I received this question today:
"During this holiday are we obligated to pay our employees?"
This Christmas season of 2009, the Government declared several special holidays in addition to the regular holidays on December 25, 30, and January 1. These are December 26, 29 and 31. It is possible that other "sandwiched" working days could be declared as well.
Here's a typical advisory from the Department of Labor and Employment on how to treat holidays in terms of pay:
"Employees covered by the holiday pay law shall be paid their regular daily wage during the holiday even if no work is rendered provided that they are present or on leave of absence with pay on the working day immediately preceding the regular holiday.
Employees who are required to work on a regular holiday shall be paid compensation equivalent to twice their regular rate or a total of 200%, that is 100% of their basic wage plus 100% holiday pay. (Let me add that employees who are made to work during special holidays should be paid 30% more on top of their regular rate according to the labor code and other advisories)
For work in excess of eight hours, the employees are entitled to overtime pay of at least 30% on top of their 200% salary rate or a total of 260% per overtime hour.
If employees are required to work on a regular holiday that falls on their scheduled weekly rest day, they shall be paid additional compensation or premium pay of 30% of their holiday rate of 200% or a total of 260% for an eight-hour work on that day.
If the employees work beyond eight hours on a regular holiday which happens to be their scheduled rest day, they are entitled to an overtime pay of at least 30% on top of the 260% salary rate or a total of 338% per overtime hour.
Exempted from the holiday pay law are managerial employees, field personnel, and employees in the retail and service establishment regularly employing less than 20 workers."
Going back to your question, if your employees do not fall under the exemptions set by the government, you are obligated to pay your employees accordingly during the holidays. Let me add some personal inputs to this. The government has a reason for exempting smaller companies that employ fewer employees. This is because they might not be able to afford it without the revenue due to slowdown or stop in productivity. If you are too saddled to afford the pay, then you have the law behind you if you opt not to pay. I like to say however that employers should strive to afford this especially in this month when the season's demand for money is higher and the number of holidays if not paid will have serious impact on their finances. Paying them would be the best goodwill you can give your employees. You know what I mean.
I don't want to sound self-righteous here but let me report that despite having less than 10 employees and being affected by the economic crunch, our employees are going to get complete compensation during the holidays. I believe that mindful leaders should foresee situations like this and take pains to adjust their business strategies to make some accommodations.
I hope this helps.