c. Holiday Pay

A. Conditions of Employment (part 3 of 4)

SECTION 8. Paid-off days. — Nothing in this Rule shall justify an employer in reducing the compensation of his employees for the unworked Sundays, holidays, or other rest days which are considered paid-off days or holidays by agreement or practice subsisting upon the effectivity of the Code.

SECTION 9. Relation to agreements. — Nothing herein shall prevent the employer and his employees or their representatives in entering into any agreement with terms more favorable to the employees than those provided herein, or be used to diminish any benefit granted to the employees under existing laws, agreements, and voluntary employer practices.

• Holidays – Labor Code, art. 94; Omnibus Rules Implementing the Labor Code, Book III, Rule IV, secs. 1-11

Labor Code, art. 94

Article 94. Right to holiday pay.

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;

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; and

Historical text of Labor Code, Article 94; not the current list of regular holidays: 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 and the day designated by law for holding a general election. July 4 and every general-election day are not automatically regular holidays under current law; consult R.A. No. 9492, R.A. No. 9849, and subsequent applicable laws and proclamations.

Omnibus Rules Implementing the Labor Code, Book III, Rule IV, secs. 1-11

Holidays with Pay

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;

The government-employee exclusion covers government offices and government-owned or -controlled corporations with original charters. Employees of government-owned or -controlled corporations without original charters are generally covered by the Labor Code, subject to its other applicable exclusions. 1987 Constitution, Art. IX-B, Sec. 2(1).

(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.

SECTION 2. Status of employees paid by the month. — Employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be paid for all days in the month whether worked or not.

For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve.

SECTION 3. Holiday Pay. — Every employer shall pay covered employees their regular daily wage for any unworked regular holiday, subject to the applicable conditions for holiday pay.

As used in the rule, the term ‘regular holiday’ shall include: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, National Heroes Day on the last Monday of August, the thirtieth of November, the twenty-fifth and thirtieth of December, Eid’l Fitr under R.A. No. 9177, and Eid’l Adha under R.A. No. 9849. Nationwide special nonworking days shall include the first of November, the eighth of December under R.A. No. 10966, and the last day of December. Applicable holiday laws and proclamations govern observance dates and any other regular holidays or special nonworking days.

As used in this Rule legal or regular holiday and special holiday shall now be referred to as ‘regular holiday’ and ‘special day’, respectively.

SECTION 4. Compensation for holiday work. — Any employee who is permitted or suffered to work on any regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent (200%) of his regular daily wage. If the holiday work falls on the scheduled rest day of the employee, he shall be entitled to an additional premium pay of at least 30% of his regular holiday rate of 200% based on his regular wage rate.

SECTION 5. Overtime pay for holiday work. — For work performed in excess of eight hours on a regular holiday, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on such holiday work plus at least 30% thereof.

Where the regular holiday work exceeding eight hours falls on the scheduled rest day of the employee, he shall be paid an additional compensation for the overtime work equivalent to his regular holiday-rest day for the first 8 hours plus 30% thereof. The regular holiday rest day rate of an employee shall consist of 200% of his regular daily wage rate plus 30% thereof.

SECTION 6. Absences. — (a) All covered employees shall be entitled to the benefit provided herein when they are on leave of absence with pay. 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 he has not worked on such regular holiday.

(b) Employees shall be granted 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 they are not reporting for work while on such benefits.

(c) Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day.

SECTION 7. Temporary or periodic shutdown and temporary cessation of work. — (a) In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with this Rule.

(b) The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor and Employment may not be paid by the employer.

SECTION 8. Holiday pay of certain employees. — (a) Private school teachers, including faculty members of colleges and universities, may not be paid for the regular holidays during semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacation;

(b) Where a covered employee, is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate.

(c) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work.

(d) Workers who have no regular working days shall be entitled to the benefits provided in this Rule.

SECTION 9. Regular holiday falling on rest days or Sundays. — (a) A regular holiday falling on the employee’s rest day shall be compensated accordingly.

