Published — July 1, 2022
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
After reading “Who are entitled to and are exempted from 13th month pay?”, read also “What is the Rationale for the Implementation of the 13th Month Pay Law?”
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The 13th month pay represents an additional income based on wage but not part of the wage.
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The 13th month pay is equivalent to one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year.
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All employers are required to pay all their rank-and-file employees their 13th month pay not later than December 24 of every year.
The 13th-month pay mandated by Presidential Decree (P.D.) No. 851 represents an additional income based on wage but not part of the wage. It is equivalent to one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. (Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union-NLU, G.R. No. 188949, July 26, 2010)
Who are entitled to 13th month pay?
Under the law, all employers are required to pay all their rank-and-file employees their 13th month pay not later than December 24 of every year. Only rank-and-file employees, regardless of their designation or employment status and irrespective of the method by which their wages are paid are entitled to the 13th month pay benefit.
The law says:
All rank-and-file employees are now entitled to a 13th month pay regardless of the amount of basic salary that they receive in a month if their employers are not otherwise exempted from the application of P.D. No. 851. Such employees are entitled to the benefit regardless of their designation or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one (1) month during a calendar year. (No.1, Revised Guidelines on the Implementation of the 13th Month Pay)
Who are the employers exempted from the coverage of the 13th month pay law?
- The government and any of its political subdivisions, including government-owned and controlled corporations, except those corporations operating essentially as private subsidiaries of the government. (No. 2(a), Revised Guidelines on the Implementation of the 13th Month Pay Law)
- Employers already paying their employees 13th month pay or more in a calendar year or its equivalent at the time of the issuance of the Revised Guidelines. (No. 2(b), Revised Guidelines on the Implementation of the 13th Month Pay Law)
- Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis, in which case, the employer shall be covered by the Revised Guidelines insofar as such workers are concerned. (No. 2(d), Revised Guidelines on the Implementation of the 13th Month Pay Law)
It is important to note that, previously, employers of household helpers and persons in the personal service of another in relation to such workers were not covered by the 13th month pay law. However, under Republic Act No. 10361 or the Domestic Workers Act or Batas Kasambahay, it is now explicit in its commandment that a domestic worker or kasambahay is entitled to 13th month pay as provided by law.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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