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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 holiday.
- Every employee covered by the Holiday Pay Rule is entitled to the minimum wage rate.
- An 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.
Holiday pay refers to the payment of the regular daily wage for any unworked regular holiday.
Who shall be entitled to holiday pay?
The law says:
This benefit applies to all employees except:
- Government employees, whether employed by the National Government or any of its political subdivisions, including those employed in government-owned and/or controlled corporations with original charters or created under special laws;
- Those of retail and service establishments regularly employing less than ten (10) workers;
- Kasambahay and persons in the personal service of another;
- Managerial employees, if they meet all of the following conditions:
4.1 Their primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof;
4.2 They customarily and regularly direct the work of two or more employees therein; and
4.3 They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to hiring, firing, and promotion, or any other change of status of other employees are given particular weight.
- Officers or members of a managerial staff, if they perform the following duties and responsibilities:
5.1 Primarily perform work directly related to management policies of their employer;
5.2 Customarily and regularly exercise discretion and independent judgment;
5.3 (a) Regularly and directly assist a proprietor or managerial employee in the management of the establishment or subdivision thereof in which he or she is employed; or (b) execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision, special assignments and tasks; and
5.4 Do not devote more than twenty percent (20%) of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs 5.1, 5.2, and 5.3 above.
- 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. (3B, Holiday Pay, Handbook Workers’ Statutory Monetary Benefits, 2022 Edition)
What are the regular holidays?
The law says:
Article 94. Right to Holiday Pay – (c) As used in this Article, “holiday” includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December of the day designated by law for holding a general election. (Section 94, Labor Code of the Philippines)
What is the rule on compensability of the 13th month pay?
The law says:
Every employee covered by the Holiday Pay Rule is entitled to the minimum wage rate (daily basic wage and COLA). 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. Work performed on that day merits at least twice (200%) the daily wage of the employee. (3C, Holiday Pay, Handbook Workers’ Statutory Monetary Benefits, 2022 Edition)
Thus, an 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.
Jurisprudence says:
Under Article 94 of the Labor Code of the Philippines (Labor Code), every worker shall be paid his/her regular daily wage during regular holidays. As correctly explained by the CA, employees covered by the holiday pay shall be paid their regular daily wages during the regular holiday even if no work is rendered. Thus, an employee must receive 100% of his/her daily wage even if he/she does not work on a regular holiday. This rule is subject to the qualification that the employee must be present, or on leave of absence with pay on the working day immediately preceding the regular holiday to be entitled to the holiday pay. Thus, an employee who is on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if he/she has not worked on such regular holiday.
On the other hand, an employee who is required to work on a regular holiday shall be paid at least 200% of his/her regular daily wage with the qualification that if the holiday work falls on the scheduled rest day of the employee, he/she shall be entitled to all additional premium of at least 30% of his/her regular holiday rate of 200% based on his/her regular wage rate. The employee is also entitled to additional pay for work performed in excess of eight hours on a regular holiday. (Nippon Paint Philippines v. Nippon Paint Philippines Employees Association, G.R. No. 229396, June 30, 2021)
Related article: Who are not entitled to holiday pay?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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