How to Compute Holiday Pay on Chinese New Year 2021

Chinese New Year Day was declared as one of the special days in Proclamation 986 declaring 12 February 2021 (Friday) as Special (Non-Working) Day.

On 9 February 2021, the Department of Labor and Employment (DOLE) issued Labor Advisory 02, Series of 2021 providing rules for pay for the special (Non-Working) Day on 12 February 2021 being Chinese New Year. See the PDF version of Labor Advisory 02, Series of 2021 here

For instance, Ms. Julie Henderson is a Waitress of Murana Marumifa Foodhouse located in NCR with at least twenty employees. She receives minimum wage for her pay. For instance, she worked on the said special day and even rendered an overtime of two (2) hours. How should her pay be computed?

In the example provided below, the COLA will be disregarded since the NCR minimum wage based on Wage Order No. 22 has no more COLA.

Thus:

Daily Wage                   –        PhP537.00

Hourly Equivalent         –        PhP  67.125

The basic principle here is that if the employee did not work, the “no-work, no-pay” principle shall apply unless there is a favorable company policy, practice or collective bargaining agreement (CBA) granting payment on a special day.

Rule A:

For work done during the special day, the employee shall be paid an additional 30% of the basic wage on the first eight hours of work.

Formula:    [(Basic wage x 130%) + COLA]

Sample Computation:

Special Day Pay =         [(PhP537 x 130%) + 0.00]

                                    [(PhP698.10) + 0.00]

                                    PhP698.10

Rule B:

For work done in excess of eight hours (overtime work), the employee shall be paid an additional 30% of the hourly rate on said day

Formula:    (Hourly rate of the basic wage x 130% x 130% x number of hours worked)

Sample Computation:

Overtime Pay =            (PhP67.125 x 130% x 130% x 2 hours of OT)

(PhP87.2626 x 130% x 2 hours of OT)

(PhP113.44125 x 2 hours of OT)

PhP226.88

Rule C:

For work done during a special day that also falls on the employee’s rest day, he shall be paid an additional 50% of the basic wage on the first eight hours of work. This is relevant in this case considering that there are employees who consider Saturday as a rest day.

Formula:    [(Basic wage x 150%) + COLA]

Sample Computation:

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Special Day Pay =         [(PhP537 x 150%) + 0.00]

                                    [(PhP805.50) + 0.00]

                                    PhP805.50

Rule D:

For work done in excess of eight hours (overtime work) during the special day that also falls on the employee’s rest day, he shall be paid an additional 30% of the hourly rate on said day

Formula:    (Hourly rate of the basic wage x 150% x 130% x number of hours worked)

Sample Computation:

Overtime Pay =            (PhP67.125 x 150% x 130% x 2 OT hours)

                                    (PhP100.6875 x 130% x 2 OT hours)

                                    (PhP130.9375 x 2 OT hours)

                                    PhP261.79

Thus, total pay for the day based on different rules:

Under Rule A and Rule B (Work on Special Day with OT on such Day):

Basic Daily Wage + OT of 2 Hours

PhP698.10 + PhP226.88 = PhP924.98

Under Rule C and Rule D (Work on Special Day Falling on Rest Day with OT on such Day):

Basic Daily Wage + OT of 2 Hours

PhP805.50 + PhP261.79 = PhP1,067.29