Are you planning to outsource to the Philippines? Get to know what the country’s labor laws say about paid holidays and sick and vacation leaves. Learn what the 13th-month pay is all about. Your understanding will 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. Here’s the list of regular holidays and special non-working days for 2018.
A. Regular Holidays
January 1, 2018, Monday – New Year’s Day
March 29, 2018 – Maundy Thursday
March 30, 2018 – Good Friday
April 9, 2018, Monday – Araw ng Kagitingan
May 1, 2018, Tuesday – Labor Day
June 12, 2018, Tuesday – Independence Day
June 15, 2018, Friday – Eid’l Fitr
August 21, 2018, Tuesday – Eid’l Adha (declared by Pres. Duterte as a regular holiday)
August 27, 2018, last Monday of August – National Heroes’ Day
November 30, 2018, Friday – Bonifacio Day
December 25, 2018, Tuesday – Christmas Day
December 30, 2018, Sunday – Rizal Day
B. Special (Non-Working) Days
February 16, 2018, Friday – Chinese New Year
February 25, 2018, Sunday – EDSA Revolution Anniversary
March 31, 2018 – Black Saturday
August 21, 2018, Tuesday – Ninoy Aquino Day
November 1, 2018, Thursday – All Saints’ Day
December 31, 2018, Monday – last day of the year
C. Additional Special Non-Working Holidays
May 14, 2018, Monday – barangay and Sangguniang Kabataan elections
November 2, 2018, Friday – All Souls’ Day (by way of Proclamation No. 269)
December 24, 2018, Monday – Christmas Eve (by way of Proclamation No. 269)
How are Paid Holidays 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 would need a long period of recovery after sustaining an injury while on duty. And, a study leave is for employees who would need time to review for a bar or board exam. This is also filed by an employee who needs to take a sabbatical for their Master’s degree or Ph.D.
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 may file for 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
Here’s another thing you need to know: 5 days of unused service incentive leave can be converted into cash. When your agents 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. It doesn’t matter if an employee only worked for one month for the company. That employee will still receive 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 at any time. Some businesses that outsource to the Philippines choose to pay these leaves in appreciation for the hard work shown by their staff.
But, you don’t have to worry about these things. When you partner with an outsourcing provider, an accountant can take care of the payroll and other financial reports.
All expenses related to hiring staff from the Philippines are 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.
NOTE: This article was updated on September 19, 2018.Tags: Offshore Outsourcing, outsourcing in the Philippines, Outsourcing to the Philippines