D – Holiday Pay
▪ Holiday pay is a 100% additional pay during a regular holiday.
▪ If no work is done on a holiday, the employee receives his daily wage.
▪ If there is work done, he receives his holiday pay plus his day’s wage.
▪ If there is work done on a double holiday, he receives two (2) holiday pays due to the double holiday, plus his day’s wage.
▪ There are rules on absences without pay immediately preceding a regular holiday pay.
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.” It is also intended to enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural significance. (Asian Transmission Corporation v. CA, G.R. No. 144664, 15 March 2004)
Thus, holiday pay is a legally mandated benefit required to be paid by the employer to the employee on regular holidays, whether or not the said employee worked. The amount of holiday pay will depend on whether the employee performed work or not as explained below.
2. Regular holidays
There are currently thirteen (13) regular holidays in the Philippines.
Regular holidays are different and should not be confused with special non-working days which require payment of premium pay if work is done, instead of holiday pay.
For more information, see: Premium Pay.
a. 13 Regular Holidays
These are the thirteen (13) regular holidays:
1) January 1 – New Year’s Day
2) Maundy Thursday (movable date)
3) Good Friday (movable date)
4) April 9 – Araw ng Kagitingan
5) May 1 – Labor Day
6) June 12 – Independence Day
7) National Heroes’ Day – Last Monday of August
8) Eid’l Fitr (movable date)
9) Eid’l Adha (movable date)
10) Bonifacio Day – November 30
11) Christmas Day – December 25
12) Rizal Day – December 30
13) General election (movable date)
(Article 94[c], Labor Code; Section 3, Rule IV, Book III, Omnibus Rules Implementing the Labor Code; DOLE-BWC Handbook on Workers’ Statutory Monetary Benefits, hereinafter “DOLE Handbook”)
Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while the religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family. (Asian Transmission Corporation v. CA, supra.)
The day designated by law for holding a general election is a legal holiday. (Article 94[b], Labor Code)
c. Double holiday
A double holiday happens when there are two holidays in one day.
For example, since Maundy Thursday is movable, there are occasions when it falls on Araw ng Kagitingan resulting in two holidays on the same day or a double holiday.
Since a worker is entitled to the enjoyment of  paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the  holiday pay benefits a worker is entitled to receive. (Asian Transmission Corporation v. CA, supra.)
There is nothing in the law which provides or indicates that the entitlement to  days of holiday pay shall be reduced to nine when two holidays fall on the same day. (Ibid.)
3. Covered and excluded employees
The benefit applies to all employees (called the “covered employees”), except these “exempt employees”:
1. 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;
2. Those of retail and service establishments regularly employing not more than five (5) workers;
3. Kasambahay and persons in the personal service of another;
4. 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.
5. 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;
6. 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.
Employees who are not excluded are referred to as “covered employees.” (DOLE Handbook; Rule IV, Book III, Omnibus Rules Implementing the Labor Code)
a. Managerial employees
As shown earlier, managerial employees are included in the list of exempt employees.
Grand Asian Shipping Lines, Inc. v. Galvez
G.R. No. 178184, 29 January 2014
1) Galvez and Gruta, as managerial employees, are not entitled to their claims for holiday pay, service incentive leave pay and premium pay for holiday and restday. Article 82 of the Labor Code specifically excludes managerial employees from the coverage of the law regarding conditions of employment which include hours of work, weekly rest periods, holidays, service incentive leaves and service charges.
In addition, officers or members of a managerial staff are also exempt from the coverage of holiday pay.
