Understanding the Leave Policy in the Philippines: A Guide for Foreign Employers

Are you planning on hiring a team in the Philippines? Leave policy in the Philippines is a key component to safeguarding employee rights and ensuring compliance with labor regulations for foreign employers. This guide will help you better understand mandatory leave entitlements in the Philippines, as well as give you an overview of key market practices that you should consider. 

Overview of regulations encompassing paid leave in the Philippines 

Service Incentive Leave (SIL) – The local equivalent of paid sick and annual leave in the Philippines

The Philippines’ labor code does not officially recognize some commonly used terms such as “sick leave” and “paid vacation leave”. Instead, the country requires that employers offer Service Incentive Leave (SIL). SIL provides employees with a minimum of 5 paid days off per year, but this type of leave does come with certain eligibility clauses and limitations:

• The employee must have worked in the company for at least a year;
• Companies with less than 10 employees are not required to offer SIL;
• The company is not obligated to compensate or carry over the unused SIL.

Keep in mind that if you want to optimize your recruitment strategy in the Philippines, it is common market practice for employers to offer 15 days of SIL. While it is not legally required, prospective employees are more likely to seek employment with companies that provide this additional benefit and it is therefore highly recommended for hiring in competitive industries.

Compensating unused service incentive annual leave in the Philippines

As mentioned previously, it is at your discretion as an employer whether you choose to offer payouts or carry-over for unused annual leave. This can also be seen as an appealing incentive for prospective employees considering your hiring package. Alternatively, some employers also offer employees to accrue SIL towards a short-term sabbatical after a few years.

RecruitGo’s local recruitment experts can help you determine how best to set up your hiring incentive package in the Philippines, as well as offer you market-specific insights for planning your leave policy for hiring remote employees in the Philippines. 

Additional types of leave in the Philippines

Regulations regarding maternity leave in the Philippines 

The Philippines has a comprehensive maternity leave policy outlined in the Republic Act No. 11210, also known as the “105-Day Expanded Maternity Leave Law”, which was enacted on February 20, 2019. You must consider some of the key provisions when outlining your leave policy in the Philippines to ensure compliance with labor laws:

1. Duration: The law grants 105 days of paid maternity leave to female workers regardless of civil status, legitimacy of the child, and employment status. It applies to every instance of pregnancy, miscarriage, or emergency termination of pregnancy, regardless of frequency.
2. Additional Leave: An additional 15 days of paid leave is granted if the female worker qualifies as a solo parent under the Solo Parents’ Welfare Act of 2000.
3. Option to Extend: Maternity leave in the Philippines can be extended for an additional 30 days without pay, provided that the worker gives written notice to her employer 45 days before the end of her maternity leave.
4. Health Insurance: The law mandates the Social Security System (SSS) pay the full salary of the female worker during her maternity leave, as long as she has paid at least three monthly contributions in the twelve-month period immediately preceding the semester of her childbirth or miscarriage.
5. Paternity Leave: The law also allocates seven maternity leave days to fathers, raising the paternity leave to 14 days. Note that the father must be married to the mother to be eligible for paternity leave.
6. Miscarriage or termination: If the employee has a miscarriage or a termination of pregnancy due to a medical emergency, the employee is eligible for 60 paid days off.

Is there a bereavement leave in the Philippines?

There currently is no law in the Philippines mandating that an employer offer bereavement leave. However, due to the importance of family and social interconnectivity in Filipino culture, it is common practice for companies to include some form of bereavement leave in the employment package.

The terms, including the number of days provided and the family members for which it applies, are usually stipulated in the company’s internal policies and determined by the employer. If you aren’t sure how best to set up your optional leave policy in the Philippines, you can also partner with RecruitGo’s Employer of Record service which can provide you with pre-established employment packages.

Other mandatory types of leave in the Philippines 

Under Republic Act No. 8972, or the “Solo Parents’ Welfare Act of 2000” in the Philippines, solo parents are entitled to a parental leave of not more than seven (7) working days every year on top of leave privileges under existing laws. This benefit applies to any solo parent employee (parent with the sole responsibility of parenthood due to certain circumstances) who has rendered service for at least one year.

The Republic Act No. 9710, also known as the “Magna Carta of Women”, also has a provision called the Special Leave Benefit for Women. This is a benefit given to female employees who have undergone surgery caused by gynecological disorders. Here are some key details about the benefits:

1. Who can avail: Female employees in the public and private sectors who have rendered continuous aggregate employment service of at least six months for the last 12 months.
2. Duration: The benefit provides a special leave of up to 60 days with full pay based on the employee’s gross monthly compensation.
3. Gynecological disorders: These are disorders that require surgical procedures such as, but not limited to, hysterectomy, ovariectomy, and mastectomy.

