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DOLE promulgates pay rules for holidays in 2018

During the long Christmas and New Year holidays, some businesses operated on regular holidays resulting in work being rendered by their employees. Although the law expressly requires that holiday pay should be paid, businesses looking to save tend to pay their employees through other benefits instead of the statutory monetary benefit.

Article 94 of the Labor Code mandates the payment of a holiday pay.

Pursuant to Presidential Proclamation 269, s. 2017 declaring the regular holidays and special non-working holidays for 2018, the Department of Labor and Employment issued Labor Advisory 10, s. 2017 prescribing the appropriate computation of holiday pay.

Labor Advisory 10, s. 2017 on “Payment of wages for the regular holidays and special (non-working) holidays for the 2018” will guide private sector employers on the list of holidays for 2018 and how wages are computed if their workers opted to report for work on such days.

Regular holidays are New Year’s Day (Jan. 1), Maundy Thursday (March 29), Good Friday (March 30), Araw ng Kagitingan (April 9), Labor Day (May 1), Independence Day (June 12), National Heroes Day (Aug. 27), Bonifacio Day (Nov. 30), Christmas Day (Dec. 25), and Rizal Day (Dec. 30).

Also included are the observance of Eidul Fitr and Eidul Adha, the proclamations of which will be issued after the approximate dates of the Islamic holidays have been determined in accordance with the Islamic calendar or the lunar calendar, or upon Islamic astronomical calculations.

For these holidays, work done during these days shall be paid 200 percent of an employee’s regular pay for the first eight hours or [(daily rate + COLA) x 200 percent]; while work done in excess of eight hours (overtime), shall be paid an additional 30 percent of the employee’s hourly rate or [(hourly rate of the basic daily wage x 200 percent x 130 percent x number of hours worked)].

Meanwhile, work done during these days that also falls on employee’s rest day shall be paid an additional 30 percent of his/her daily rate of 200 percent or [(daily rate + COLA) x 200 percent] + [30 percent (daily rate x 200 percent)]; while for work done in excess of eight hours (overtime), shall be paid an additional 30 percent of his/her hourly rate, or [(hourly rate of the basic daily wage x 200 percent x 130 percent x 130 percent x number of hours worked)].

However, if the employee did not report to work during these days, he/she shall still be paid 100 percent of his/her salary for that day or [(daily rate + COLA) x 100 percent].

The special non-working days, on the other hand, are Chinese New Year (Feb. 16), People Power anniversary (Feb. 25), Black Saturday (March 31), Ninoy Aquino Day (Aug. 21), and All Saints Day (Nov. 1) while Dec. 31, Dec. 24, and Nov. 2 are additional special non-working days.

The pay rules for these holidays provide that for work done, an employee shall be paid an additional 30 percent of his daily rate on the first eight hours or [(daily rate x 130 percent) + COLA]; while for work done in excess of eight hours (overtime), he/she shall be paid an additional 30 percent of his hourly rate or [(hourly rate of the basic daily wage x 130 percent x 130 percent x number of hours worked)].

For work done during these days that also fall on employee’s rest day, he/she shall be paid an additional 50 percent of his/her daily rate on the first eight hours, or [(daily rate x 150 percent) + COLA]; while for work done in excess of eight hours (overtime), he/she shall be paid an additional 30 percent of his hourly rate, or [(hourly rate of the basic daily wage x 150 percent x 130 percent x number of hours worked)].

But if the employee did not work, the “no work, no pay” principle shall apply unless there is a favorable company policy, practice or collective bargaining agreement granting payment on special holidays.

While the law requires that holiday pay be paid, it is not due to all employees. There are only certain employees who are covered or entitled to receive that statutory monetary benefit.

All employees in all establishments and undertakings, whether for profit or not, are entitled to holiday pay except the following: government employees; managerial employees; officers or members of a managerial staff; field personnel; members of the family of the employer who are dependent on him for support; domestic helpers; persons in the personal service of another; and workers who are paid by results as determined by the DOLE Secretary. If an employee falls in the above list of exemptions, then he/she is not entitled to the statutory monetary benefit of a holiday pay.

Businesses and employers who fail to comply with the payment of holiday pay will be opening themselves to liabilities, including but not limited to administrative, civil, and even criminal cases.

For administrative liabilities, the DOLE may sanction employers for their failure to comply with labor laws. These may be in the form of administrative penalties or fines.

As for civil liabilities, the employer may face a labor complaint which could result in a judgment award requiring the business to pay the holiday pay. In addition, if the withholding of the payment was done in bad faith, the employer may also be liable for moral and exemplary damages. Further, the employer may be also be directed to pay the attorney’s fees of the employees.

As for criminal liabilities, Labor Code violations may result in the following penalties: (a) fine not less than P1,000 but not more than P10,000; (b) imprisonment of not less than three months but not more than three years; or (c) both fine and imprisonment at the discretion of the court. It is the guilty officer/s who will be liable.

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