It should be emphasized that managerial employees, as well as officers or members of a managerial staff, have requirements as provided to be so-called as such. Meaning, the designation or title given to employee is not determinative of whether or not the employee is indeed a manager. To avoid paying holiday pay, some employers give employees the designation or title of “manager” or “officers or members of a managerial staff” even if they are actually not performing the duties and functions of a manager. This is not correct and may result in employee claims for holiday pay against the employer.
b. Field personnel
1) The phrase “those who are engaged on task or contract basis”
The phrase “those who are engaged on task or contract basis” should be related with “field personnel” applying the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they follow. (Cebu Institute of Technology v. Ople, G.R. No. L- 58870, 18 December 1987)
The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of SIL [service incentive leave] and holiday pay. They are exempted from the coverage of Title I (including the holiday and SIL pay) only if they qualify as “field personnel.” The IRR therefore validly qualifies and limits the general exclusion of “workers paid by results” found in Article 82 from the coverage of holiday and SIL pay. (David v. Macasio, G.R. No. 1954466, 02 July 2014)
In short, in determining whether workers engaged on “pakyaw” or “task basis” is entitled to holiday and SIL pay, the presence (or absence) of employer supervision as regards the worker’s time and performance is the key: if the worker is simply engaged on pakyaw or task basis, then the general rule is that he is entitled to a holiday pay and SIL pay unless exempted from the exceptions specifically provided under Article 94 (holiday pay) and Article 95 (SIL pay) of the Labor Code. However, if the worker engaged on pakyaw or task basis also falls within the meaning of “field personnel” under the law, then he is not entitled to these monetary benefits. (Ibid.)
Workers engaged on pakyaw or “task basis” are entitled to holiday and service incentive leave pay (SIL) provided they are not field personnel. (A. Nate Casket Maker v. Arango, G.R. No. 192282, 05 October 2016)
c. Special groups of employees
Holiday pay rules are different for certain special groups of employees as illustrated below.
1) Piece-rate workers
They are entitled to holiday pay which shall not be less than his/her average daily earnings for the last seven (7) actual days of work immediately preceding the regular holiday. The holiday pay should not be less than the applicable statutory minimum wage rate. (DOLE Handbook; Rule IV, Book III, Omnibus Rules Implementing the Labor Code)
2) Seasonal workers
They are not entitled to holiday pay for regular holidays during off-season. (Ibid.)
3) Workers without regular workdays
They are entitled to holiday pay. Workers without regular holidays include stevedores. (Ibid.)
d. Whether monthly-paid or daily-paid
As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of  paid regular holidays. The provision is mandatory, regardless of whether an employee is paid on a monthly or daily basis. Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit demandable under the law. (Asian Transmission Corporation v. CA, supra.)
Hence, for purposes of holiday pay entitlement, it does not matter whether an employee is monthly-paid or daily-paid.
4. The benefit
a. No work on a holiday: 100% holiday pay
Every worker shall be paid his regular daily wage during regular holidays. (Article 94[a], Labor Code; Section 3, Rule IV, Book III, Omnibus Rules Implementing the Labor Code)
Holiday pay is an additional pay of 100% of the basic wage of a covered employee on a regular holiday even if that employee does not work. (DOLE Handbook)
Pigcaulan v. Security and Credit Investigation, Inc.
G.R. No. 173648, 16 January 2012
Under the Labor Code, Pigcaulan [a covered employee] is entitled to his regular rate on holidays even if he does not work.
To reiterate, holiday entitlement depends on whether an employee is covered.
b. Work on a holiday: 100% holiday pay + day’s wage
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. (Article 94[b], Labor Code)
If the covered employee renders work on a regular holiday, he/she receives his holiday pay (100% of basic wage) plus his day’s wage. The day’s wage is subject to his actual hours of work rendered on that day. If he/she only renders work for six (6) hours, then he/she is entitled only to pay for the equivalent of the time worked.
Producer’s Bank of the Philippines v. NLRC
G.R. No. 100701, 28 March 2001
Article 94 of the Labor Code provides that every worker shall be paid his regular daily wage during regular holidays and that 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 [i.e. 100% holiday pay + day’s wage].
This should be cross-referenced below work crossing a regular holiday. Meaning, work started a day before the holiday and then crossed over to the holiday. This usually happens when work started in the evening of a non-holiday and goes past midnight into the day of the holiday.
c. Work on a double holiday: 200% holiday pay + day’s wage
If the covered employee renders work on a double holiday, he/she receives his two holiday pays (200% of basic wage), plus his day’s wage.
