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Holiday Pay Rules in the Philippines: A Guide for Singapore Companies
Learn about the holiday pay rules in the Philippines with our guide for Singapore companies. Understand the importance and types of holidays to ensure compliance and fair compensation.
Updated Jul 18, 2024
Holiday Pay Rules in the Philippines: A Guide for Singapore CompaniesNot only working hours, holidays hold significant cultural and legal importance in the Philippines, impacting how employers must handle compensation for their employees.
As Singapore companies expand their operations to the Philippines, one of the key aspects of Philippine labor law is holiday pay, a benefit designed to protect employees' rights and ensure they are fairly compensated during national holidays.
This comprehensive guide provides Singapore employers with an in-depth understanding of the holiday pay rules in the Philippines.
What is a Holiday Pay in the Philippines?
Holiday pay in the Philippines refers to the compensation employers must provide to their employees on designated holidays, even if they do not work on those days.
It is a legal requirement aimed at safeguarding Filipino workers' rights and ensuring they can participate in national celebrations of historical and cultural significance (the Asian Transmission Corporation v. CA (Commonwealth Act), G.R. No. 144664, 15 March 2004).
Certain categories of employees, however, are exempt from receiving holiday pay, including government employees, household helpers, managerial staff, and those working in small retail or service businesses.
Payments vary between regular holidays and special non-working holidays, each with its own specific rates and regulations under the Labor Code.
Types of Holidays in the Philippines
There are two main types of holidays in the Philippines, each with specific pay rules: regular holidays and special non-working holidays.
Regular Holidays
Regular holidays are nationwide holidays established by law. Employees are entitled to their full daily wage even if they do not work on these days. If they work, they receive additional compensation. For 2024, the regular holidays are as follows:
- January 1: New Year’s Day
- March 28: Maundy Thursday
- March 29: Good Friday
- April 9: Araw ng Kagitingan (Day of Valor)
- May 1: Labor Day
- June 12: Independence Day
- August 26: National Heroes Day
- November 30: Bonifacio Day
- December 25: Christmas Day
- December 30: Rizal Day
Special Non-Working Holidays
Special non-working holidays are also declared by the government but typically follow the "no work, no pay" principle unless there is a favorable company policy, practice, or collective bargaining agreement. For 2024, the special non-working holidays are:
- February 10: Chinese New Year
- March 30: Black Saturday
- August 21: Ninoy Aquino Day
- November 1: All Saints' Day
- November 2: All Souls' Day
- December 8: Feast of the Immaculate Conception of Mary
- December 24: Christmas Eve
- December 31: Last Day of the Year
Holiday Pay Calculation
Regular Holidays
Employees who do not work on a regular holiday are entitled to 100% of their daily wage. For those who work, the pay is as follows:
- Normal Hours: (Basic Wage + Cost of Living Allowance) x 200%
- Overtime Hours: Hourly rate x 200% x 130% x number of hours worked
- Rest Day: [(Basic Wage + COLA) x 200%] + [30% (Basic Wage x 200%)]
- Rest Day with Overtime: Hourly rate x 200% x 130% x 130% x number of hours worked
Example Calculation:
- Daily Rate: PHP 1,000 (approximately SGD 27)
- Worked on Regular Holiday: PHP 1,000 x 2 = PHP 2,000 (approximately SGD 54)
- Worked Overtime for 2 Hours: PHP 150 x 2 x 1.30 x 2 hours = PHP 780 (approximately SGD 21)
- Worked on Rest Day: PHP 1,000 x 2 + (0.30 x PHP 2,000) = PHP 2,600 (approximately SGD 70)
- Worked Overtime on Rest Day: PHP 150 x 2 x 1.30 x 1.30 x 2 hours = PHP 1,170 (approximately SGD 32)
Special Non-Working Holidays
Employees who do not work on a special non-working holiday are not entitled to pay unless specified otherwise by company policy. For those who work, the pay is as follows:
- Normal Hours: (Basic Wage x 130%) + COLA
- Overtime Hours: Hourly rate x 130% x 130% x number of hours worked
- Rest Day: (Daily rate x 150%) + COLA
- Rest Day with Overtime: Hourly rate x 150% x 130% x number of hours worked
Example Calculation:
- Daily Rate: PHP 1,000 (approximately SGD 27)
- Worked on Special Non-Working Holiday: PHP 1,000 x 1.30 = PHP 1,300 (approximately SGD 35)
- Worked Overtime for 2 Hours: PHP 150 x 1.30 x 1.30 x 2 hours = PHP 507 (approximately SGD 14)
- Worked on Rest Day: PHP 1,000 x 1.50 = PHP 1,500 (approximately SGD 41)
- Worked Overtime on Rest Day: PHP 150 x 1.50 x 1.30 x 2 hours = PHP 585 (approximately SGD 16)
Holiday Absences
An employee who is absent on the workday immediately preceding or succeeding a regular holiday will not be entitled to holiday pay unless they are on paid leave. For successive holidays, if an employee works on the first holiday but is absent on the next workday, they will still receive pay for both holidays.