(b) Where a regular holiday falls on a Sunday, determine the applicable observance date and its classification under the governing holiday law or proclamation, including R.A. No. 9492 and R.A. No. 9849 where applicable; the following Monday is not automatically a special holiday.

SECTION 10. Successive regular holidays. — Where there are two (2) successive regular holidays, like Holy Thursday and Good Friday, an employee may not be paid for both holidays if he absents himself from work on the day immediately preceding the first holiday, unless he works on the first holiday, in which case he is entitled to his holiday pay on the second holiday.

SECTION 11. Relation to agreements. — Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked holidays as provided in existing individual or collective agreement or employer practice or policy.

• Service charges – Labor Code, art. 96; Omnibus Rules Implementing the Labor Code, Book III, Rule VI, secs. 1-7; R.A. No. 11360; DOLE D.O. No. 206-19; DOLE L.A. No. 14-19

Labor Code, art. 96

Article 96. Service charges. All service charges collected by covered establishments shall be distributed completely and equally among covered employees, except managerial employees. As amended by R.A. No. 11360. Article number retained pending owner verification against the DOLE 2022 crosswalk.

Omnibus Rules Implementing the Labor Code, Book III, Rule VI, secs. 1-7

Service Charges

SECTION 1. Coverage. — This rule shall apply only to establishments collecting service charges such as hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses, and similar enterprises, including those entities operating primarily as private subsidiaries of the Government.

SECTION 2. Employees covered. — This rule shall apply to all employees of covered employers, regardless of their positions, designations or employment status, and irrespective of the method by which their wages are paid except to managerial employees.

As used herein, a “managerial employee” shall mean one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees or to effectively recommend such managerial actions. All employees not falling within this definition shall be considered rank-and-file employees.

SECTION 3. Distribution of service charges. — All service charges collected by covered employers shall be distributed completely and equally among covered employees, except managerial employees. As amended by R.A. No. 11360; see also DOLE D.O. No. 206-19.

SECTION 4. Frequency of distribution. — The shares referred to herein shall be distributed and paid to the employees not less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.

SECTION 5. Integration of service charges. — In case the service charges is abolished the share of covered employees shall be considered integrated in their wages. The basis of the amount to be integrated shall be the average monthly share of each employee for the past twelve (12) months immediately preceding the abolition or withdrawal of such charges.

SECTION 6. Relation to agreements. — Nothing in this Rule shall prevent the employer and his employees from entering into any agreement with terms more favorable to the employees than those provided herein, or be used to diminish any benefit granted to the employees under existing laws, agreement and voluntary employer practice.

SECTION 7. This rule shall be without prejudice to existing, future collective bargaining agreements.

Nothing in this rule shall be construed to justify the reduction or diminution of any benefit being enjoyed by any employee at the time of effectivity of this rule.

[R.A. No. 11360](/6040430be34d4121a60d6f397087d2c6?pvs=25)

DOLE D.O. No. 206-19

DOLE L.A. No. 14-19

• Occupational Safety and Health Standards Law – R.A. No. 11058, secs. 4-6, 8 and 12

R.A. No. 11058, secs. 4-6, 8 and 12

Section 4. Duties of Employers Workers an Other Persons. -

> (a) Every employer, contractor or subcontractor, if any, and any person who manages, controls or supervises the work being undertaken shall:

> (1) Furnish the workers a place of employment free from hazardous conditions that are causing or are likely to cause death, illness or physical harm to the workers;

(2) Give complete job safety instructions or orientation to all the workers especially to those entering the job for the first time, including those relating to familiarization with their work environment;

(3) Inform the workers of the hazards associated with their work health risks involved ot to which they are exposed to, preventive measures to eliminate or minimize the risks, and steps to be taken in cases of emergency;

(4) Use only approved devices and equipment for the workplace;

(5) Comply with OSH standards including training medical examination and where necessary, provision of protective and safety devices such as personal protective equipment (PPE) and machine guards;

(6) Allow workers and their safety and health representatives to participate actively in the process of organizing, planning, implementing and evaluating the safety and health program to improve safety and health in the workplace; and

(7) Provide, where necessary, for measures to deal with emergencies and accidents including first-aid arrangements.