As discussed earlier, since it is a legally mandated benefit, payment of holiday pay is due whenever there is a holiday regardless if it falls on the same day. This is because there is no law prohibiting double payment.
These are the different ways to compute depending on the applicable circumstances. For easy illustration, the assumption here is that the daily wage is at Php1,000.00.
Computation 1: If there is no work on a regular holiday, a covered employee is entitled to a holiday pay of 100% daily wage.
100% holiday pay + day’s wage = day’s wage with holiday pay
Example: Php1,000.00 + Php0.00 (since no work is done) = Php1,000.00
Computation 2: If there is work performed on a regular holiday, a covered employee is entitled to a holiday pay of 100% daily wage plus his wage for that day. (If the covered employee is compensable for his entire day’s work, he is entitled to 100% of his day’s wage. If he is tardy or late, then he is entitled to his corresponding pay for the day.)
100% holiday pay + day’s wage = day’s wage with holiday pay
Example: Php1,000.00 + Php1,000.00 = Php2,000.00
Computation 3: If there is no work performed on a double holiday, a covered employee is entitled to a holiday pay of 200% daily wage.
200% holiday pay (for holiday 1 and holiday 2) + 1 day’s wage = day’s wage with holiday pay
Example: Php2,000.00 (since it is a double holiday) + Php0.00 (since no work is done) = Php3,000.00
Computation 4: If there is work performed on a double holiday, a covered employee is entitled to a holiday pay of 200% daily wage plus his wage for that day.
200% holiday pay (for holiday 1 and holiday 2) + 1 day’s wage = day’s wage with holiday day
Example: Php2,000.00 (since it is a double holiday) + Php1,000.00 = Php3,000.00
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 Employees v. Vivar, En Banc, G.R. No. 79255, 20 January 1992)
Chartered Bank Employees Association v. Ople, En Banc
G.R. No. L-44717, 28 August 1985
Chartered Bank, in computing overtime compensation for its employees, employs a “divisor” of 251 days. The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) [now 13] legal holidays form the total number of calendar days in a year. If the employees are already paid for all non-working days, the divisor should be 365 and not 251.
Producers Bank of the Philippines v. NLRC
G.R. No. 100701, 28 March 2001
The divisor of 314 is arrived at by subtracting all Sundays from the total number of calendar days in a year, since Saturdays are considered paid rest days, as stated in the inter-office memorandum. Thus, the use of 314 as a divisor leads to the inevitable conclusion that the ten legal holidays are already included therein.
Leyte IV Electric Cooperative, Inc. v. LEYECO IV Employees Union-ALU
G.R. No. 157775, 19 October 2007
The use of a divisor that was less than 365 days cannot make the employer automatically liable for underpayment of holiday pay. In said case, the employees were required to work only from Monday to Friday and half of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days meant that the employees were deprived of their holiday pay for some or all of the ten [now 13] legal holidays. The 304-day divisor used by the employer was clearly above the minimum of 287 days. The use of a divisor that was less than 365 days cannot make the employer automatically liable for underpayment of holiday pay. In said case, the employees were required to work only from Monday to Friday and half of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days meant that the employees were deprived of their holiday pay for some or all of the ten legal holidays. The 304-day divisor used by the employer was clearly above the minimum of 287 days.
The divisor is not relevant for daily-paid employees.
6. Rules on absences
If an absent employee is paid the workday immediately preceding a regular holiday, then he/she is entitled to holiday pay. (DOLE Handbook; Rule IV, Book III, Omnibus Rules Implementing the Labor Code)
a. Absence a day immediately preceding a regular holiday
Conversely, if an absent employee is not paid the workday immediately preceding a regular holiday, he/she is not entitled to holiday pay. (Ibid.)
