Employee benefits can be a bit of a minefield for employers and those in the HR function. Of these, the most important is the holiday pay that empowers employees to receive their wages for the work done during the holidays. When it comes to the Philippines, knowing about holiday pay is not just about the legal requirements – it is about creating a good mood and happy employees.
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Why It’s necessary to have holiday pay
Holiday pay is not just an entitlement but an expression of the employer’s gratitude to the employees. Thus, following the holiday pay laws, organizations not only meet legal requirements but also contribute to employees’ motivation, performance, and employee turnover reduction. This way, understanding the importance of holiday pay will lead to a motivated and loyal workforce.
Philippine Law and holiday pay wages
The Philippines also has holiday pay and this is under the Labor Code. Here, there are two types of holidays recognized under Philippine law:
Regular Holidays:
- New Year’s Day (January 1)
- Maundy Thursday and Good Friday
- Independence Day (June 12)
- National Heroes Day (last Monday of August)
- Bonifacio Day (November 30)
- Christmas Day (December 25)
- Rizal Day (December 30)
- and more as specified by law.
Special (Non-Working) Days:
- Chinese New Year
- Ninoy Aquino Day (August 21)
- All Saints Day (November 1)
- Holy Week schedule
- and others as declared by the President.
As a result, there are rules in every type of holiday concerning the amount to pay employees. That is why, it is important for employers to know the differences.
Do you get a holiday pay?
Under the Labor Code, the following employees gets to have their holiday pay:
Regular Employees. These are employees who have worked for the company for one month as per the records. What’s more, they are also allowed to be given holiday pay hence if they are not working on these days they will be paid.
Daily-Paid Employees. The following employees have their wages determined by the number of days they put in at the workplace: If they are called upon to work on any of the said holidays, they shall be paid at least two hundred percent (200%) of the basic daily wage. This ensures that they are paid well for working on a day that is otherwise a weekend and therefore they do not have to work on their free day.
Monthly-Paid Employees. Such employees are given a specific sum of money at the close of every month in form of a salary. They should be paid their normal salary without any form of deduction on account of holidays in order to have a uniform salary payment throughout the year notwithstanding the number of holidays in a month.
Who doesn’t get the pay?
There are certain employees exempted from receiving holiday pay.
- Workers for retail and service companies with less than 10 regular employees
- Managerial employees
- Managerial staff members and officers
- Government employees
- Kasambahays (domestic helpers)
- Employer’s family members who are dependent on the employer for support
- Employees engaged on a task, contract, or purely commission basis
For the record, monthly-paid employees have holiday pay – it’s part of their package.
Computing Holiday Pay in the Philippines
We’ll share some examples to help you understand the concept of holiday pay in the Philippines.
Scenario 1: Regular Holiday
Example:
Juan is a daily paid employee and he receives Php 600 every day. In this scenario, he worked on a standard holiday, for instance, Independence Day or December 25.
Computation:
- Pay Rate: Daily Rate × 200%.
- Pay multiply by 2 = Php 600 x 2
- Regular Holiday Pay = Php 1,200
Juan should be given Php 1,200 for working on a regular holiday falling on a regular working day. This is because regular holidays entail paying employees double the daily rate for working on such days as provided for by the Philippine Labor Law.
If Juan worked overtime, he would be entitled to a pay 30% more than the double pay.
Computation:
- Regular Holiday Pay: Php 600 x 200% x 130% x number of excess hours from 8 hours of work
Scenario 2: Special Non-Working Holiday
Carlos goes to work and gets paid Php 800 per day. He performed his task during a special non-working day, for example, Black Saturday.
Computation:
- Pay Rate: Daily Rate × 130%
- Pay multiply by 1.3 = Php 800 × 1.3
- Special Holiday Pay = Php 1,040
Carlos’ pay should be Php 1,040 for working during the special non-working holiday. This computation is in accordance with the rule that employees working on special non-working holidays get an additional 30% of their regular daily rate.
If Carlos worked overtime, then he gets a 30% raise.
- Pay Rate: Daily Rate × 130% x 130%
- Pay multiply by 1.3 = Php 800 × 1.3 x 1.3
- Special Holiday Pay = Php 1,352
Know your holiday pay
This is why it’s important to know and apply the proper rules on holiday pay in the Philippines. By identifying who gets paid and how much, employers can stay clear of legal complications and ensure that their employees are happy.