(b) Every worker shall participate in ensuring compliance with OSH standards in the workplace. The worker shall make proper use of all safeguards and safety devices furnished for the worker's protection and that of others, and shall observe instructions to prevent accidents or imminent danger situation in workplace. The worker shall observe the prescribed steps to be taken in cases of emergency.

The worker shall report to the supervisor any work hazard that may be discovered in the workplace.

(c) It shall be the duty of any person, including the builder or contractor who visits, builds, renovates or installs devices or conducts business in any establishment or workplace, to comply with the provisions of this Act and all other regulations issued by the Secretary of Labor and Employment.

(d) Whenever two(2) or more undertakings are engaged in activities simultaneously in one (1) workplace, it shall be the duty of all engaged to collaborate in the application of OSH standards and regulations.

Section 5. Workers' Right to Know. - The right to safety and health at work shall be guaranteed. All workers shall be appropriately informed by the employer about all types of hazards in the workplace, provided access to training and education on chemical safety, electrical safety mechanical safety, and ergonomical safety.

Section 6. Workers' Right to Refuse Unsafe Work. The worker has the right of refusal to work without threat or reprisal from the employer if, as determined by the DOLE, an imminent danger situation exists in the workplace that may result in illness, injury or death, and corrective actions to eliminate the danger have not been undertaken by the employer.

Section 8. Workers' Right to Personal Protective Equipment (PPE). - Every employer, contractor or subcontructor, if any, shall provide his workers, free of charge, protective equipment for their eyes, face, hands and feet, and free, and lifeline, safety belt or harness, gas or dust respirators or masks, protective shields whenever necessary by reason of the hazardous work process or environment, chemical, radiological, mechanical and other irritants or hazards capable of causing injury or impairment in the function of any part of the body through absorption, inhalation or physical contact. The cost of the PPE shall be part of the safety and health program which is a separate pay item pursuant to Section 20 of this Act.

All PPE shall be of the appropriate type as tested and approved by the DOLE based on its standards. The usage of PPE in all establishments, projects, sites and all other places where work is being undertaken shall be based on the evaluation and recommendation of the safety officer.

Section 12. Occupational Safety Health (OSH) Program. - Covered workplaces shall have a safety and health program including the following policies, guidelines or information:

> (a) Statement of commitment to comply with OSH requirements;

(b) General safety and health, including a drug-free workplace;

(c) Human Immunodeficiency Virus (HIV) and Acquired Immune Deficiency Syndrome (AIDS)/tuberculosis/hepatitis prevention control;

(d) Company or project details;

(e) Composition and duties of the safety and health committee;

(f) Occupational Safety and health personnel and facilities;

(g) Safety and health promotion, training and education;

(h) Conduct of toolbox meetings;

(i) Accident/incident/illness investigation, recording and reporting;

(j) Provision and use of PPE;

(k) Provision of safety signage;

(l) Dust control and management, and regulations on activities such as building of temporary structures, and lifting and operation of electrical, mechanical, communications systems and other equipment;

(m) Provision of workers' welfare facilities;

(n) Emergency preparedness and response plan;

(o) Waste management system; and

Right to Holiday Pay

Holiday pay refers to the payment of the regular daily wage for any unworked regular holiday. (Handbook on Workers’ Statutory Monetary Benefits, Bureau of Working Conditions, p. 12, 2016)

Special Days

• Ninoy Aquino Day – August 21
• All Saints’ Day – Nov. 1
• Last Day of the Year – Dec. 31
• Special Non-Working Days
• Special Public Holidays
• Special National Holiday

Holiday Pay

Holiday pay is a one-day pay given by law to an employee, even if he does not work on a regular holiday. This gift of a day’s pay is limited to each of the 12 regular holidays.

