Update on DOLE Guidelines over 13th Month Pay of Private Sector Employees
13TH MONTH PAY – The Department of Labor and Employment (DOLE) issued a reminder for employers to release the year-end pay on or before December 24.
It is the last month of the year once again and many working individuals are surely excited to receive their Christmas Bonus and their year-end pay. In most cases, the money is used for the holiday expenses such as the Christmas and New Year celebrations of the family.
Individuals who are working in the government will receive their 14th month pay while those who are employed in private companies are entitled to a 13th month pay which is different from the Christmas bonus. The latter depends on the generosity of the company or employer.
Usually, the company owners or employers depend on the performance of the company in the giving of Christmas bonus to their workers. Meanwhile, there are also a lot of cases when even struggling companies give a Christmas bonus for their employees which is already a sort of appreciation for their hardwork and loyalty regardless of the business’ status.
While the giving of Christmas bonus is optional, the release of the 13th month pay is mandated under the law, the Presidential Decree No. 851. Employees in the Philippines who have worked for at least a month in the company, regardless of their ranks, are entitled to receive a year-end pay.
How much is the year-end pay? It is equivalent to at least 1/12th of the employee’s total basic salary for the entire year. You can add all the basic salaries you received from January to December or since you started in your current company and divide the sum by 12.
Recently, the Department of Labor and Employment (DOLE) issued a reminder for employers with regards to the 13th month pay of their employees. Based on a report on PhilStar, the labor department reminds the employers to release the yearend pay of the workers on or before December 24.
DOLE chief Bienvenido Laguesma stressed that the on-time releasing of the 13th month pay of the employees in the private sector is a non-negotiable right for Filipino employees. According to him, it is an important way to support the workers during the holiday season.
“The 13th-month pay is a statutory right of workers. Employers must ensure timely and full compliance, as this benefit is crucial in supporting Filipino families during the holiday season,” the DOLE Secretary said.
Based on the report, Laguesma clarified that the computation of the 13th month pay does not include overtime, unused leave credits, holiday pay, as well as cost-of-living allowances. Meanwhile, they may be included depending on agreement within the company.
Are you wondering if resigned and terminate employees are entitled to receive a 13th-month pay?