This document defines holiday pay and premium pay under Philippine labor law. It provides that holiday pay is a one-day pay given to employees for regular holidays even if they do not work. Premium pay refers to additional compensation for work performed on non-working days like rest days and holidays. The document outlines the regular and special holidays, payment rules for different types of holidays, coverage of holiday pay laws, and formulas for computing wages on holidays. It also addresses absences and provides an example question and answer about an employee's entitlement to holiday pay.

1. HOLIDAY &
PREMIUM PAY
LABOR LAW 1 // Sunday 1-4 PM
Atty. Carlisle Marie Fabie
 Prepared by: Airess C. Casimero

2. DEFINITION
Holiday Pay is a one-day pay given by law to an employee even
if he does not work on a regular holiday(1 Azucena, 2016).
It is a premium given to employees pursuant to the law even if he has
not been suffered to work on a regular holiday. It is limited to the 12
regular/legal holidays.
Condition: The employee should not have been absent without pay on
the working day proceeding the regular holiday.

3.  RATIONALE
The purpose of a holiday pay is to secure the payment of
undiminished monthly income undisturbed by any work
interruption. In other words, although the worker is forced
to take a rest, he earns what he should earn, that is, his
holiday pay (JRC v. NLRC, G.R. No. 65482, 1 Dec. 1987).
Holiday pay is primarily aimed at benefiting the daily-paid
workers whose income is circumscribed by the principle of
"no-work, no pay." Prior to the enactment of the Labor Code,
daily paid workers were not paid for unworked regular
holidays. On the other hand, monthly-paid employees do not
suffer any reductions in pay for not working during such
holidays. The law on holiday pay is thus conceived to be the
countervailing measure to partially offset the disadvantages
inherent in the daily compensation system of employment
(Poquiz, 2012).

4.  Coverage
GR: All employees are entitled to and covered by the law on
holiday pay.
Exceptions:
1. Government employees and any of its political subdivisions,
including GOCCs (with original charter);
2. Retail and service establishments regularly employing less than
10 workers;
3. Domestic helpers or Kasambahays and persons in the personal
service of another;
4. Employee engaged on task or contract basis or purely commission
basis;
5. Members of the Family of the Employer who are dependent on
him for support;
6. Managerial Employee and other members of the managerial staff;
7. Field personnel and other Employee whose time and performance
are unsupervised by the Employer; and
8. Employee paid fixed amount for performing work irrespective of
the time consumed in the performance thereof
Source: IRR, Book III, Rule IV, Sec.1

5.  What are REGULAR and SPECIAL HOLIDAYS?
A. Regular Holidays B. Special (Non-Working) Holidays
Source: Proclamation No. 845, s. 2019 (Holidays for 2020)
NOTE: Not included in enumeration are (1) Eid’l Fitr and (2) Eidul Adha. Their proclamations
are issued after the approximate dates of the Islamic holidays have been determined in
accordance with the Islamic calendar.
New Year’s Day January 1
Araw ng Kagitingan April 9
Maundy Thursday April 9, 2020
Good Friday April 10, 2020
Labor Day May 1
Independence Day June 12
National Heroes Day August 31, 2020
Bonifacio Day November 30
Christmas Day December 25
Rizal Day December 30
Chinese New Year January 25,
2020
EDSA People Power Anniv. February 25
Black Saturday April 11, 2020
Ninoy Aquino Day August 21
All Saints’ Day November 1
Additional special (All Soul’s Day) November 2
Feast of Immaculate Conception of
Mary
December 8
Additional special non-working day December 24
Last Day of the Year December 31

6.  Payment
For REGULAR HOLIDAYS
- GUARANTEED with PAY whether worked or unworked.
For SPECIAL Non-Working HOLIDAYS
- ‘NO WORK, NO PAY” applies; if workers do not work on special
(non-working) days, they do not receive any wages for those days
Regular Holiday Special Non-working
Holiday
If unworked Compensable Not compensable
If worked Rate is 200% of regular rate Additional 30% premium
pay of 100% daily wage
Limited to the 12 holidays provided in
the Labor Code
Not exclusive; law or
ordinance may provide for
other special holidays

