Are you planning to outsource to the Philippines? Get to know what the country's labor laws say about holiday pay, sick and vacation leaves, and 13th month pay to ensure a smooth sailing working relationship with your Filipino outsourcing staff. Many of these holidays and leaves are particular only to the Philippines.
Regular and Special Non-Working Holidays in the Philippines
Asia, it seems, has more festivals and feasts for its saints and heroes than countries in Europe and America. The Philippines, according to this infographic, has around 18 public holidays following India, which has the highest number of holidays.
In the last quarter of each year, the Philippine government would issue an annual list of regular and special non-working holidays for the following year. The number of special non-working days will depend on the president's choices.
Sometimes, the president would choose to declare the closest working day as a holiday when the official date falls on a weekend. This often extends the weekend to 3 days. In other cases, holidays and special non-working days are declared for specific provinces or regions only. For example, only Iloilo and other provinces in Panay commemorate the Liberation of Panay on March 18 each year. In 1989, President Corazon Aquino declared this day as a special holiday for the residents of this region.
If you wanted to know what the holiday list would be for next year, visit Gov.ph, the official gazette of the Philippine government, later this year. The list for 2017 can be found in this presidential proclamation.
A. Regular Holidays
January 1, 2017, Sunday – New Year's Day
April 9, 2017, Sunday – Araw ng Kagitingan
April 13, 2017 – Maundy Thursday
April 14, 2017 – Good Friday
May 1, 2017, Monday – Labor Day
June 12, 2017, Monday – Independence Day
August 28, 2017, last Monday of August – National Heroes' Day
November 30, 2017, Thursday – Bonifacio Day
December 25, 2017, Monday – Christmas Day
December 30, 2017, Saturday – Rizal Day
B. Special (Non-Working) Days
January 2, 2017, Monday – based on Proclamation No. 117
January 28, 2017, Saturday – Chinese New Year
February 25, 2017, Saturday – EDSA Revolution Anniversary
April 15, 2017 – Black Saturday
August 21, 2017, Monday – Ninoy Aquino Day
October 31, 2017, Tuesday – additional special (non-working) day
November 1, 2017, Wednesday – All Saints' Day
December 31, 2017, Sunday – last day of the year
Please note that Malacañang has declared April 28 as special non-working holiday in Metro Manila. Government offices in Manila, Makati and Pasay City will be closed on April 27 (Thursday) because of the ASEAN Summit and related meetings from April 26 to 29. (Rethink Staffing is located 500 miles outside of Metro Manila. So, it's business as usual for us.)
Meanwhile, proclamations to declare national holidays for Eid'l Fitr and Eid'l Adha shall follow after approximate dates of the Islamic holidays have been determined later this year.
How is Holiday Pay Computed?
Regular holidays have a slightly different computation from special non-working days. For starters, if your team did not work on a regular holiday, they would still get paid their daily rate plus allowances. But, when they missed work on a special non-working day, they would get nothing unless they have an agreement with the company that says otherwise.
Different Types of Paid and Unpaid Leaves
In the Philippines, employers are legally mandated to provide at least 5 days of service incentive leave (SIL) with pay. It's not specifically vacation leave, but if a company already provides vacation leave with pay whether it's 5 days or 15 days, the company doesn't have to provide an additional 5-day service incentive leave. Businesses have the freedom to decide how many days they would give to their employees as sick and vacation leaves, provided they ensure each worker has at least 5 days of paid SIL.
In addition to sick and vacation leaves, employees also enjoy 120 days of maternity leave and 7 days of paternity leave. For single parents, they are now eligible to have 7 days of parental leave to take care of their children. Single parents must present their Solo Parent Identification Card or documentation from DSWD to their HR Manager.
Other organizations provide 6 months of rehabilitation or study leave. Rehabilitation leave is for employees who needed an extended period of recovery after sustaining an injury while on duty. And, a study leave is for employees who needed time to review for a bar or board exam, or to take a sabbatical for their Master's degree or PhD.
Other types of leaves available for women in the Philippines include a leave for victims of violence against women and their children. Female employees who were victims of violence as defined by Republic Act No. 9262 are entitled to 10 days of paid leave. Women also receive Special Leave Benefits equal to 2 months of paid leave. This is for women following a surgery caused by gynecological disorders as stipulated in the Magna Carta for Women.
Converting Leave Credits to Cash
Another thing you need to know is that 5 days of unused service incentive leave can be converted into cash. When employees are not able to use up their leaves by the end of the year, they may choose to convert 5 days of service incentive leave into cash equivalent to their daily rate multiplied by five, or carry it forward. If the employee chooses to commute his or her leave credits, then that person accumulates 10 days of SIL in the following year.
What is 13th Month Pay?
Perhaps, the Philippines is the only country that has a legally mandated end-of-year bonus known as 13th Month Pay. In December, all employees receive this extra pay, which is equivalent to 1/12 of the employee's total earnings for that year. Even if an employee only worked for one month for the company, he or she receives one-twelfth of the total salary paid to him or her.
Why You Shouldn't Worry About Paying Extra
It's worthwhile for you to learn about the types of paid and unpaid leaves that your Filipino staff may file any time. Some businesses that outsource to the Philippines choose to pay these leaves in appreciation for the hard work shown by their staff.
When you partner with an outsourcing provider, however, you don't need to worry about these leaves. All expenses related to hiring staff from the Philippines have been accounted for by outsourcing companies. That's why reputable service providers often quote higher-than-average rates. A mid-level pricing range is much more sustainable than cheap or unbelievably low rates.