2022 Holiday Premium Pay Amidst a Pandemic
Amidst the current pandemic, the rules on holiday pay might be pushed aside and some employers might not want to pay their employees holiday pay because of the difficulties COVID-19 has presented to their business. However, on 28 October 2021, DOLE issued Labor Advisory 19-21 to remind employers to “comply with their legal obligation in providing proper wages to their workers for the declared holidays”. The issuance is also in anticipation of Proclamation No. 1236, issued by President Rodrigo Duterte, declaring the regular holidays and special (working/non-working) days for the year 2022. 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.
Further, Acting Secretary Ana Dione issued Labor Advisory 19-21 indicating the proper computation of employees’ wages for regular holidays. The following rules shall apply:
1. For regular holidays and when employees worked on that day, premium pay shall be paid for the employees. If the employee did not work, Employees shall be paid 100% of their salary for the days indicated even if they did not work on that day. But if employees rendered work on that day, they shall be paid 200% of their salary for the first 8 hours. Formula: [(Basic wage + COLA) x 200%];
Example:
Basic daily wage + COLA = P1000.00
Holiday Premium Pay:
P1000.00 x 200% = P2000.00
2. For overtime pay, an employee shall be paid an additional 30% of his/her hourly rate. Formula: [Hourly rate of the basic wage x 200% x 130% x number of hours worked];
Example:
Basic wage + COLA = P1000.00
Hourly rate: P125.00
Overtime: 2 hours
Holiday Premium Pay with overtime:
P125.00 x 200% x 130% x 2 = P650.00
3. If a regular holiday falls on an employee’s rest day and he/she works on that day, an employee shall be paid an additional 30% of his/her basic wage of 200%. Formula: [Hourly rate of the basic wage x 200% x 130% x number of hours worked]; and
Example:
Basic wage + COLA = P1000.00
Hourly rate: P125.00
Hours worked during rest day: 8 hours
Holiday Premium Pay:
P125.00 x 200% x 130% x 8 = P2600.00
4. For overtime pay on a regular holiday that also falls on an employee’s rest day, an employee shall be paid an additional 30% of his/her hourly rate on the said day. Formula: [(Basic wage + COLA) x 200%] + [30% (Basic wage x 200%)].
Example:
Basic wage = P900.00
COLA = P100.00
Holiday Premium Pay with overtime:
[P1000.00 x 200%] + [30% (P900.00 x 200%) = P4340.00
However, pursuant to Sec. 6, Rule IV, Book III of the Omnibus Rules Implementing the Labor Code, an employee will not be entitled to holiday pay if the same was absent without pay the workday immediately preceding a regular holiday.
The same rule on absences applies for successive regular holidays or two holidays lining up after another. If an absent employee is absent without pay the workday immediately preceding a regular holiday, the employee is not entitled to holiday pay for the successive regular holidays. However, if the employee is absent without pay the workday immediately preceding a regular holiday but is present on the first regular holiday, the same is entitled to holiday pay for the next holiday.
