13th month pay

In the midst of the challenges brought about by the coronavirus disease 2019 (Covid-19) pandemic, the 13th month pay of workers in the private sector remains a legal obligation by the employers, as mandated under Presidential Decree 851.
To give a clear definition of what the 13th month pay is, it is a mandatory compensation that is provided to rank-and-file employees by the end of the calendar year. It was passed into law on December 16, 1975 after President Ferdinand Marcos signed Presidential Decree No. 851.
Under the Thirteenth Month Pay Law or Presidential Decree 851, rank-and-file employees in the private sector shall be entitled to 13th month pay regardless of their position, designation, or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one month during the calendar year.
The Labor Code of the Philippines distinguishes a rank-and-file employee from a managerial employee,
who is vested with powers of prerogatives to lay down and execute managerial policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign, or discipline employees or to effectively recommend such managerial actions. All employees falling within this definition are considered rank-and-file employees.
The following employers not covered by PD 851 are government and any of its political subdivisions, including government-owned and controlled corporations, except those corporations operating essentially as private subsidiaries of the government; employers already paying their employees 13-month pay or more in a calendar year of its equivalent at the time of this issuance; employers of household helpers and persons in the personal service of another in relation to such workers; 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, 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.
So, not to confuse the 13th month pay which is a mandatory obligation of employers to the rank-and-file employees, a Christmas bonus is not an enforceable obligation and can only be released at the employer’s discretion. They are usually issued to show appreciation and gratitude to employees for their services and hard work during the year.
As long as you know your basic salary, it will be easy to figure out how much money you’ll be getting when your 13th month pay kicks in.
The formula for getting your 13th month pay is simple and straightforward: Total basic salary earned during the year divided by 12 months equals the Proportionate 13th month pay.
Let’s say you earn P25,000pesos a month. If you rendered service for the entire year, then you’ll get the full P25,000 pesos as your 13th month pay. If you weren’t with your company for the entire year, then your 13th month pay will be a percentage of how many months you were able to achieve with the company.
For employees who resigned this year, as long as you were able to render at least a month’s worth of service to the company. If you were only able to work with your previous employers for only a month before you left, you will be getting your pro-rated 13thmonth pay alongside your final pay.
The sad news here is managers and supervisors looking to get their 13th month pay may have to hold their breath as the law doesn’t cover them. However, it’s up to the company’s discretion if their managers will also receive this pay.
Employees and workers who did not receive their 13thmonth pay on or before Dec. 24th this year can call the DOLE 24/7 hotline at 1349 to file a complaint against the employer.
To know more of DOLE programs and services, visit www.dole.gov.ph and the DOLE 24/7 hotline 1349; Action line Against Human Trafficking 1343 and for OFW concerns hotline 1348