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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.
AT A GLANCE
- All employers are required to pay their rank-and-file employees thirteenth-month pay.
- The 13th Month Pay Law shall apply to all employers except distressed employers, the government and its political subdivisions, employers of household helpers, and 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.
- Payment of 13th month pay likewise does not apply to employers who are already paying their employees 13-month pay or more in a calendar year or its equivalent.
All employers, except those expressly not covered by the 13th Month Pay Law, are required to pay their rank-and-file employees thirteenth-month pay, regardless of the nature of their employment and irrespective of the methods by which their wages are paid, provided they worked for at least one (1) month during a calendar year. The thirteenth-month pay should be given to the employees not later than December 24 of every year. (13th Month Pay, 2022 Handbook on Workers’ Statutory Monetary Benefits)
The law says:
“Sec. 3. Employers covered. – The Decree shall apply to all employers except to:
(a) Distressed employers, such as (1) those which are currently incurring substantial losses or (2) in the case of non-profit institutions and organizations, where their income, whether from donations, contributions, grants and other earnings from any source, has consistently declined by more than forty (40%) percent of their normal income for the last two (2) years, subject to the provision of Section 7 of this issuance;
(b) 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;
(c) Employers already paying their employees 13-month pay or more in a calendar year or its equivalent at the time of this issuance;
(d) Employers of household helpers and persons in the personal service of another in relation to such workers; and
(e) 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 this issuance insofar as such workers are concerned.”
As used herein, workers paid on piece-rate basis shall refer to those who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same.
The term “its equivalent” as used in paragraph c) hereof shall include Christmas bonus, mid-year bonus, profit-sharing payments and other cash bonuses amounting to not less than 1/12th of the basic salary but shall not include cash and stock dividends, cost of living allowances and all other allowances regularly enjoyed by the employee, as well as non-monetary benefits. Where an employer pays less than 1/12th of the employee’s basic salary, the employer shall pay the difference.” (Section 3, Rules Implementing the 13th Month Pay Law)
Report of compliance
For employers not listed above as exempted to the payment of thirteenth month pay, they shall make a report of their compliance with the 13th Month Pay Law and submitting it to the DOLE Regional Office Establishment Report System:
The law says:
“VI. REPORT OF COMPLIANCE
Every covered employer shall make a report of his compliance with the law at the nearest Regional Office not later than January 15 of each year. The report shall conform substantially with the following form:
Report of Compliance with PD 851
- Name of establishment
- Address
- Principal product or business
- Total employment
- Total number of workers benefited
- Amount granted per employee
- Total amount of benefits granted
- Name, position and telephone number of person giving information” (Payment of 13th Month Pay, Labor Advisory No. 18, Series 2018)
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