Computation of Employee Wages in the Philippines for Independence Day
Payment of Wages for Independence Day: Computation of Employee Salaries in the Philippines

Payment of Wages for Independence Day: Computation of Employee Salaries in the Philippines

Posted on June 12, 2021
2 mins read

As you may already be aware, Independence Day in the Philippines falls on 12th June each year.

For employees – this might mean walang pasok!

For employers – this means getting your head around what wages your employees are entitled to be paid for any work performed on Independence Day!

However, no need to worry – employers, we have you covered!

Below you will find our summary of DOLE’s latest advisory regarding the payment of employee wages for Independence Day in the Philippines!

As always, don’t hesitate to contact our Specialist Payroll Team if you are seeking Payroll Services for your PH business!

Recent DOLE Advisory

On 11 June, 2021, DOLE released its most recent Labor Advisory.

The purpose of this Labor Advisory is to outline the rules and requirements for employers for the payment of wages in relation to the Regular Holiday of Independence Day in the Philippines this year which falls on 12 June, 2021.

This Advisory is Labor Advisory No. 12, Series of 2021 and was issued pursuant to Proclamation No. 1107, which was issued by the President of the Philippines on 26 February, 2021.

Wage Computations for Independence Day

Here are 4 key matters that PH employers must consider when considering and applying the rules and guidelines outlined under Labor Advisory No. 12, Series of 2021:

  • Is there already a company policy, collective agreement or standard company practice that identifies any special requirements for wage payments on Independence Day?
  • Which employees worked on Independence Day and which employees did not work?
  • If an employee worked on Independence Day, did they work for a longer period of time than they would usually work on such a day?
  • In 2021, Independence Day actually falls on a Saturday. Would this day have usually been a day off for a particular employee? Or does the relevant employee usually work on Saturdays?

Regular Holiday – 12 June, 2021 Independence Day 

DOLE has provided for 5 different Case Scenarios that will dictate if an employee should be paid for the Regular Holiday of Independence Day and how much an employee should be paid (relative to their usual salary).

The 5 Case Scenarios are as follows:

Scenario 1 – If an employee doesn’t work on Independence Day, they should be paid 100% of their wages for the day (subject always to any other applicable labor or DOLE laws. i.e. [(COLA + Basic Wage) x 100%]

Scenario 2 – Where an employee works on Independence Day, they should be paid 200% of their basic wage for the initial 8 hours of work. i.e. [(COLA + Basic Wage) x 200%]. 

Scenario 3 – If the employee works for 8+ hours (i.e. overtime) on Independence Day, they should be paid an additional 30% of their hourly rate. i.e. [Hourly rate of basic wage x 200% x 130% x number of hours worked]. 

Scenario 4 – Where the employee works on Independence Day, but it’s a day that is usually a rest day for them, the employee should be paid an additional 30% of their basic wage of 200% i.e. [(Basic Wage + COLA) x 200%] +[30% (Basic Wage x 200%)].

Scenario 5 – If an employee works for 8+ hours (i.e. overtime) on Independence Day AND the day was usually supposed to be a rest day for the employee, they should be paid an additional 30% of their hourly rate. i.e. (Hourly Rate of Basic Wage x 200% x 130% x 130% x number of hours worked). 

*Note: In these regular Labor Advisories, DOLE refers to the Cost of Living Allowance as “COLA”. DOLE requires that COLA is to be included in the Regular Holiday wage payment computation (see above Case Scenarios).

Certain Establishments Exempt Under Labor Advisory No. 12, Series of 2021

DOLE Labor Advisory No. 12, Series of 2021 provides for an express exemption for certain businesses in the Philippines.

Any establishments that have entirely closed or stopped operations during the community quarantine period will be exempt from the obligation to pay employee wages in respect of Independence Day in 2021.

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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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