Legal Basis and Implications
The Labor Code of the Philippines, specifically Articles 94 to 96, outlines the provisions regarding holiday pay. Non-compliance can result in administrative penalties, including fines and potential suspension of operations. The Department of Labor and Employment (DOLE) is the enforcing body, and it conducts regular inspections to ensure compliance.
Temporary Periodic Shutdowns
During temporary shutdowns, such as yearly inventory or machinery repair, holiday pay rules still apply. Employers must ensure employees are compensated according to the Labor Code during these periods.
Practical Tips for Employers
- Advance Planning: Schedule shutdowns around holidays to minimize disruption and ensure compliance.
- Clear Communication: Inform employees in advance about shutdown periods and their holiday pay entitlements.
- Documentation: Keep detailed records of shutdown periods and the corresponding holiday pay calculations.
Taxability of Holiday Pay
Minimum wage workers are exempt from paying withholding taxes on their holiday pay, including benefits like overtime, hazard, and night differential pay.
Compliance and Record-Keeping
Employers must maintain accurate records of employee attendance, holiday pay calculations, and payments made. These records should be readily available for inspection by DOLE. Regular audits and consultations with legal experts can help ensure compliance and address any discrepancies promptly.
Legal Obligations and Compliance
Employers must comply with the holiday pay provisions under the Labor Code of the Philippines and guidelines from the Department of Labor and Employment (DOLE). Failure to adhere to these regulations can result in legal consequences, including labor disputes and potential fines.
Record-Keeping
Proper record-keeping is essential to demonstrate compliance. Employers should maintain accurate attendance logs, pay slips, and other relevant documentation to support their compliance in case of disputes.
Consultation with Legal Experts
Consulting with legal experts or DOLE can help employers understand their obligations and avoid inadvertent violations. This proactive approach fosters a lawful and positive working environment.
Proactive Measures
- Policy Development: Develop comprehensive holiday pay policies that align with the Labor Code and communicate them clearly to employees.
- Training Programs: Conduct regular training sessions for HR personnel to keep them updated on holiday pay rules and compliance requirements.
- Employee Engagement: Encourage employees to report any issues related to holiday pay promptly to address them before they escalate.
Sample Holiday Pay Calculation
Regular Holiday Pay Computation Template
- Employee Name: John Doe
- Daily Wage: SGD 27 (PHP 1,000)
- Worked on Holiday: Yes
- Overtime Hours Worked: 2
Pay for Holiday: SGD 54 (PHP 2,000)
Pay for Overtime: SGD 21 (PHP 780)
Special Non-Working Holiday Pay Computation Template
- Employee Name: Jane Smith
- Daily Wage: SGD 27 (PHP 1,000)
- Worked on Holiday: Yes
- Overtime Hours Worked: 2
Pay for Holiday: SGD 35 (PHP 1,300)
Pay for Overtime: SGD 14 (PHP 507)
FAQs about Holiday Pay Rules in the Philippines
What happens if an employee works on both a regular and special non-working holiday?
If an employee works on both a regular and a special non-working holiday, they should be compensated according to the rules for each type of holiday.
For example, if an employee works on a regular holiday and the next day is a special non-working holiday, they receive holiday pay for the regular holiday and pay at 130% of their daily wage for the special non-working holiday.
How should holiday pay be computed for part-time employees?
For part-time employees, holiday pay should be computed proportionately based on the hours they are scheduled to work. Employers should follow the same percentage increases for holiday work and overtime as they do for full-time employees, but apply these percentages to the part-time employee’s hourly rate.
Are there any exceptions to the holiday pay rules?
Yes, there are exceptions. For instance, managerial employees, field personnel, and other workers not covered by the Labor Code’s holiday pay provisions are exempt. Additionally, holiday pay does not apply to employees who are on leave without pay on the day before or after a holiday.
How are employees notified about holiday pay rules?
Employers are responsible for informing employees about holiday pay rules. This can be done through employee handbooks, company policies, and direct communication. Ensuring that employees understand their entitlements helps prevent disputes and ensures smooth operations
Understanding and adhering to holiday pay rules in the Philippines is crucial for Singapore companies operating in the country.
Properly compensating employees not only ensures compliance with the law but also promotes a positive work environment and good employee relations.
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Herdina Ika
Digital Marketer
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