DOLE allows Employers in the Philippines to Defer Holy Week Holiday Payments: Explained!

Holy week is upon us! As always, employers across the Philippines must consider their obligations regarding payroll and holiday payments during this time. 

However, Holy Week 2020 has created quite unique circumstances for businesses in the Philippines. Firstly, two holidays fall on the same day! Secondly, employers across the country are working extremely hard to manage operations and balance cash flow in the context of COVID-19. 

The Department of Labor and Employment, or DOLE, has recently issued two sets of guidelines to cover each of the above circumstances as well as clarifying the computation of holiday payments for 9, 10 and 11 April 2020.  

If you’re an employer in the Philippines, here’s what you need to know about holiday payments during Holy Week!

Labor Advisory No. 13, Series of 2020

Labor Advisory No. 13, Series of 2020, entitled “Payment of Wages for the Regular Holidays on April 9 and 10, 2020 and Special Day on April 11, 2020” was issued by DOLE, dated 30 March 2020. The Advisory was issued in accordance with Section 3 of Proclamation No. 845, which gave DOLE the power to implement guidelines around public holidays in the Philippines for 2020.

Labor Advisory No. 13, Series of 2020 outlines the guidelines around how employees in the Philippines should be compensated by employers during the upcoming holidays on 9, 10 and 11 April 2020. 

Holy Week 2020 – A Unique Situation for Employers in the Philippines

The presence of two types of unconnected circumstances, makes Holy Week 2020 in the Philippines quite unique from the perspective of holiday payments:

1. This year, the holiday of Araw ng Kagitingan coincides with the holiday of Maundy Thursday. As such, Thursday 9 April 2020 will be a double regular holiday in the Philippines. Holiday compensation payments are therefore impacted.
2. In the context of COVID-19, many companies have been forced to implement alternative work arrangements, adopt skeletal workforces, reduce working hours and temporarily cease operations. As a result, workers may not be working their usual days or shifts.

In light of the above circumstances, many employers (and employees) are now asking: What are the rules for compensation payments for 9, 10 and 11 April 2020? How is compensation computed? Can compensation payments be deferred in light of COVID-19?

Five Employee Scenarios

Labor Advisory No. 13, Series of 2020 outlines the requirements for holiday payments during Holy Week 2020.  

The Advisory provides for five specific employee scenarios depending on various criteria, including: if the employee worked during the holiday, how long they worked for and whether or not the day was a regular rest day for the employee.

To make it as easy as possible to understand, we have outlined below the five Scenarios provided for under the DOLE Advisory.

Just match one of the below Scenarios with the circumstances of your employee(s). Then scroll further down below to see the relevant compensation computations for each employee for each holiday! 

Scenario One

• The employee did not work on the day of the holiday.
• The employee was present or ‘on leave with pay’ on March 16 or on the workday before the start of the enhanced community quarantine on March 17, 2020.

Scenario Two

• The employee worked on the day of the holiday.
• The employee worked for the regular 8 working hours.

Scenario Three

• The employee worked on the day of the holiday.
• The employee worked more than the regular 8 working hours.

Scenario Four

• The employee worked on the day of the holiday.
• The employee worked for the regular 8 working hours.
• The holiday falls on the employee’s rest day.

Scenario Five

• The employee worked on the day of the holiday.
• The employee worked more than the regular 8 working hours.
• The holiday falls on the employee’s rest day.

Check out below how each Scenario should be compensated under each of the three holidays! 

April 9, 2020 – Double Regular Holiday (Araw ng Kagitingan and Maundy Thursday)

1. Scenario One shall receive 200% of daily wage.
2. Scenario Two shall receive 300% of daily wage.
3. Scenario Three, for work done in excess of 8 hours, shall receive an additional 30% of his/her hourly rate x 300%.
4. Scenario Four shall receive 300% of daily wage plus an additional 30% on the 300%.
5. Scenario Five for work done in excess of 8 hours, shall receive an additional 30% overtime pay and 30% additional compensation on the 300% x hourly rate.

Note: Computation of living allowance is to be included in the computation of holiday pay. See below.

April 10, 2020 – Regular Holiday (Good Friday)

1. Scenario One shall receive 100% of daily wage.
2. Scenario Two shall receive 200% of daily wage.
3. Scenario Three for work done in excess of 8 hours, shall receive an additional 30% overtime pay on the 200% x hourly rate.
4. Scenario Four shall receive 200% of daily wage, and an additional 30% on the 200% basic wage.
5. Scenario Five for work done in excess of 8 hours, shall receive an additional 30% overtime pay and 30% additional compensation on the 200% of the hourly rate.

Note: Computation of living allowance is included in the computation of holiday pay. See below.

April 11, 2020 – Special (Non-Working) Day (Black Saturday)

1. Scenario One a “no work, no pay” policy shall apply (unless there exists a company policy, practice, or collective bargaining agreement that provides for payment)
2. Scenario Two shall receive an additional 30% of the basic wage.
3. Scenario Three for work done in excess of 8 hours, shall receive an additional 30% overtime pay on the 130% of the hourly rate.
4. Scenario Four shall receive an additional 50% of the basic wage.
5. Scenario Five for work done in excess of 8 hours, shall receive an additional 30% overtime pay on the 150% of the hourly rate.

Note: Computation of living allowance is included in the computation of holiday pay. See below.

The table below outlines the holiday pay rules expressed in formulas:

Key: 

• COLA is Cost of Living Allowance.
• Hourly rate is equal to the basic daily wage divided by eight hours.
• Eight hours is the regular working hours in a day in the Philippines.

Holiday Payment Deferments for Employers

DOLE also released Labor Advisory No. 13-A, a supplementary Advisory which allows for the deferment of the holiday payments referenced in Labor Advisory No. 13, Series of 2020 (see above). 

In the context of COVID-19, companies are entitled to defer the release of holiday payments relating to the holidays on 9, 10, and 11 April 2020. 

Deferments for how long? Deferment is only permitted “until such time that the present emergency situation has been abated and the normal operations of the company is in place”. In short, when things go back to normal! 

Companies Exempt from Labor Advisory No. 13

Companies that have completely closed or ceased operations during the Enhanced Community Quarantine period are exempted from the holiday payments under Labor Advisory No. 13, Series of 2020. 

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