The Department of Labor and Employment (DOLE) has issued a crucial reminder to all private sector employers across the Philippines regarding the proper computation of wages for the upcoming year-end holidays. With the nation set to observe Rizal Day on December 30 and New Year's Day on January 1 as regular holidays, and December 31 as a special non-working day, the agency emphasizes strict adherence to the mandated pay rules.
Understanding the Holiday Pay Rates
According to the guidelines outlined in Labor Advisory No. 17-2025, employees who will be on duty from December 30, 2025, to January 1, 2026, are entitled to receive additional compensation. The specific rates differ depending on the classification of the holiday and the employee's regular schedule.
For work performed on the regular holidays of December 30 (Rizal Day) and January 1 (New Year's Day), the payment structure is clear. Employers must pay 200 percent of the employee's daily wage for the first eight hours of work. Should an employee work beyond eight hours on these days, overtime pay is calculated at an additional 30 percent of their hourly rate on that holiday.
Pay Rules for Work on Rest Days and Special Non-Working Days
The advisory provides further clarification for scenarios where a regular holiday coincides with an employee's scheduled rest day. In such cases, the pay is significantly higher. The employee is entitled to a basic wage of 200 percent, plus an additional 30 percent of that 200 percent basic wage. Overtime work on such a day also commands an extra 30 percent of the hourly rate.
For the special non-working day on December 31 (New Year's Eve), the rules are distinct. Employees who work will receive their daily wage plus an additional 30 percent of their basic wage for the first eight hours. Overtime on this day also earns a 30 percent premium. If December 31 falls on an employee's rest day, the premium increases to an additional 50 percent of the basic wage for the first eight hours.
It is critical for both employers and workers to note the key difference for special non-working days regarding absences. The "no work, no pay" principle generally applies if an employee does not work on December 31. Payment is only required if there is an existing company policy, practice, or a collective bargaining agreement (CBA) that grants payment for such days.
Legal Basis for the Holiday Declarations
The classification of these holidays is grounded in official proclamations. Proclamation No. 727-2024 officially designates Rizal Day as a regular holiday and New Year's Eve as a special non-working day. Furthermore, Proclamation No. 1006-2025 confirms New Year's Day as a regular holiday.
DOLE's reminder serves as a proactive measure to prevent wage disputes and ensure that all workers are compensated fairly during the holiday season. Employers are urged to review the advisory carefully and apply the correct computations to avoid violations of the Labor Code.
