Holiday pay exemptions

Dear PAO,

I am a new business owner with a staff of four. My questions are: 1) Am I exempted from paying holiday pay since my business is a service establishment? 2) If I am not exempted, how much will I pay to my employees during regular holidays? 3) What are the regular holidays in the Philippines ? 4) What is the no work, no pay policy?

Ciara

Dear Ciara,

The Labor Code of the Philippines ensures the right of employees to holiday pay. Holiday pay is a day’s pay given to an employee even if he does not work on a regular holiday. The following are the regular holidays in the Philippines:

1. New Year’s Day – January 1
2. Maundy Thursday – Movable Date
3. Good Friday – Movable Date
4. Araw ng Kagitingan – April 9
5. Labor Day – May 1
6. Independence Day – June 23
7. National Heroes Day – Last Sunday of August
8. Bonifacio Day – November 30
9. Eidul Fitur – Movable Date
10. Christmas Day – December 25
11. Rizal Day – December 30

However, not all employees are entitled to holiday pay. Article 94 of the Labor Code of the Philippines explicitly excludes workers in retail and service establishments that are regularly employing less than ten workers from the coverage of the holiday pay. Since your business is a service establishment and you are employing only four people, you are not required by law to give holiday pay to your employees. You may go to the Department of Labor and Employment nearest to the place of your business to obtain a certification stating that you are exempted from paying holiday pay to your employees. Since you are exempted from paying holiday pay, we find it unnecessary to answer your question on how much you will pay your employees during regular holidays.

As to your last question, under the no work, no pay policy, an employee will not be paid his wage for the day or days that he did not come to work. However, if the employee is able, willing and ready to work but prevented by the management or illegally locked out, suspended or dismissed, such employee will be entitled to his fair day’s wage for the day that he is prevented to go to work.

As a new business entrepreneur, you are encouraged to personally visit a lawyer for legal guidance to avoid any violation of the Labor Code.

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