Note: Art. 94 (c), was superseded by E.O. 203, which was subsequently amended by RA 9177, 9256, 9492, and 9849. The current state of the law is discussed below.

Successive Regular Holidays

Where there are 2 successive regular holidays, like Holy Thursday and Good Friday, an employee may not be paid for both holidays if he is absent without pay on the workday immediately preceding the first holiday, unless he works on the first holiday, in which case he is entitled to his holiday pay on the second holiday.

Muslim Holidays

General Rule: Muslim holidays are observed only in specified areas

• Amun Jadid (New Year)
• Maulid un-Nabi (Birthday of the Prophet Muhammad)
• Lailatul Isra Wal Miraj (Nocturnal Journey and the Ascencion of the Prophet Muhammad)

Exception: Eid al Fit’r and Eid ul Adha (Celebrated nationwide)

Muslim employees working outside of the specified areas shall be excused from reporting for work during the observance of the Muslim holidays as recognized by law, without diminution of salary or wages during the period.

Considering that all private corporations, offices, agencies, and entities or establishments operation within the designated Muslim provinces and cities are required to observe Muslim holidays, both Muslims and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim Holidays. (SMC v. CA, G.R. No. 146775, January 30, 2002).

Double Holiday

• If unworked – employee entitled to 200% of basic wage, provided he was present or on leave with pay on the preceding work day
• If worked – employee entitled to 300% of basic wage. For an unworked regular holiday, an employee is entitled to holiday pay if present or on paid leave on the workday immediately preceding it, subject to the rules on absences and successive holidays. Work on the following day is not required. A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation pay but will not entitle the employee to another vacation leave. (Asian Transmission v. CA, GR No. 144664, March 15, 2004)

Holiday-Sunday

A legal holiday falling on a Sunday creates no legal obligation for the employer to pay extra, aside from the usual holiday pay, to its monthly-paid employees.

Successive Regular Holidays

Where there are 2 successive regular holidays, like Holy Thursday and Good Friday, an employee may not be paid for both holidays if he is absent without pay on the workday immediately preceding the first holiday, unless he works on the first holiday, in which case he is entitled to his holiday pay on the second holiday.

Double Holiday

If unworked – employee entitled to 200% of basic wage, provided he was present or on leave with pay on the preceding work day

If worked – employee entitled to 300% of basic wage. For an unworked regular holiday, an employee who was present or on paid leave on the workday immediately preceding it is entitled to holiday pay, subject to the rules on absences and successive holidays; work on the following day is not required. A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation pay but will not entitle the employee to another vacation leave. (Asian Transmission v. CA, GR No. 144664, March 15, 2004)

In cases temporary cessation of work

Regular holidays falling within this period are compensable (i.e. yearly inventory, repair or cleaning of machineries or equipment, etc).

However, in the case of a regular holiday during the cessation of operations due to business reverses as authorized by the Secretary of Labor, the employer may not pay the regular holidays during this period.

In cases of periodic and temporary closures, the Omnibus Rules Implementing the Labor Code Book 3 Rule IV Section 7 provides that in cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair of cleaning machines and equipment is undertaken, the regular holidays falling within the period shall be compensated.

Holiday-Sunday

A legal holiday falling on a Sunday creates no legal obligation for the employer to pay extra, aside from the usual holiday pay, to its monthly-paid employees.

In cases temporary cessation of work

Regular holidays falling within this period are compensable (i.e. yearly inventory, repair or cleaning of machineries or equipment, etc).

However, in the case of a regular holiday during the cessation of operations due to business reverses as authorized by the Secretary of Labor, the employer may not pay the regular holidays during this period.

In cases of periodic and temporary closures, the Omnibus Rules Implementing the Labor Code Book 3 Rule IV Section 7 provides that in cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair of cleaning machines and equipment is undertaken, the regular holidays falling within the period shall be compensated.

