Understanding Holiday Pay and Special Holiday Pay for Monthly Employees in the Hotel Industry in the Philippines

The rules on holiday pay and special holiday pay in the Philippines are governed by the Labor Code of the Philippines (Presidential Decree No. 442) and pertinent regulations issued by the Department of Labor and Employment (DOLE). These rules are particularly important for the hotel industry, where operations often continue during holidays to cater to guests.

Under Article 94 of the Labor Code, employees are entitled to holiday pay equivalent to 100% of their regular daily wage even if they do not report for work, provided they are present or on approved leave on the workday immediately preceding the regular holiday. For employees who report to work on a regular holiday, they are entitled to 200% of their daily wage for the first eight hours. For monthly-paid employees, the principle of "no work, no pay" does not apply to regular holidays since their monthly salary already includes payment for all regular holidays, as confirmed by DOLE Advisory No. 01, Series of 2015.

Special (non-working) holidays, on the other hand, follow a different rule. If an employee does not work on a special holiday, no pay is required unless there is a favorable company policy, practice, or collective bargaining agreement (CBA) that states otherwise. However, employees who report to work on special holidays are entitled to 130% of their daily wage for the first eight hours.

The hotel industry, which often operates 24/7, must comply with these rules while balancing operational needs. For example, during regular holidays such as Araw ng Kagitingan or Christmas Day, hotel employees reporting to work are entitled to the double pay provision. On special holidays such as Ninoy Aquino Day or Black Saturday, those who work receive an additional 30% pay. In cases where an employee works overtime on a holiday, the additional compensation must also include the applicable overtime premium (25% for regular overtime and 30% for overtime during special holidays).

For establishments under flexible work arrangements, DOLE Labor Advisory No. 9, Series of 2020, ensures that holiday pay rules remain applicable regardless of alternative work schedules. Moreover, hotels must ensure that these payments are properly calculated and reflected in payroll to avoid penalties for non-compliance.

Data from DOLE reveal that complaints related to holiday pay violations accounted for 12% of labor disputes filed in 2023. Non-compliance not only results in financial penalties but also damages the company’s reputation. Hotels should implement clear policies, train HR staff on labor law compliance, and utilize automated payroll systems to ensure accurate computation of holiday pay.

The inclusion of holiday and special holiday pay in HR strategies reflects a commitment to employee welfare and compliance with Philippine labor laws. By prioritizing these, hotels can maintain a motivated workforce, improve employee retention, and foster a positive workplace culture that enhances guest satisfaction.