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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE
- Holiday Pay refers to the payment of the regular daily wage for any unworked regular daily holiday.
- Every employee shall be paid his regular daily wage during regular holidays. The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate.
- Every employee is entitled to at least 100% of his/her minimum wage rate even if he/she did not report for work, provided he/she is present or is on leave of absence with pay on the work day immediately preceding the holiday.
What is Holiday Pay?
The 2022 Handbook on Workers’ Statutory Monetary Benefits defines holiday pay as the “payment of the regular daily wage for any unworked regular daily holiday.”
The law says:
“As used in the rule, the term ‘regular holiday’ shall exclusively refer to: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the last Sunday of August, the thirtieth of November, the twenty-fifth and thirtieth of December.” (Section 3, Rule IV, Book III, Omnibus Rules Implementing the Labor Code)
Rule on compensability in case of absences
Every employee covered by the rule on holiday pay is entitled to the prevailing minimum wage rate. This means that the employee is entitled to at least 100% of his/her minimum wage rate even if he/she did not report for work, provided he/she is present or is on leave of absence with pay on the work day immediately preceding the holiday.
The law says:
“D. Absences
- All covered employees shall be entitled to holiday pay when they are on leave of absence with pay on the workday immediately preceding the regular holiday. Employees who are on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if they do not work on such regular holiday.
- Employers shall grant the same percentage of the holiday pay as the benefit granted by competent authority in the form of employee’s compensation or social security payment, whichever is higher, if the employees are not reporting for work while on such leave benefits.
- Where the day immediately preceding the holiday is a non-work day in the establishment or the scheduled rest day of the employee, he/she shall not be deemed to be on leave of absence on that day, in which case he/she shall be entitled to the holiday pay if he/she worked on the day immediately preceding the nonwork day or rest day.” (Holiday Pay, 2022 Handbook on Workers’ Statutory Monetary Benefits, adopting Section 6, Rule IV, Book III, Omnibus Rules Implementing the Labor Code)
Jurisprudence says:
In the case of Wellington Investment and Manufacturing Corporation v. Trajano (G.R. No. 114698, July 03, 1995), the Supreme Court ruled that a legal Holiday falling on a Sunday does not create an additional workday nor create a legal obligation for the employer to pay extra, aside from the usual holiday pay to its monthly-paid employees. To wit:
“There is no provision of law requiring any employer to make such adjustments in the monthly salary rate set by him to take account of legal holidays falling on Sundays in a given year, or, contrary to the legal provisions bearing on the point, otherwise to reckon a year at more than 365 days. As earlier mentioned, what the law requires of employers opting to pay by the month is to assure that “the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve,” and to pay that salary “for all days in the month whether worked or not,” and “irrespective of the number of working days therein.”
Successive regular holidays
Where there are two (2) successive regular holidays, like Maundy Thursday and Good Friday, an employee may not be paid for both holidays if he/she absents himself/herself from work on the day immediately preceding the first holiday, unless he/she works on the first holiday, in which case he/she is entitled to his/her holiday pay on the second holiday. (Holiday Pay, 2022 Handbook on Workers’ Statutory Monetary Benefits)
Holiday pay of certain types of employees
For covered employees paid on piece-rate basis, his/her holiday pay shall not be less than his/her average daily earnings for the last seven (7) actual work days preceding the regular holiday; provided, however, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate.
For seasonal workers, they may not be paid the required holiday pay during off-season when they are not at work.
Workers who do not have regular working days, such as stevedores, shall be entitled to the benefit of holiday pay.
Question: Are employees of retail and service establishments with less than ten (10) employees required to give holiday pay to its employees?
Answer: The rule on holiday pay does not apply to employees of retail and service establishments regularly employing less than ten workers.
Article 94 of the Labor Code states that:
ART. 94. Right to Holiday Pay. –
(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;
(b) xxx”
Section 1, Rule IV, Book III, Omnibus Rules Implementing the Labor Code provides that:
“Section 1. Coverage. — This rule shall apply to all employees except:
(a) Those of the government and any of the political subdivision, including government-owned and controlled corporation;
(b) Those of retail and service establishments regularly employing less than ten (10) workers;
(c) Domestic helpers and persons in the personal service of another;
(d) Managerial employees as defined in Book Three of the Code;
(e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. (Emphasis supplied.)
The rationale for this benefit is to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay. (Jose Rizal College v. National Labor Relations Commission, G.R. No. L-65482, December 01, 1987)
Related article: What are regular and special holidays?
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