Managing Public Holidays in the Philippines
When it comes to managing HR services and payroll services in the Philippines, companies are required to have a detailed understanding of the relevant labor codes to ensure employees employed and remunerated accordingly. With another series of public holidays approaching, the team at Project T wanted to take the opportunity to share with you how public holidays are managed.
Firstly, let’s take a minute to recognize that Public Holidays are quite often unique to the country they are being celebrated in. And whilst we may celebrate the same public holiday in many countries (for example, Christmas Day), the way in which these days are celebrated and acknowledged can be completely different.
So let’s dive into the specifics.
What are the types of public holidays?
In the Philippines’s there are two types of public holidays that are observed throughout the year.
The first type of public holidays are called a “regular holiday” and these are fixed holidays that occur annually. Regular holidays in the Philippines can be a mixture of globally celebrated holidays (e.g. New Year’s Day) and locally celebrated holidays (e.g. National Heroes Day).
On a regular holiday:
- If employees are not required to work, they are to be paid 100% of their regular wage.
- If employees are required to work, they are required to be paid their regular salary, plus an additional 100%
The second type of public holidays are called “special non-working holidays” and these are holidays where the date can change from year to year. Special non-working holidays are often for observation of religious days (e.g. All Saints Day), or cultural days (Chinese New Year).
The nature of the days being observed on special non-working holidays, dictate that the actual date of the holiday might not be known in advance. Thus resulting in the government sometimes declaring special non-working holidays, in the weeks leading up to the holiday.
On a special non-working holiday:
- If employees are not required to work, the “no work, no pay” principle is followed.
- If employees are required to work, they are required to be paid their regular salary, plus an additional 30% for the first 8 hours of work
Managing public holidays in the workplace
Managing public holidays in your workplace, does not need to be a complicated, provided there are clear expectations between employer and employee in advance of the holidays. A public holiday often means that businesses shut down for the day, resulting in employees not having to work. However at times this can be dependent on the companies operating model, and if there is a need for the employees to work or not.
The best way to look whether there is a business need for employees to work on a holiday, is by looking at the companies operating model and the customers they serve. With many foreign business operating from the Philippines, but servicing customers offshore, it is best to address the “business need” item, by look at domestic and foreign companies separately.
Domestic Filipino Companies
For domestic Filipino companies, managing public holidays should be quite simple. Both employees and customers are recognizing the same public holiday, so in essence employees should be able to follow the schedule of regular and special non-working holidays.
In saying this, clear communication and expectation setting should always be undertaken by employers so that employees are aware of any requirements for them to work on a public holiday.
Foreign companies operating from the Philippines, yet servicing offshore clients, are often faced with a predicament of having two sets of public holidays. The public holidays of the Philippines and the public holidays of their offshore customer base.
In this scenario there are three ways that you can handle this:
Observing Philippines Public Holidays
For a foreign company observing Philippines public holidays, it would mean that their staff would not be required to work on these days. The positive in this is this reduces the employee overheads with the employer not needing to pay salary loadings. The negative is that the employer will not have the necessary workforce available to service their customers who are offshore and not observing a public holiday.
Observing Foreign Public Holidays
A foreign company can choose to have their employees work on Philippines public holidays, and observe the holidays of their foreign country. The positive in this scenario is that the employees would work more in the line with the needs of the foreign customers, and the Filipino employees would be paid salary loadings for working all Philippines holidays. The negative in this scenario is that foreign companies pay high amounts of salary loadings, and the Filipino employees do not get to share their holidays with the families.
Observing Mix Philippines / Foreign Public Holidays
Foreign companies can create a schedule that observes public holidays of both the Philippines and the foreign country. This schedule could incorporate dates that are important for the company, as well as incorporating dates that are important to the Filipino employees.
Project T can partner with your organization to guide you through managing HR and payroll services in the Philippines. Services ranges from staff leasing services, through to outsourcing of your HR services and payroll services to Project T.