Navigating public holidays in the Philippines as a foreign employer

Overview of the Public Holiday Calendar in the Philippines 

The Philippines currently has 30 public holidays which are divided into different categories that impact whether or not employees are entitled to paid time off or whether it is still required to work regular hours:

1. Special working holidays: Generally these have special commemorations or include festivities, however, these are considered regular working days.
2. Special non-working holidays / observed holidays: Usually held in celebration of special events or occasions. Employees are not paid if these fall outside their regular working days.
3. Regular holidays: Officially mandated holidays included in the Philippines labor code. Employees are paid for these, regardless of whether they fall on a working day or not.
4. Local holidays: In some cases, Local Government Units can declare local holidays for culturally specific celebrations within a specific community. These are usually treated as Special non-working holidays.

Date	Holiday	Type
1 January	New Year’s Day	Regular Holiday
23 January	First Philippine Republic Day	Special Working Day
7 February (tentative)	Lailatul Isra Wal Mi Raj	Local holiday
10 February	Lunar New Year’s Day	Special Non-working Holiday
25 February	People Power Anniversary	Special Non-working Holiday
28 March	Maundy Thursday	Regular Holiday
29 March	Good Friday	Regular Holiday
30 March	Black Saturday	Special Non-working Holiday
31 March	Easter Sunday	Observed Holiday
9 April	The Day of Valor	Regular Holiday
10 April	Eidul-Fitar (Tentative Date)	Regular Holiday
1 May	Labor Day	Regular Holiday
12 June	Independence Day	Regular Holiday
8 July	Amun Jadid	Local Holiday
21 August	Ninoy Aquino Day	Special Non-working Holiday
26 August	National Heroes Day	Regular Holiday
3 September	Yamashita Surrender Day	Special Working Day
8 September	Feast of the Nativity of Mary	Special Working Day
16 September	Maulid un-Nabi (Tentative Date)	Local holiday
1 November	All Saints’ Day	Special Non-working Holiday
30 November	Bonifacio Day	Regular Holiday
8 December	Feast of the Immaculate Conception	Special Non-working Holiday
21 December	December Solstice	Special Working Holiday
24 December	Christmas Eve	Special Working Holiday
25 December	Christmas Day	Regular Holiday
30 December	Rizal Day	Regular Holiday
31 December	New Year’s Eve	Special Working Holiday
Variable	Ramadan Start	Observed Holiday
Variable	Eid al-Adha (Feast of the Sacrifice)	Regular Holiday
Variable	Eid al-Adha Day 2	Local Holiday

Overtime policies in the Philippines for working during public holidays

It is important to remember that in the Philippines, working during a public holiday is considered overtime work. This, however, does not apply to special working holidays, which are considered regular working days. If an employee works on a holiday, overtime compensation is determined based on the type of holiday and the day on which it falls:

1. Regular Holidays: If an employee works on a regular holiday, they should be paid 200% of their daily rate for that day (this is often referred to as “double pay”).
2. Special Non-working Days: If an employee works on a declared special non-working day, they should be paid an additional 30% of their daily rate.
3. Work Beyond 8 hours: Work performed beyond eight hours on a holiday is subject to overtime pay.
4. If the holiday also falls on the employee’s rest day and they work: Employee should be paid an additional 30% of their double holiday pay. If the day is a special non-working day that falls on their rest day, they should be paid an additional 50% of their daily rate.

Navigating a foreign holiday calendar is a common challenge faced by international employers. If you are setting up a team in the Philippines, RecruitGo’s managed payroll service allows you to outsource payroll processing through our local experts to ensure that your employees overtime differentials are accurately calculated based on the local calendar.

Navigating peak leave periods for your employees 

In the Philippines, the majority of the population are Roman Catholic Christians, however, the country also has a significant Muslim community. As a foreign employer, unless the nature of the work prevents it, it is best practice to plan for peak leave periods and try as much as possible to accommodate these, as this has a deep cultural importance for your local teams:

1. Holy Week (March or April):
   1. During Holy Week, all government and public institutions shutter their operations, granting employees an opportunity to observe religious practices, spend quality time with family, or even take a short vacation. 
   2. The week typically falls between March and April, depending on the solar and lunar calendars.
   3. Many employees strategically take leave from Monday to Wednesday, transforming the week into an extended vacation period
2. Christmas (December):
   1. As part of the season’s festivity, employers in the Philippines typically engage in certain customary practices, which often include hosting a company-wide Christmas party, exchanging gifts (often through the popular “Monito Monita”),  and possibly even organizing outreach programs or charity events.
   2. Due to the many special non-working and working days in this period, it is common for employees to plan to leave to visit relatives and spend time with family and friends.
3. Ramadan / Eid (Varies per year)
   1. While not yet an official special non-working holiday, some local governments declare holidays during important days of this period every year,
   2. Due to the cultural significance of religious holidays, it is best practice for employers to accommodate leave requests during this period and in some cases provide work accommodations for participating employees.

RecruitGo has a strong local presence in the Philippines and our team of recruitment specialists can help you ensure compliance for your operations with local leave policies. You can also partner with our Employer of Record service, who will act as the legal employer for your remote employees in the Philippines, which allows you to manage all leave and payroll inquiries through our easy-to-use App.

Want to start hiring in the Philippines? Contact us via the form below to get in touch with one of our local recruitment specialists!