Payment of Wages In The Philippines - Christmas Holidays
DOLE Advisory on Payment of Wages In The Philippines –  Christmas Holidays 2020

DOLE Advisory on Payment of Wages In The Philippines – Christmas Holidays 2020

Posted on December 13, 2020
4 mins read

In early December 2020, The Department of Labor and Employment, or DOLE, released a Labor Advisory which outlines the rules for paying the wages of employees in the Philippines during the Special (Non-Working) Days and Regular Holidays that fall over the Christmas and New Year period in 2020. 

The Labor Advisory also contains certain exemptions for businesses that have entirely closed or ceased operations during the COVID-19 community quarantine period in the Philippines.

So if you own, run or manage a business in the Philippines, make sure to check out the rules below to understand your payroll obligations to employees during the Christmas holidays!

As always, if you are seeking outsourced payroll services in the Philippines, don’t hesitate to Contact our Team! Our specialist in-house Payroll Team would be happy to discuss your payroll requirements for your PH business!

Contents

Labor Advisory No. 32, Series of 2020

Labor Advisory No. 32, Series of 2020, entitled “Payment of Wages for the Special (Non-Working) Days on December 8, 24, & 31, 2020 and Regular Holidays on December 25 & 30, 2020” was issued by DOLE and dated 7 December 2020.

The Advisory was released pursuant to Proclamation No. 845, which was issued by the President of the Philippines on 15 November 2019.  

This Labor Advisory outlines the rules for paying employees in the Philippines for Special (Non-Working) Days and Regular Holidays that fall during the 2020 Christmas and New Year holiday period.

Basis of Wage Computations 

Labor Advisory No. 32, Series of 2020 outlines the mechanism for computing wage payments across five distinct situations that might apply to an employee in relation to a particular day. The five situations depend on various factors, including:

a) The status of the employee (e.g. subject to a policy, company practice or bargaining agreement);

b) If the employee worked or not on the particular day;

c) If the employee worked more hours than their standard working day on the particular day; and

d) Whether or not the employee would usually work or rest on the particular day.

The DOLE Advisory provides that the “Cost of Living Allowance” should be included in the computation of holiday pay (where applicable below). This is referenced as “COLA” below.

Special (Non-Working) Days – December 8, 24 and 31 of 2020  

Situation No. 1 – Where an employee didn’t work on the Special (Non-Working) Day, the principle of “no work, no pay” shall apply unless there exists a company policy, practice, contract or collective agreement which provides for payment on a Special (Non-Working) Day. 

Situation No. 2 – Where an employee does work on the Special (Non-Working) Day, they are entitled to an additional 30% of their basic wage for the first eight hours of work on that day. i.e. [(Basic Wage x 130%) + COLA]. 

Situation No. 3 – Where an employee works more than 8 hours on the Special (Non-Working) Day, they are entitled to an additional 30% of their hourly rate on the day. i.e. [Hourly rate of basic wage x 130% x 130% x number of hours worked]. 

Situation No. 4 – If an employee works on the Special (Non-Working) Day, and that day is usually a rest day for the employee, they are entitled to an additional 50% of their basic wage for the first 8 hours of the day worked. i.e. [(Basic Wage x 150%) + COLA].

Situation No. 5 – Where an employee works more than 8 hours on the Special (Non-Working) Day and the day would usually be the employee’s rest day, the employee is entitled to an additional 30% of their hourly rate for that day. i.e. (Hourly Rate of Basic Wage x 150% x 130% x number of hours worked). 

Regular Holidays – December 25 (Christmas Day) and 30 (Rizal Day) 2020

Situation No. 1 – Where an employee didn’t work on the Regular Holiday, they are entitled to 100% of their wage for that day, subject to any applicable requirements under the Implementing Rules and Regulations of the Labor Code of the Philippines (amended from time to time). I.e. [(Basic Wage + COLA) x 100%]

Situation No. 2 – Where an employee does work on the Regular Holiday, they are entitled to 200% of their basic wage for the first eight hours of work on that day. i.e. [(Basic Wage + COLA) x 200%]. 

Situation No. 3 – Where an employee works more than 8 hours on the Regular Holiday, they are entitled to an additional 30% of their hourly rate on the day. i.e. [Hourly rate of basic wage x 200% x 130% x number of hours worked]. 

Situation No. 4 – If an employee works on the Regular Holiday, but that day is usually a rest day for the employee, they are entitled to an additional 30% of their basic wage of 200% (see Situation No.2 above) i.e. [(Basic Wage + COLA) x 200%] +[30% (Basic Wage x 200%)].

Situation No. 5 – Where an employee works more than 8 hours on the Regular Holiday and the day is usually a rest day for that employee, the employee is entitled to an additional 30% of their hourly rate for that day. i.e. (Hourly Rate of Basic Wage x 200% x 130% x 130% x number of hours worked). 

Companies Exempt from Labor Advisory No. 32, Series of 2020

Due to the national emergency arising from the COVID-19 pandemic, establishments in the Philippines that have entirely closed or ceased operations during the community quarantine period are exempt from the payment for the Regular Holidays on 25 December 2020 and 30 December 2020. 

Related Articles 

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DISCLAIMER: This article is strictly for general information purposes only. Nothing in this article constitutes or intends to constitute financial, accounting, regulatory or legal advice and must not be used as a substitute for professional advice. It is still necessary to consult your relevant professional adviser regarding any specific matter referenced above.

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If you want to know more about our tailored services and processes, drop us a line to discuss how we can help you to grow your business. We will respond to you within 24 hours.