Proper pay rules on holidays August 20, 21, and 27: DOLE urges private employers to observe the rules

(DOLE logo taken from: http://www.dole.gov.ph)

While August 20 and 27 are regular holidays, August 21 is a special non-working day. Department of Labor and Employment (DOLE) Secretary Baldoz urges the private sectors to comply pay rules for workers on the said proclaimed holidays.

The following are proper computation of holiday pay according to DOLE pursuant to the Labor Advisory No. 2:

Computation for Regular holidays: August 20 and 27

(Editor’s Note: For more accurate reference for the proper computation for regular and special holiday pays, refer to footnotes for DOLE advisory on proper pay rules for August holidays published on the Official Gazette.)

1.  If the employee did not render work during the regular holiday, he/she shall be entitled to 100 percent of his/her salary for that day.

[(Daily Rate + COLA) x 100%]

2.  If the employee reported for work on such day, he/she shall be entitled to 200 percent of his/her regular salary for that day for the first eight (8) hours.

[(Daily Rate + COLA) x 200%]

3.  For overtime work rendered during this regular holiday, he/she shall be entitled to an additional 30 percent of his/her hourly rate on said day.

(Hourly Rate x 200% x 130% x Number of Hours Worked)

4.  If the employee worked during a regular holiday that also falls on his/her rest day, he/she shall be entitled to an additional 30 percent of his/her daily rate of 200 percent.

[(Daily Rate + COLA x 200%) + 30% (Daily Rate x 200%)]

5.  For overtime work rendered during the regular holiday that falls on his/her rest day, he/she shall be entitled to an additional 30 percent of his/her hourly rate on said day.

(Hourly Rate x 200% x 130% x 130% x Number of Hours Worked)

Computation for Special (Non-Working), August 21, 2012

1.  If the day is unworked, the “no work, no pay” principle shall apply, unless there is a favorable company policy, practice or collective bargaining agreement (CBA) granting payment on a special day;
2.  If worked, the employee shall be entitled to an additional 30 percent of his/her daily rate on the first eight hours of work.

(Daily rate x 130%)

3.  If the employee worked during a special day, he/she shall be entitled to an additional 30 percent of his/her hourly rate on such special day.

(Hourly rate x 130% x Number of Hours Worked)

4.  If the employee worked during the special day that also fall on his/her rest day, he/she shall be entitled to an additional 50 percent of his/her daily rate on first eight (8) hours of work.

(Daily Rate x 150%)

5.  In excess of eight hours, he/she shall be entitled to an additional 30 percent of his/her hourly rate on such special day.

(Hourly Rate x 130% x 150% x Number of Hours Worked)

According to DOLE the prevailing minimum wage (Daily Rate) in National Capital Region is PhP446.

You may refer the proceeding table for the summary of daily minimum wage rates in the country:

SUMMARY OF CURRENT REGIONAL DAILY MINIMUM WAGE RATES Non-Agriculture, Agriculture As of July 2012 (In pesos) REGION WO No./ DATE OF EFFECTIVITY NON- AGRICULTURE AGRICULTURE Plantation Non-Plantation NCR a/ WO 17/June 3, 2012 P 409.00 – 446.00 P 409.00 P 409.00 CAR b/ WO 15/June 18, 2012 263.00 – 280.00 246.00 – 262.00 246.00 – 262.00 I c/ WO 15/July 25, 2012 233.00 – 253.00 233.00 205.00 II d/ WO 15/May 16, 2012 247.00 – 255.00 235.00 – 243.00 235.00 – 243.00 III e/ WO 16/June 24, 2011 279.00 – 330.00 264.00 – 300.00 244.00 – 284.00 IV-A f/ WO 15/May 15, 2012 255.00 – 349.50 251.00 – 324.50 231.00 – 304.50 IV-B g/ WO 05/Nov. 11, 2010 252.00 – 264.00 210.00 – 219.00 190.00 – 199.00 V h/ WO 15/ April 7, 2012 228.00 – 252.00 228.00 228.00 VI i/ WO 20/ May 31, 2012 235.00 – 277.00 245.00 235.00 VII j/ WO16/Sept 22, 2011 260.00 – 305.00 240.00 – 287.00 240.00 – 287.00 VIII k/ WO 16/June 1, 2011 253.00 228.00-234.00 213.50 IX l/ WO 17/ Nov. 25, 2011 267.00 242.00 222.00 X m/ WO 16/July 24, 2011 271.00 – 286.00 259.00 – 274.00 259.00 – 274.00 XI n/ WO 17/Jan. 1, 2012 301.00 291.00 291.00 XII o/ WO 17/April 18, 2012 270.00 248.00 243.00 XIII p/ WO 11/November 11, 2011 258.00 248.00 228.00 ARMM q/ WO 13/ September 2, 2011 232.00 232.00 232.00

