Presidential Decree 851 mandates all private employers to pay their employees receiving a basic pay of not more than P1,000 a month, regardless of the nature of their employment, a 13th month pay not later than Dec. 24 of every year. The pay shall be equivalent to 1/12 of the basic salary of the employees within a calendar year on condition that they have worked for at least one month in the said year.
Recipients of the 13th month pay are rank-and-file employees only. The decree exempted employees of government offices and government-owned and -controlled corporations (GOCCs), except those operating as private subsidiaries of the government.
When President Corazon Aquino came to power in 1986, she removed the P1,000 salary ceiling and made the additional pay applicable to all employees regardless of their monthly salary and employment status. Like her predecessor, Aquino did not extend that privilege to government and GOCC employees.
In 1988, Congress enacted Republic Act 6686 which gave all employees of the national government who have rendered at least four months of service from Jan. 1 to Oct. 31 of each year and who remain in the service as of Oct. 31 of the same year a Christmas bonus equivalent to one-month basic salary and additional cash gift.
If the government employee does not meet the required months of service, the cash gift is proportionately reduced depending on the actual months of service.
Two years ago, the Department of Budget and Management approved the P5,000 increase in cash gift for government employees.
As to the controversies and issues raised by pro-labor groups and the affected employees, Labor Secretary Silvestre H. Bello III issued Labor Advisory 28, s. 2020 containing the guidelines on the payment of the 13th month pay.
Businesses, companies and establishments that have folded up due to the Covid-19 pandemic are still mandated to grant their workers final pay, which includes the 13th month pay.
The coverage of the 13th month pay is for all rank-and-file employees in the private sector regardless of their position, designation, or employment status, and method by which their wages are paid, provided that they have worked for at least one month during the calendar year.
The minimum 13th month pay required by law shall not be less than 1/12 of the total basic salary earned by an employee within a calendar year. (Total basic salary earned during the year divided by 12 months is equal to the proportionate 13th month pay). This minimum amount shall be provided without prejudice to company practice and policy, employment contract or collective bargaining agreement.
Private sector workers who did not receive their 13th month pay in December should report their employers to the DOLE through hotline: 1349, the Bureau of Working Conditions at (02)852-7300 ext. 301 or 307. For DOLE-CAR, you can call (074) 443-5338, (074) 424-0824 or call or text 0945-803-6321, 0921-931-9564.
The 13th month pay is a core labor standard.
Private sector employers are required to file a report of their compliance to the nearest DOLE office not later than Jan. 15 of each year. The report shall conform substantially with the following: name of establishment; address; principal product of business; total employment; total number of workers benefitted; amount granted and name, position and telephone number of person giving information.
Failure by employers to give their workers their 13th month pay could result in an administrative action from the DOLE.
END/Patrick T Rillorta