7.  Premium pay
refers to the additional compensation required by law to be paid for work performed
within the regular eight (8) normal working hours on non-working days, such as rest
days, regular and special holidays.
Employer and Employeee Can Agree On The Rate Of Premium Pay
Other Than That Provided By Law
Nothing shall prevent the employer and his employee or their
representatives from entering into any agreement with terms more
favorable to the employees; Provided, it shall not be used to diminish
any benefit granted to the employees under existing laws,
agreements and voluntary employer practices.
Source: IRR, Book III, Rule III, Sec. 9

8.  Formula to Compute Wage on Holidays (M.C. No. 10, Series of 2004)
For REGULAR
HOLIDAY
Compensation Computation
If it is employee’s regular
workday
a. Unworked 100% (Daily rate + Cost of Living
Allowance) x 100%
b. Worked
1st 8 hours 200% (Daily rate + COLA) x 200%
Excess of 8 hours 200%, plus 30% of
hourly rate on said day
Hourly rate of the basic daily wage x
200% x 130% x no. of hours worked

9.  Formula to Compute Wage on Holidays (M.C. No. 10, Series of 2004)
For REGULAR
HOLIDAY
Compensation Computation
If it is employee’s rest
day
a. Unworked 100% (Daily rate + Cost of Living Allowance)
x 100%
b. Worked
1st 8 hours 200%, plus 30% of 200% (Daily rate + COLA) x 200%] + (30%
[Daily rate x 200%)]
Excess of 8 hours 230%, plus 30% of
hourly rate on said day
(Hourly rate of the basic daily wage x
200% x 130% x 130% x number of
hours worked)

10.  Formula to Compute Wage on Holidays (M.C. No. 10, Series of 2004)
For SPECIAL HOLIDAY Compensation Computation
If it is employee’s regular
workday
a. Unworked 0% unless there is a
favourable company
policy, practice or CBA
granting payment
b. Worked
1st 8 hours 130% [(Daily rate x 130%) + COLA)
Excess of 8 hours plus 30 % hourly rate on
said day
(Hourly rate of the basic daily wage x
130% x 130% x number of hours
worked)

11.  Formula to Compute Wage on Holidays (M.C. No. 10, Series of 2004)
For SPECIAL HOLIDAY Compensation Computation
If it is employee’s rest
day
a. Unworked 0% unless there is a
favourable company
policy, practice or CBA
granting payment
b. Worked
1st 8 hours 150% [(Daily rate x 150%) + COLA)
Excess of 8 hours plus 30 % hourly rate on
said day
(Hourly rate of the basic daily wage x
150% x 130% x number of hours
worked)

12. Effects of ABSENCES in the computation
Absence Effect
1. on leave of absence with pay entitled to holiday pay
2. on leave of absence without pay on the
day immediately preceding the regular
holiday
may not be paid the required holiday pay if they
have not worked on such regular holiday
3. on leave while on SSS or employee’s
compensation benefits
Employers should grant 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
4. When day preceding regular holiday
is a non-working day or scheduled rest
day
entitled to the regular holiday pay if they
worked on the day immediately preceding the
non- working day or rest day

13. Question:
Jose applied with Mercury Drug Company for the position
of Sales Clerk. Mercury Drug Company maintains a chain
of drug stores that are open every day until late at night.
Jose was informed that he had to work on Sundays and
holidays at night as part of the regular course of
employment. He was presented with a contract of
employment setting forth his compensation on an annual
basis with an express waiver of extra compensation for
work on Sundays and holidays, which Jose signed. Is such
a waiver binding on Jose?
Answer:
NO. The waiver is not binding on Jose. Rights may be
waived, except when it is contrary to law, public order,
public policy, morals and customs. Here, the waiver for
holiday and premium compensation is against the labor
laws. Hence, the waiver in this case is void.

14. Question:
Jose went to work for 8 hours last April 9, 2020. The said date is declared as Araw
ng Kagitingan and Maundy Thursday, both regular holidays in the Philippine
calendar. (a) Compute for Jose’s pay for this double holiday. (b) Is the employer
compelled to pay Jose? (c) Jose was not able to work because the company was not
operational due to Enhanced Community Quarantine (ECQ), is the company
exempted to pay for the holiday compensation?
Answer:
a. According to Labor Advisory No. 13 s. 2020, Jose shall be paid 300% of his daily
rate for April 9, 2020, a double holiday.
b. No, employers are allowed to defer holiday pay on April 9, 2020 due to national
emergency situation until normal operations of their establishments resume.
c. Yes, establishments that have closed or ceased operation during the ECQ are
EXEMPTED from providing holiday pay.

15. Thank you
END
CASIMERO, Airess C.