Short answer up front: In the Philippines, a U.S. holiday is ordinarily just a regular working day. As a rule, an employer may not deduct wages simply because the day is a U.S. holiday—unless (a) the employee is daily-paid and did not work, (b) the employee is monthly-paid but absent without leave credits, or (c) a lawful company policy/collective bargaining agreement (CBA) validly treats the U.S. holiday as a non-working day without pay for certain employees. Anything outside those narrow lanes risks violating rules on holiday pay, wage deductions, non-diminution of benefits, and unilateral changes to terms of employment.

Below is a comprehensive, Philippine-law-centric guide.

I. What Counts as a “Holiday” Under Philippine Law?

Regular holidays and special (non-working) days are fixed by Philippine statute and presidential proclamations (e.g., New Year’s Day, Independence Day, EDSA anniversary).
U.S. federal or state holidays are not Philippine holidays. They are treated as ordinary working days unless the employer voluntarily recognizes them as company holidays via policy, contract, or CBA.

II. Pay Rules Refresher (Philippine Context)

Daily-paid employees (no work, no pay principle)
- Regular working day (not a PH holiday): Paid only if they work. If they do not work, generally no pay, unless company policy says otherwise.
- PH regular holiday (unworked): Entitled to 100% of the daily wage if they were present or on paid leave on the workday immediately preceding the holiday.
- PH special (non-working) day (unworked): Generally no pay, unless company/CBA grants pay.
Monthly-paid employees
- The monthly rate is typically understood to cover all calendar days, including unworked rest days, special days, and regular holidays.
- Deductions from monthly salary are lawful for unpaid absences (e.g., leave credits exhausted) or approved pay-no-work schemes expressly provided in company policy/CBA.

Implication: If a U.S. holiday is not a PH holiday and the day is regularly scheduled work, then:

Daily-paid: If they don’t work because the company shuts down for a U.S. holiday, the default rule is no work, no pay (but see Section IV on employer-caused stoppage).
Monthly-paid: If the employer shuts down and the employee is ready, willing, and able to work, deducting salary is generally disfavored unless a clear policy/CBA says otherwise or the employee uses leave credits.

III. Wage Deduction Rules (When Can You Dock Pay?)

The Labor Code strictly prohibits unauthorized wage deductions. Deductions are generally allowed only if they are:

Required by law (tax, SSS/PhilHealth/Pag-IBIG, etc.);
Authorized in writing by the employee for a lawful purpose and for the employee’s benefit; or
For absences or undertime (i.e., the employee did not render work and has no available paid leave), following the employer’s lawful time-keeping and payroll rules.

Key point: Calling a day a “U.S. holiday” is not, by itself, a lawful ground to deduct wages in the Philippines.

IV. Company-Declared “U.S. Holidays” and No-Work Days

A. If the employer unilaterally declares a non-working day (business closure)

For daily-paid staff, Philippine jurisprudence often treats employer-caused temporary stoppages (not due to the employee’s fault) under the “no work, no pay” principle—unless a law or policy grants pay.
For monthly-paid staff, the safer default is no deductions because the monthly wage compensates for all days of the month. If the employer intends no-pay company holidays for monthly-paid employees, this must be clearly stipulated and consistently applied.

B. If the employer recognizes U.S. holidays as company holidays (benefit)

If paid historically or contractually, this may ripen into a company practice or CBA benefit that cannot be unilaterally withdrawn (non-diminution of benefits rule).
If recognized as unpaid non-working days via a clear, written policy communicated in advance, and no contrary practice is established, pay deductions for non-work on those days may be sustained for daily-paid employees, and—if the policy is explicit—for monthly-paid employees (though this is more sensitive and should be drafted with counsel).

V. Remote Work & Cross-Border Setups (U.S. Company, PH Employee)

Mandatory application of Philippine labor standards: If the employee habitually renders work in the Philippines, Philippine labor standards (minimum wage, holiday pay rules, wage deduction restrictions, service incentive leave, 13th-month pay, etc.) typically apply, regardless of the employer’s domicile or the calendar it follows.
Choice-of-law clauses in contracts cannot waive Philippine statutory minimums. They may fill gaps or govern non-mandatory areas (e.g., equity awards), but not to defeat PH protective statutes.
Operational calendars vs. legal entitlements: A BPO or remote-first employer may align operations to U.S. holidays, but payroll must still comply with PH wage-and-hour rules.

