The legal basis about holiday pay.
There are ten regular holidays and several special holidays in the Philippines. There are companies which do not require their employees to report during these days, but there are some, mostly in Business Process Outsourcing and Customer Service industries, which require their employees to work in order for their business to be sustained. In spite of the law that protects the workers in being abused, there are still companies that do not abide. It is better for you to be aware of the rules about the payment of holidays.
As also being published on laborlaw.ph, here’s what you need to know. It is mandatory for employers to pay their workers with the right amount, as per Article 94 of the Labor Code. The Department of Labor and Employment (DOLE) released Labor Advisory No. 09-14 to prompt the companies to abide the law in terms of paying their employees during holidays (regular). These are the rules:
- If the employee did not report, the company must be paid with the full amount equivalent to his daily salary (Daily rate + COLA) times 100%).
- If the employee reported to work, he must be paid his daily salary times two (200%), (Daily rate + COLA) times 200%).
- If the employee rendered overtime, here is the formula: (Hourly Rate of the Basic Daily Wage x 200% x 130% x number of hours worked).
- If the employee is obliged to work on a regular holiday which happens to be his rest day as well, here is the computation: [(Daily Rate + COLA) x 200%] + [30% (Daily Rate x 200%)]. If the employee renders overtime during this instance, here is the formula: (Hourly Rate of the Basic Daily Wage x 200% x 130% x 130% x number of hours worked).
According to Paragraph 1, Article 102, the companies cannot convert the holiday pay to other forms of benefits, but just cash, if the employee reported for work on that day. The employer cannot pay in the form of promissory notes, vouchers, coupons, tokens, tickets, chits, or any other forms, beside cash, even if the employee wishes to.
All employees such as in the government, managers, officers and members of the managerial staff, filed personnel, domestic helpers, people working in the personal service of others, and workers who are paid by results as per the DOLE Secretary, are not entitled with holiday pay.
Companies who are not able to obey the law may face administrative, civil and/or criminal charges. DOLE may charge the entity with necessary fines as for the administrative liability. For civil charges, it may result into a labor complaint that might oblige the employer (or the company) to pay the employee with the holiday pay, and/or moral and exemplary damages and even attorney’s fees. Finally for the criminal aspect, proper court might charge the company with penalties such as (if proven guilty): a fine amounting to at least P1, 000 up to P10, 000; imprisonment of at least 3 months up to 3 years; or both fine and imprisonment.