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Employees are looking forward to extra money now that the holiday season is fast approaching, and they’re raring to celebrate and buy gifts for loved ones.
Many workers are entitled to 13th month pay, a mandatory benefit that employers must provide to their employees not later than December 24 of every year.
This has been the law since 1976, when then President Ferdinand Marcos issued Presidential Decree 851 mandating its release.
The 13th month pay is different from the Christmas bonus, which is a voluntary benefit on the part of employers.
Are you qualified for it?
The implementing rules of the decree state that employers are required to provide 13th month pay to all their employees regardless of their position, designation or employment status, and irrespective of the method by which their wages are paid, as long as they have worked for at least one month.
The 13th month pay refers to 1/12 of the basic salary of an employee within a calendar year. The basic salary refers to remuneration paid by an employer, and may not include allowances, profit-sharing payments, and other benefits not integrated into the salary.
Excused employers
But some employers are excused from providing the 13th month pat, according to implementing rules and regulations of the presidential decree.
These are:
Distressed employers– These refer to those who are incurring substantial losses, or non-profit institutions and organizations whose income from donations, contributions, grants and other earnings has consistently declined by more than 40 percent of their normal income for the last two years.
The government and any of its political subdivisions– These include government-owned and controlled corporations, except those corporations operating essentially as private subsidiaries of the government
Employers of household helpers and persons in the personal service of another in relation to such workers
Employers of those who are paid purely on commission, boundary, or task basis, and those paid a fixed amount for performing specific work, except where the workers are paid on piece-rate basis in which case the employer shall be covered by the law.
For distressed employers to qualify for the exemption, they must have prior authorization from the Labor Secretary. They could file a petition for exemption with the nearest regional office.
The government also has a facility to help small businesses affected by the pandemic to cover the 13th month pay of their workers.
Last year, Labor Secretary Silvestre Bello III advised micro and small businesses to apply for a loan with the Small Business Corporation so that they could provide the 13th month pay to workers.
Its loan program could cover up to 40 employees per businesses, and the loanable amount is P12,000 per employee. The loan has zero interest rate, no collateral requirement, and is payable in 12 months.
When will you get your 13th month pay?
The law states that covered employers may already pay half of the 13th month pay before the opening of the regular school year.
This will help parents with the payment of tuition and other school fees and requirements.
The other half could be pid on or before December 24 of the same year.
Companies and workers’ unions may also work out when the 13th month pay would be given.
Follow the law
Employers are required to submit their 13th month pay compliance report to the nearest DOLE regional office not later than January 15.
Failure to pay the 13th month pay would be treated as money claims cases and processed in accordance with the rules implementing the Labor Code of the Philippines and the Rules of the National Labor Relations Commission.
