When a US company hires an employee in the Philippines, the two countries may follow different holiday calendars. A US public holiday does not automatically give a Philippine-based employee a day off. Work on a Philippine holiday may add payroll costs; who bears them depends on the service agreement.

To avoid confusion, distinguish three things: Philippine statutory holiday entitlements, the employee's agreed work schedule, and the commercial agreement between the client and the legal employer.

This guide explains how holiday pay works, who handles each responsibility, and how to plan coverage for your Philippine team.

1. What Happens When a US Holiday Is Not a Philippine Holiday?

US public holidays do not automatically replace the Philippine holiday calendar.

For example, Thanksgiving and Memorial Day are not automatically Philippine statutory holidays. If these dates fall on the employee's agreed working days, they generally remain working days unless the employment agreement, company policy, or an approved arrangement provides otherwise.

The reverse also applies: a Philippine statutory holiday does not automatically become a working day because the client's US office is open.

How to prevent confusion: Share both countries' holiday calendars before onboarding. Identify which dates are working days, scheduled days off, and dates that may require special coverage.

2. What Happens When You Need Work on a Philippine Holiday?

Philippine labor law distinguishes between regular holidays and special non-working days. The compensation rules are different.

Under Article 94 of the Philippine Labor Code, covered employees are generally entitled to regular holiday pay, subject to eligibility requirements and statutory exceptions. (source)

For covered employees who work on a regular holiday, the general rate for the first eight hours is 200% of the regular wage.

For work on a special non-working day, the general rate is 130% of the basic wage for the first eight hours. If the holiday falls on the employee's scheduled rest day, a higher premium generally applies. Overtime work also has separate computation rules.

These are general statutory rates, not universal calculations for every employment situation. Eligibility, holiday classification, rest-day schedules, overtime, and applicable exemptions can affect the final amount.

Official references:

• DOLE – Book III: Conditions of Employment
• NWPC – Workers' Statutory Monetary Benefits Handbook
• DOLE – Labor Advisories

Who pays the additional cost? The legal employer is responsible for administering the employee's statutory compensation. Whether the client reimburses or pays additional holiday-related costs depends on the service agreement. If your agreement provides for these costs to be passed through, confirm the amount and approval process before requesting holiday work.

3. Who Handles Holidays: Client or Montani?

Holiday management involves both operational planning and employment administration.

• Client: Identifies business coverage requirements, coordinates operational schedules, and communicates whether holiday work is needed, subject to the employment arrangement.
• Montani: As the legal employer, administers employment-related requirements, maintains official leave records, and handles applicable payroll and statutory holiday obligations.

Employees should follow the agreed client communication process and Montani's HR and leave procedures.

A client instruction cannot remove an employee's statutory entitlement. If a requested work arrangement conflicts with Philippine labor requirements or the employment agreement, the applicable legal and contractual requirements must take precedence.

4. How Should You Plan Holiday Coverage?

Document the holiday arrangement before the employee's first shift. Include these six decisions:

1. Applicable calendar: Share the Philippine statutory holiday calendar with the client and employee.
2. US holiday expectations: Identify US holidays that remain normal working days under the agreed schedule.
3. Holiday work requests: Specify who can request and approve holiday work. Confirm payroll implications before approval.
4. Backup coverage: Assign another team member or agree to adjust deadlines when the employee is unavailable.
5. Project deadlines: Check delivery dates against both holiday calendars before making commitments.
6. Handoff procedures: Require a short update before planned time off, covering completed work, pending tasks, and next steps.

Review the calendar when the Philippine government announces new or updated holiday dates. Use the applicable year's DOLE wage advisory rather than relying on an outdated holiday-pay guide.

How Montani Helps Manage Philippine Holidays

Montani separates client operations from employment administration. Clients coordinate business priorities and coverage requirements, while Montani handles employment-side administration, including official leave records and applicable payroll procedures.

When a client requests holiday coverage, Montani coordinates the relevant employment and payroll requirements under the applicable arrangement. Any additional client charges should be confirmed in advance under the service agreement.

Planning both calendars early helps prevent unexpected costs, missed deadlines, and confusion about employee availability. A clear holiday policy supports business continuity while respecting the employment rights of your Philippine team.