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Philippine businesses close to accommodate local celebrations and give their employees a well-deserved break. Many also continue to operate, but they must observe labor laws to do so.
If you are managing a Filipino workforce through an employer of record (EOR) in the Philippines, this article can help you learn more about local occasions. More importantly, it helps you understand the impact of Philippine holidays on EOR operations.
Keep reading to explore how EOR firms navigate the unique considerations of holiday work.
Overview of Philippine holidays and celebrations
The Philippines observes various public holidays throughout the year, from historical commemorations to religious occasions. These celebrations can be classified into two main categories: regular holidays and special (non-working) holidays.
Let’s discuss these different types of Philippine holidays in detail.
Regular Philippine holidays
Regular holidays are established by law, making them official and celebrated nationwide. They are considered “regular” since they occur on fixed dates throughout the year, creating a predictable schedule for Filipinos.
This type of commemoration includes the following celebrations and observances:
- New Year’s Day (January 1)
- The Day of Valor (April 9)
- Labor Day (May 1)
- Independence Day (June 12)
- National Heroes Day (August 26)
- Bonifacio Day (November 30)
- Christmas Day (December 25)
- Rizal Day (December 30)
However, regular holidays without fixed dates also exist. These are typically religious observances that are based on doctrinal calendars, such as:
- Maundy Thursday (Holy Week)
- Good Friday (Holy Week)
- Eid’l Fitr (Feast of Ramadhan)
- Eid’l Adha (Feast of Sacrifice)
The Official Gazette has an up-to-date list of these commemorations and the dates they fall on every year.
The impact of these regular Philippine holidays on EOR operations is primarily due to them being mandatory non-working days. The legal aspects of BPO employee benefits introduce such considerations, which we will explore in one of the following sections.
Special (non-working) holidays
Special (non-working) holidays in the Philippines are designated days off work with unique characteristics. They are declared by the president and not established by law as mandatory non-working days, which means businesses can maintain operations.
The special (non-working) holidays Filipinos celebrate include:
- Ninoy Aquino Day (August 21)
- All Saints’ Day (November 1)
- Feast of the Immaculate Conception of Mary (December 8)
- Last Day of the Year (December 31)
In addition to these public observances, the president can add to this list. Some examples of additional special (non-working) holidays are:
- Chinese New Year (Based on the Chinese calendar)
- Black Saturday (Based on the liturgical calendar)
- All Souls’ Day (November 2)
- Christmas Eve (December 24)
In some cases, the government moves special holidays to create long weekends for the Filipino workforce. For example, if a holiday falls on a Saturday or Sunday, the president can move its celebration to Friday or Monday.
They can also do so to extend the long weekend. For example, if a non-working celebration falls on a Thursday, the government can declare the next day, Friday, an additional holiday for a four-day weekend.
The existence and frequent occurrence of long weekends is one of the impacts Philippine holidays have on business and EOR operations.
Significance of Philippine holidays in local life
These celebrations go beyond providing employees with well-deserved days off and rest. They play a critical role in Filipino life, fostering the following:
- Cultural preservation. Many holidays, especially local observances, celebrate patron saints, traditional festivals, or historical events unique to a specific region.
- Religious observance. The Philippines is a predominantly Catholic country, with many holidays tied to religious celebrations, giving Filipinos the opportunity to practice their faith.
- Family and community. Filipinos place a high value on family and social bonds. Holidays are prime time for reunions, gatherings, and shared experiences
- National identity. National holidays such as Independence Day or Rizal Day commemorate the country’s fight for freedom and its heroes, instilling a sense of national pride.
- Local economic boost. Filipinos travel domestically, spend on food and celebrations, and participate in festivals during holidays, boosting tourism and local businesses.
Impact of Philippine holidays on EOR operations
Although holidays play a critical role in enhancing employee welfare and mental health, they introduce some challenges to EOR operations.
To better understand how local celebrations affect these service providers, let’s first answer the question: what are employer of record services?
A type of business process outsourcing (BPO), EOR involves delegating specific processes to a third-party company. These functions include payroll processing, benefits administration, and workforce management. Reducing administrative burdens is one of the most known employer of record benefits.
Onboarding with employer of record firms is a strategic alternative to establishing a subsidiary in the Philippines, which requires careful planning and significant investment. The employer of record acts as a company’s legal employer for its Filipino workforce, handling all aspects of human resource (HR) processes.
How do Philippine holidays affect EOR operations?
Payroll processing and adjustments
Philippine regulations mandate premium pay for non-working holidays, which typically change yearly. For example, the Philippine Department of Labor and Employment (DOLE) released a guide for 2024 holiday pay, which states:
- On regular holidays, employees receive 100% of their daily wage without working.
- Working on a regular holiday earns employees their holiday pay plus daily wage.
- If a holiday falls on a rest day and the employee works, they get an extra 30% pay on top of the 200% holiday wage.
- Special (non-working) holidays follow the “no work, no pay” policy.
- Employees working on holidays get an extra 30% of their basic wage for the first eight hours.
- Overtime on regular and special holidays earns an additional 30% of the hourly rate.
The impact of Philippine holidays on EOR payroll operations mainly revolves around these adjustments.
EOR firms stay up-to-date with such labor laws in BPO while keeping up with presidential declarations. They utilize legal and government resources, have documented procedures, and conduct regular audits to ensure compliance.
Overpayment, underpayment, and processing delays can lead to legal issues. For accurate and timely payments, EOR providers leverage automated software that identifies holidays, calculates premium pay, and generates reports.
Operational planning and management
The strategic placement of Philippine holidays opens opportunities for long weekends, which employees often always take. As Filipino staffing declines, this can disrupt international business workflows.
Thus, EOR firms must find workarounds to ensure that their clients have adequate staff. They must understand their client’s staffing needs and develop a holiday plan. This step involves identifying critical tasks and scheduling essential staff.
They can also develop contingency plans in case essential employees are unavailable during holidays. These strategies might involve cross-training, temporary staffing, and flexible work arrangements.
Most importantly, EOR providers clearly communicate holiday schedules, potential staffing limitations, and contingency plans to both clients and employees.
The bottom line
The impact of Philippine holidays on EOR operations involves compliance, payroll adjustments, and operational planning. While these might seem simple to navigate, constant regulatory changes and government discretions can cause unexpected challenges.
EOR firms can strike a balance between respecting local traditions and maintaining operational excellence through adequate preparation. By maintaining transparency and using their resources, they can easily navigate the challenges Philippine holidays present to their processes.
Let’s connect if you want to learn more about EOR services in the Philippines.
