.g., newly hired, or the schedule starts after the holiday): the qualifier cannot be met if no preceding scheduled workday exists; treat entitlement per strict rule (no pay), unless a more generous policy applies.

9) Monthly-Paid vs. Daily-Paid: Practical Differences When Absent

Monthly-paid: The monthly salary ordinarily covers unworked regular holidays. However, if an employee is on leave without pay (or not yet on the payroll) on the qualifying day, employers may pro-rate the month to reflect the failed qualification (or the period not on payroll).
Daily-paid: Entitlement to the 100% regular-holiday pay turns on meeting the qualification-day rule; special days remain no work, no pay unless policy/CBA/practice states otherwise.

10) Small Retail/Service Establishments

Historically, retail and service establishments employing fewer than ten (10) workers have been exempt from the regular-holiday pay requirement. Employers should verify if they fall within this narrow exemption and whether later issuances or local wage orders affect their obligations. When in doubt—and especially as headcount fluctuates—apply the benefit or seek tailored legal advice.

11) Company Policies, CBAs, and Past Practice

The Labor Code sets the floor, not the ceiling. Employers may provide:

Payment on special days even when unworked;
Relaxed qualification (e.g., waiving the “day-before” presence requirement);
Broader coverage than the law; or
More favorable premium rates.

Consistent practice over time can ripen into an enforceable benefit. Changes require compliant implementation (e.g., through bargaining or properly issued policy updates that do not diminish vested benefits).

12) Sample Computations (Daily-Paid Worker)

Assume basic daily wage = ₱600.

Regular holiday, unworked; qualified
- Pay = ₱600.
Regular holiday, unworked; not qualified (absent w/o pay the day before)
- Pay = ₱0.
Regular holiday, worked 8 hours; qualified or not
- Pay for the day worked = 200% × ₱600 = ₱1,200.
- (If not “qualified,” the separate unworked-holiday component is irrelevant because the employee actually worked; what matters is paying the correct holiday-work premium.)
Special non-working day, unworked
- Default = ₱0, unless company/CBA/practice grants pay.
Special non-working day, worked 8 hours
- Pay = 130% × ₱600 = ₱780.
- If it also falls on the rest day, applicable rules increase the multiplier.

13) Compliance Checklist for HR/Payroll

Identify the holiday type (regular vs. special) for each declared date.
Confirm employee status (daily vs. monthly) and coverage.
Check presence/paid-leave on the workday immediately preceding a regular holiday.
Verify company policies/CBAs/practices that may grant more favorable benefits.
Watch for successive regular holidays and rotating schedules.
Document approvals for paid leaves and any policy exceptions.
For small retail/service firms, confirm if the <10 data-preserve-html-node="true" employees exemption applies.
Ensure correct premium rates if work is performed on the holiday.
Keep statutory and company rules synchronized in payroll systems.

14) Quick FAQ

Q1: If an employee is absent on the holiday but worked the day before, is the regular holiday still paid? A: Yes. For regular holidays, no work, still paid (100%) if the employee was present or on paid leave the workday immediately preceding the holiday.

Q2: If the employee is absent on the day before a regular holiday without pay, do we still pay the regular holiday? A: No. They failed the qualification-day rule.

Q3: Does absence on the day after the holiday forfeit regular holiday pay? A: No under the statutory rule (it focuses on the preceding workday), unless a valid, more stringent policy/CBA says otherwise.

Q4: What about special non-working days? A: Default is no work, no pay. Pay only if worked or if policy/CBA/practice grants pay.

Q5: Are monthly-paid employees always paid for regular holidays even if absent on the holiday? A: Generally yes, because the monthly rate covers all days; however, leave-without-pay or failure of the qualification-day rule may justify pro-rating for that period.

15) Final Notes

The above are minimum standards; more generous policies prevail.
Always align with the most recent presidential proclamations declaring the year’s holidays, and any DOLE advisories for computation guidance.
When disputes arise (e.g., qualification in rotating shifts, successive holidays, or small-establishment exemptions), document schedules, attendance, and leave approvals, and seek advice specific to your facts and region.