Tag: Holiday Pay

The last two weeks of August 2026 bring two holidays that carry different pay rules under Philippine labor law. 21 August 2026, Ninoy Aquino Day, is a special (non-working) day, while 31 August 2026, National Heroes Day, is a regular holiday.

The difference matters. An employee who does not work on August 21 is generally not entitled to pay for the day. On August 31, an eligible employee who does not work is generally entitled to holiday pay equivalent to 100% of the employee’s wage for the day. Employees who work on either holiday are likewise entitled to different premium rates depending on the nature of the holiday, whether it coincides with the employee’s rest day, and whether the employee works beyond eight hours.

The Department of Labor and Employment (DOLE), through Labor Advisory No. 13, Series of 2026, has set out the applicable rules for the two holidays.

August 21 is a Special (Non-Working) Day

21 August 2026, or Ninoy Aquino Day, is a special (non-working) day. The basic rule for a special non-working day is “no work, no pay.” Thus, an employee who does not report for work on August 21 is generally not entitled to wages for that day.

There is, however, an important qualification. The employee may nevertheless be entitled to payment if the employer has a favorable company policy or practice, or a collective bargaining agreement (CBA), granting payment for special non-working days. For example, if an employer has consistently paid employees their regular daily wage for special non-working days even when they did not report for work, such consistent and deliberate practice may give rise to an enforceable company practice, notwithstanding the general “no work, no pay” rule applicable to special non-working days.

If, however, an employee works on August 21, the employee is entitled to 130% of the basic wage for the first eight hours of work:

Basic wage × 130%

For work beyond eight hours, the employee is entitled to an additional 30% of the hourly rate applicable on the special day:

Hourly rate of basic wage × 130% × 130% × number of overtime hours

The computation changes if August 21 also falls on the employee’s scheduled rest day. For the first eight hours, the employee is entitled to 150% of the basic wage:

Basic wage × 150%

For overtime work on that day:

Hourly rate of basic wage × 150% × 130% × number of overtime hours

Employers should therefore consider not only whether an employee worked on August 21, but also whether the date coincides with the employee’s scheduled rest day.

August 31 is a Regular Holiday

31 August 2026, or National Heroes Day, is a regular holiday.

The rule is different from that applicable to August 21.

An employee who does not work on August 31 is generally entitled to 100% of the employee’s wage for the day, provided the employee reported for work or was on leave of absence with pay on the day immediately preceding the regular holiday. Where the day immediately preceding the regular holiday is a non-working day in the establishment or the employee’s scheduled rest day, the employee remains entitled to holiday pay if the employee reported for work or was on paid leave on the day immediately preceding that non-working day or rest day.

For work performed on 31 August, the employee is entitled to 200% of the basic wage for the first eight hours:

Basic wage × 200%

For overtime work on the regular holiday, an additional 30% of the hourly rate applicable on the holiday is payable:

Hourly rate of basic wage × 200% × 130% × number of overtime hours

If August 31 also falls on the employee’s scheduled rest day, the employee is entitled to an additional 30% of the basic wage applicable on the regular holiday.

For the first eight hours:

Basic wage × 200% × 130%

For overtime work:

Hourly rate of basic wage × 200% × 130% × 130% × number of overtime hours

The Rates Depend on the Circumstances

The applicable rate therefore depends on three considerations: the classification of the holiday, whether the employee works, and whether the holiday falls on the employee’s scheduled rest day.

For August 21, a special (non-working) holiday, the rates are:
• No work: generally no work, no pay, subject to a favorable company policy, practice, or CBA.
• Work, first eight hours: 130% of the basic wage.
• Work on rest day, first eight hours: 150% of the basic wage.
• Overtime: an additional 30% of the applicable hourly rate.
• Overtime on rest day: an additional 30% of the applicable rest-day hourly rate.

For August 31, a regular holiday, the rates are:
• No work: 100% of the basic wage, subject to the applicable preceding-day requirement.
• Work, first eight hours: 200% of the basic wage.
• Work on rest day, first eight hours: 260% of the basic wage.
• Overtime: an additional 30% of the applicable hourly rate.
• Overtime on rest day: an additional 30% of the applicable rest-day holiday rate.

What Employers Should Check Before Payroll

The DOLE advisory provides several points that employers should verify before processing payroll for August.

First, employers should identify whether the employee worked or did not work on the particular holiday. The treatment of an employee who does not work on a special non-working day is materially different from that of an employee who does not work on a regular holiday.

Second, employers should determine whether the holiday coincides with the employee’s scheduled rest day, since this affects the applicable premium rate where the employee works.

Third, employers should account for overtime work separately. The premium applicable to the first eight hours does not replace the separate overtime premium.

Finally, for August 31, employers should verify whether the employee satisfies the requirement concerning attendance or paid leave on the day immediately preceding the regular holiday. This becomes particularly relevant where the preceding day is itself a non-working day or the employee’s scheduled rest day.

Employers should also ensure that their payroll systems and attendance records correctly reflect the applicable holiday classification. This is particularly important for businesses with rotating shifts, compressed workweeks, or employees whose scheduled rest days do not fall on weekends.

Final Word

The treatment of holidays under Philippine labor law depends upon how the particular day is legally classified and the circumstances under which the employee works or does not work.

For August 2026, the difference is rather clear: August 21 is a special (non-working) day, while August 31 is a regular holiday. The resulting rules on holiday pay, work premiums, rest-day premiums, and overtime are consequently different.

For employers, the practical task is to ensure that the correct classification and corresponding rate are reflected in payroll. A failure to apply the applicable holiday-pay rules may result in wage deficiencies and, where appropriate, labor claims.

Reviewing payroll practices and employee schedules before a holiday can therefore help prevent disputes that are considerably more difficult to address after the wages have already been paid.

Kristoffer Monico S. Ng is a Philippine lawyer whose practice focuses on labor and employment, corporate and commercial law, tax, energy law, and civil and criminal litigation. He advises businesses and individuals on legal risk, regulatory compliance, taxation, dispute resolution, and complex commercial matters, representing clients before courts, quasi-judicial agencies, and administrative bodies, while also providing strategic legal advice outside the courtroom. He also regularly writes on developments in Philippine jurisprudence and regulation, providing practical insights on legal issues affecting businesses and individuals.

If you require legal advice concerning labor and employment, wage and holiday-pay compliance, or any other legal matter within these practice areas, you may reach us through e-mail at nico@nlaw.ph to discuss your particular circumstances.

Suggested Article:

In a previous article, we discussed why an employee’s unauthorized absence does not automatically constitute abandonment of employment, and the circumstances that must be present before abandonment may be established. Read our discussion on AWOL and abandonment of employment:

https://nlaw.ph/2026/08/05/awol-does-not-automatically-mean-abandonment-of-work-what-every-employer-and-employee-should-know/