VI. Leave Credits and Forced Leave

Service Incentive Leave (SIL): At least 5 days of paid leave per year for eligible employees (unless a superior leave scheme exists).
May the employer force employees to use leave on U.S. holidays?
- Employers may manage scheduling and may, by clear policy, require offsetting or forced leave in specific situations (e.g., shutdowns), subject to reasonable notice and good-faith implementation.
- If leave credits are available and a policy allows it, charging a U.S. holiday to paid leave avoids wage deduction issues.
- If leave credits are exhausted, an unpaid leave day may lawfully reduce pay for that day.

VII. Non-Diminution of Benefits & Company Practice

If, over time, the employer has consistently paid employees for U.S. holidays (despite no work) or has not deducted from monthly pay when the company closed, that benefit may be deemed established. The employer generally cannot withdraw it unilaterally without violating the non-diminution rule. Practical test: Was the benefit (a) consistent, (b) deliberate, and (c) long-continued? If yes, tread carefully before changing it.

VIII. Special Caution for Salary-Basis (Exempt-Type) Arrangements

While the Philippines does not use the U.S. “exempt/non-exempt” scheme, many professional/managerial staff are monthly-paid on a salary basis. Frequent partial-day deductions or docking pay for employer-initiated closures can signal that the person is effectively hourly/daily-paid, which may trigger classification and compliance headaches. Maintain clear pay-basis rules and consistency.

IX. Compliance Scenarios (Worked Examples)

U.S. Holiday; Office Closed; Daily-Paid Employees
- Facts: Company shuts on July 4 (not a PH holiday).
- Default: No work, no pay for daily-paid—lawful to pay nothing if there’s no contrary policy/CBA/practice.
- Better practice: Offer paid leave charge or flexi-time to mitigate impact.
U.S. Holiday; Office Closed; Monthly-Paid Employees
- Facts: Office closed; employees ready to work.
- Risk: Docking monthly pay may be improper absent a clear policy or employee-initiated leave.
- Safer approach: Pay as usual, or require use of available leave if a pre-announced policy allows.
Employee Takes the Day Off for a U.S. Holiday; Work Continues
- Daily-paid: Treated as a personal absence → no pay (or paid leave if approved and available).
- Monthly-paid: Pro-rate only if leave credits are exhausted and the absence is unpaid under company policy.
Company Policy Recognizes Certain U.S. Holidays as Paid Company Holidays
- If written and consistent, paying employees despite no work is lawful and binding; later withdrawing it risks non-diminution issues.

X. Checklist: Before Deducting Salary for a U.S. Holiday

Is it a Philippine holiday? If yes, apply PH holiday pay rules; if no, continue.
What is the employee’s pay basis? Daily-paid vs monthly-paid.
Is there a written policy/CBA explicitly covering U.S. holidays (paid/unpaid/company holiday/forced leave)?
Any established company practice of paying/not deducting for U.S. holidays?
Were employees given advance notice if the day is treated as unpaid/forced leave?
Do employees have leave credits that policy allows you to charge?
Will a deduction conflict with the salary-basis understanding for monthly-paid personnel?
Are deductions limited to lawful grounds (e.g., true unpaid absence) and properly documented?

XI. Documentation & Process Tips (for Both Employers and Employees)

Publish a calendar each year that flags company-recognized (PH and U.S.) holidays, with clear pay treatment.
Spell out in the handbook/CBA:
- When U.S. holidays are paid vs unpaid;
- When forced leave applies;
- How leave credits are used or advanced;
- Treatment for monthly-paid vs daily-paid staff.
Keep time and payroll records showing absences, leave usage, and basis for any deduction.
Communicate early and apply rules consistently to avoid claims of discrimination or unlawful diminution.
If revising practices, give prospective notice and, if benefits have ripened, negotiate changes rather than impose them.

XII. Bottom Line Rules of Thumb

A U.S. holiday ≠ PH holiday. It’s a regular working day under PH law.
Daily-paid: Lawfully unpaid if no work is performed and no policy grants pay.
Monthly-paid: Do not dock by default if the employee is ready to work and the closure is employer-initiated—unless a clear, prior policy (or CBA) governs, or the employee uses/has no leave credits.
Policies and practice matter: They can create or take away risk. Write them well, announce them early, and apply them uniformly.
When in doubt, charge leave, offer make-up work, or pay—these are typically the safest options under Philippine standards.

This article provides a Philippine-law overview for informational purposes only and is not a substitute for tailored legal advice on specific facts or CBAs.