An absent employee is paid if he applied his leave credits for the day’s absence and the same was approved by the management. If there is no applied leave credit, an absent employee is not paid. (Ibid.)
b. Absence during successive regular holidays
The same rule on absences applies for successive regular holidays or two/more holidays lining up after another (e.g. Maundy Thursday and Good Friday). (Ibid.)
If an absent employee is paid the workday immediately preceding a regular holiday, then he/she is entitled to holiday pay for the regular holidays. (Ibid.)
Conversely, if an absent employee is not paid the workday immediately preceding a regular holiday, he/she is not entitled to holiday pay for the successive regular holidays. (Ibid.)
If present on the first holiday: However, if an absent employee is not paid the workday immediately preceding a regular holiday, but performs work on the first regular holiday, then he/she is entitled to the holiday pay for the next holiday/s without having to work. The rules on absences will apply for the next successive holidays after the first regular holiday when he worked. (Ibid.)
7. Work crossing a holiday
For any work starting on a regular workday (e.g. April 30 at 11:00 pm; 1-hour) and crossing on a regular holiday (May 1 – Labor Day, from 12:01 am on a holiday; 7 hours), holiday pay is due on the specific workhours falling on the regular holiday (e.g. 7 hours).
Note that the Labor Code expressly provides that 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.” (Article 94[b], Ibid.)
The regular rate will depend on his actual number of hours.
Further, it is incorrect for some employers to think that no holiday pay is due in this situation because work started a day before the regular holiday. Remember, holiday pay is mandatory for covered employees. (Asian Transmission Corporation v. CA, supra.). As such, there has to be an express provision of law that would deny any employee from the entitlement of holiday pay (e.g. being exempted). For example, there is the rule on absences. However, there is no such rule for work crossing-over a holiday. That being the case, holiday pay is due.
8. Work suspension or temporary/periodic shutdown
“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 the Rules Implementing the Labor Code, as amended.” (DOLE Handbook)
What is referred to herein is the temporary work suspension (TWS), wherein an employer may temporarily suspend work on the establishment for a legitimate business reason and the work suspension should not exceed six (6) months.
9. Burden of proof: on employer
In claims for payment of salary differential, service incentive leave, holiday pay and 13th month pay, the burden rests on the employer to prove payment. (Minsola v. New City Builders, Inc., G.R. No. 207613, 31 January 2018)
This stems from the fact that all pertinent personnel files, payrolls, records, remittances and other similar documents – which will show that the differentials, service incentive leave and other claims of workers have been paid – are not in the possession of the worker but are in the custody and control of the employer. (Ibid.)
Minsola v. New City Builders, Inc.
G.R. No. 207613, 31 January 2018
Minsola is entitled to a holiday pay of Php 5,340.00 for two unworked legal holidays in December 2008, 11 unworked legal holidays in 2009 and one legal holiday in January 2010, as New City failed to present the payrolls that would show that Minsola’s salary was inclusive of holiday pay. (Ibid.)
As shown in the above case, it is fatal on the part of the employer if it fails to show proof of payment of the holiday pay as the burden of proof rests on the employer. The employee simply needs to allege that he/she is no paid. Once the same is made, it becomes the responsibility of the employer to prove the contrary. Otherwise, the employer may be required to holiday pay to the employee (even if, in fact, holiday pay was already paid due to this technicality).
In this time of the pandemic, should the employer implement a temporary work suspension or be required to close due to a lockdown measure, holiday pay is still due to the employees even if no work is done. This is what it means when the law says it is mandatory or legally mandated. As discussed above, only another provision of law (e.g. rules on absences) can invalidate the existing rule on holiday pay. (See: Asian Transmission Corporation v. CA, supra.)
11. Employment contract, company policies, CBA
The above discussion may be superseded by any stipulation favorable to the employee via an employment contract, company policies, collective bargaining agreement, or analogous thereto.
12. When in doubt, interpretation favors labor
Article 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. For the working man’s welfare should be the primordial and paramount consideration. (Asian Transmission Corporation v. CA, supra.)
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