Holiday Pay of Certain Employees:

• Private School teachers including faculty members of college and universities – may not be paid for the regular holidays during semestral vacations. Paid for the regular holidays during Christmas vacation (Jose Rizal College v. NLRC & NATOW, G.R. No. L-65428, 1987)
• Employee paid by results (payment on piecework) – holiday pay shall not be less than his average daily earnings for the last 7 actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate
• Seafarers – any hours of work or duty including hours of watch keeping performed on designated rest days and holidays shall be compensated at the applicable rest-day or holiday rate
• Seasonal workers – may not be paid the required holiday pay during off-season when they are not at work
• Workers without regular working days – entitled to the benefits, under item d, Section 8, Rule IV of the Omnibus Rules Implementing the Labor Code.

Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. Its purpose is not merely “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.” (RFM Corporation v. Kasapian, GR No. 162324, 2009)

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. 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.” (Wellington v. Trajano, GR No. 114698, 1995)

Divisors

The divisor assumes an important role in determining whether or not holiday pay is already included in the monthly paid employee’s salary and in the computation of his daily rate. (Union of Filipro Empl. V. Vivar, Jr., G.R. No. 79255, 1992)

The divisor used in arriving at an employee’s daily rate for the purpose of computing salary-related benefits is 261. From the 365 days in a year, we deduct 104 rest days which gives a total of 261 days. Now, if 261 days is the number of working days of the employees then, there is a disputable presumption that the employees are paid their holiday pay. (Producer’s Bank v. NLRC, G.R. No.100701, 2001)

In Chartered Bank, the 251 working days divisor reflected the ten (10) legal holidays applicable to that historical computation; it is not a universal current divisor. Determine the appropriate divisor from the applicable holidays, work schedule, and days covered by the employee’s pay. If the employees are already paid for all non-working days, the divisor should be 365 and not 251. (Chartered Bank v. Ople, GR No. L-44717, 1985)

Outline of Rules on Payment of Holiday Pay

Service Charge [Article 96 of the Labor Code, as amended by RA 11360]

Definition:

Service charges are considered part of the cost of the food, goods, or services ordered by the customers.

Holiday Pay of Certain Employees:

Private School teachers including faculty members of college and universities – may not be paid for the regular holidays during semestral vacations. Paid for the regular holidays during Christmas vacation (Jose Rizal College v. NLRC & NATOW, G.R. No. L-65428, 1987)

Employee paid by results (payment on piecework) – holiday pay shall not be less than his average daily earnings for the last 7 actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate

Seafarers – hours of work or duty, including watchkeeping, performed on a designated rest day or holiday shall be compensated at the applicable rest-day or holiday rate, subject to the governing seafarer contract

Seasonal workers – may not be paid the required holiday pay during off-season when they are not at work

Workers without regular working days – entitled to the benefits, under item d, Section 8, Rule IV of the Omnibus Rules Implementing the Labor Code.

Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. Its purpose is not merely “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.” (RFM Corporation v. Kasapian, GR No. 162324, 2009)

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. 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.” (Wellington v. Trajano, GR No. 114698, 1995)

Divisors

The divisor assumes an important role in determining whether or not holiday pay is already included in the monthly paid employee’s salary and in the computation of his daily rate. (Union of Filipro Empl. V. Vivar, Jr., G.R. No. 79255, 1992)

A 261-day divisor may apply when the annual salary covers 261 days, including regular holidays but excluding 104 unpaid rest days; the applicable divisor depends on the employee’s actual pay arrangement. From the 365 days in a year, we deduct 104 rest days which gives a total of 261 days. Now, if 261 days is the number of working days of the employees then, there is a disputable presumption that the employees are paid their holiday pay. (Producer’s Bank v. NLRC, G.R. No.100701, 2001)

In Chartered Bank, the historical 251 working days divisor resulted from subtracting all Saturdays, Sundays and the ten (10) legal holidays then used in the calculation from the total number of calendar days in a year; it should not be applied automatically under the current holiday calendar. If the employees are already paid for all non-working days, the divisor should be 365 and not 251. (Chartered Bank v. Ople, GR No. L-44717, 1985)

Outline of Rules on Payment of Holiday Pay