a/  Provides integration of the P22 COLA and grants P30 COLA (P20 upon effectivity and P10 on November 1, 2012. b/  Granted P8.00 wage increase. c/  Granted P5.00-P8.00 wage increase. d/  Granted P 10.00 wage increase.Integrated to P15 COLA under W.O. No. RBII-10 into the basic pay. e/  Granted additional P 14 COLA, the P4 under W.O. 15 will be integrated into the basic wage on January 1, 2012 f/  Granted P2-90 wage increase for 5 years (for workers receiving below (P255); P12.50 Conditional Temporary Productivity Allowance (for workers receiving above P255) g/  Granted P 12 wage increase h/  Granted P3.00 – P23.00 per day wage increase due to simplification. i/   Granted P12.00 wage increase j/   Granted P20.00 wage increase k/  Granted P15 COLA to be given in 2 tranches: P10 on Jun 1 & P5 on Sept. 1, 2011; integrated into the basic pay the P8 COLA under W.O.14 l/   Granted P 12 wage increase. m/ Integrated the P17 COLA effective for 6 months; to be integrated into the basic wage thereafter. n/  Granted P15 COLA; P5 effective Jan. 1, 2012 and P10 effective May 1, 2012 o/  Integration of the P15 COLA under W.O.No. 16, Granted P10 COLA for Non-Agri.; P8 COLA (upon effectivity) for Agriculture sector and additional P4 (Plantation) & P6 COLA (for Non-Plantation) effective Dec. 1, 2012; P6 COLA upon effectivity for retail/service establishments & additional P4 (for Retail/Service w/more than 10 workers) & P6 (for R/S w/ not more than 10 workers) effective Dec 1, 2012. p/  Granted P11 wage increase and P4 COLA q/  Granted P10.00 COLA.Source: National Wages and Productivity Commission Updated:30 July 2012

Source: DOLE

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August 20 declared regular holiday, pay rules apply

Malacañang Palace (File retrived from pregi.net)

President Aquino signed Proclamation No. 455, August 13, 2012, declaring Monday, August 20, 2012 a regular holiday nationwide in observance of Feast of Ramadhan or Eid’l Fitr.

The following are nationwide holidays to be observed in August 2012:

1. August 20, Monday – Eid’l Fitr (regular holiday)
2. August 21, Tuesday – Ninoy Aquino Day (special non-working day)
3. August 27, Monday – National Heroes Day (regular holiday)

On holiday pay rules

What are the premises that an employee is entitled of the holiday pay?

The Department of Labor (DOLE) sets the conditions that an employee is entitled of the holiday pay when:

1. He/she is present on the workday immediately preceding the regular holiday; or
2. He/she is on leave of absence with pay on the day immediately preceding the regular holiday.

Computation of holiday pays based on the standard labor provisions

Based on DOLE Compilation of Question and Answers on Workers’ Benefits, the current minimum wage in the National Capital Region (NCR) is already PhP446 COLA inclusive (basic wage PhP426 + COLA PhP20) effective on June 3, 2012.

Moreover, effective November 1, 2012, the minimum wage in Metro Manila will become PhP456 because of the approved additional PhP10 to COLA.

The Omnibus Rules  in Labor Code provides (chanrobles.com):

SECTION 4. Compensation for holiday work. — Any employee who is permitted or suffered to work on any regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent (200%) of his regular daily wage. If the holiday work falls on the scheduled rest day of the employee, he shall be entitled to an additional premium pay of at least 30% of his regular holiday rate of 200% based on his regular wage rate.

Illustration 1: Employee Y worked on regular holiday (no overtime). That is,

basic or regular daily wage   x   2   =   daily worked regular holiday pay

Illustration 2: Employee Y worked on regular holiday, which is his scheduled rest day. That is,

(regular daily wage   x   2)   +   30% of (regular daily wage   x   2)   =   daily worked regular holiday-rest day pay

SECTION 5. Overtime pay for holiday work. — For work performed in excess of eight hours on a regular holiday, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on such holiday work plus at least 30% thereof.

Illustration: (regular daily wage   x   2)   ÷   8 hours   =   holiday hourly rate; then,

(holiday hourly rate)   +   (30% of holiday hourly rate)   =   hourly overtime pay for holiday work

Where the regular holiday work exceeding eight hours falls on the scheduled rest day of the employee, he shall be paid an additional compensation for the overtime work equivalent to his regular holiday-rest day for the first 8 hours plus 30% thereof. The regular holiday rest day rate of an employee shall consist of 200% of his regular daily wage rate plus 30% thereof.

Illustration: (daily worked regular holiday-rest day pay)   ÷   8 hours   =   hourly worked regular holiday-rest day rate; then,

(hourly worked regular holiday-rest day rate) + (30% of hourly worked regular holiday-rest day rate) = hourly overtime pay for worked regular holiday-rest day

According to HR Practitioners’ Guide, a website for HR practitioners, only the basic wage, excluding COLA, is used in computing overtime, night differential, 13th month, and retirement pays .

The Labor Code further provides (chanrobles.com):

SECTION 8. Holiday pay of certain employees. — (a) Private school teachers, including faculty members of colleges and universities, may not be paid for the regular holidays during semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacation;

(b) Where a covered employee, is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate.

(c) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work.

(d) Workers who have no regular working days shall be entitled to the benefits provided in this Rule.

SECTION 9. Regular holiday falling on rest days or Sundays. — (a) A regular holiday falling on the employee’s rest day shall be compensated accordingly.

(b) Where a regular holiday falls on a Sunday, the following day shall be considered a special holiday for purposes of the Labor Code, unless said day is also a regular holiday.

Sources of facts being quoted herein come from:

1. Philippine Official Gazette
2. Chan Robles Virtual Law Library
3. Department of Labor and Employment (Philippines)
4. National Wages and Productivity Commission (Philippines)

Related Article:

1. Proper pay rules on holidays August 20, 21, and 27: DOLE urges private employers to observe the rule