13_Thirteenth Month Pay_Statutory Monetary Benefits

THIRTEENTH MONTH PAY

• Definition

• Coverage

• Amount

• Computation

• Time of Payment

• 13th Month Pay of Certain Types of Employees

• 13th Month Pay of Resigned or Separated Employee

• 13th Month Pay of Employee on Maternal Leave

• Non-inclusion in Regular Wage

Definition (THIRTEENTH MONTH PAY)

1/12 of the total basic salary earned by an employee within a calendar

Coverage (THIRTEENTH MONTH PAY)

• all employers are required to pay their rank-and-file employee 13th month pay regardless of the nature of employment

• provided that employees worked for at least 1 month during a calendar year

• Managerial employee

  • vested with powers to lay down and execute management policies

  • power to hire, transfer, suspend, layoff, recall, discharge, assign, or discipline employees

• Rank-and-file employees

  • those who do not fit the description of managerial employees

• Employers not covered by 13th month pay compliance

  • government and any political subdivisions, except corporations operating as private subsidiaries of the government

  • employers who are already paying employees with 13th month pay even before the Presidential Decree

  • employers of household helpers and persons in personal service of another

  • employers of commission-based employees

    • where workers are paid on a piece-rate basis, the employer shall grant them 13th month pay

Managerial Employee (Coverage: Thirteenth Month Pay)

• vested with powers to lay down and execute management policies

• power to hire, transfer, suspend, layoff, recall, discharge, assign, or discipline employees

Rank-and-File Employees (Coverage: Thirteenth Month Pay)

those who do not fit the description of managerial employees

Employers not Covered by 13th Month Pay Compliance (Coverage: Thirteenth Month Pay)

• government and any political subdivisions, except corporations operating as private subsidiaries of the government

• employers who are already paying employees with 13th month pay even before the Presidential Decree

• employers of household helpers and persons in personal service of another

• employers of commission-based employees

  • where workers are paid on a piece-rate basis, the employer shall grant them 13th month pay

Amount (THIRTEENTH MONTH PAY)

• not be less than 1/12 of the total basic salary earned by an employee in a calendar

• Basic Salary

  • remunerations for services rendered

  • excluding allowances and monetary benefits, which are not considered or integrated as part of basic salary

Computation (THIRTEENTH MONTH PAY)

Total basic salary earned during the year divided by 12 months

Time of Payment (THIRTEENTH MONTH PAY)

• not later than December 24 of every year

• employer may give half of the 13th month pay before the opening of the regular school year and the remaining half on or before December 24

13th Month Pay for Certain Types of Employees

• employees paid on piecework basis are not entitled to 13th month pay

• employees paid a fixed wage plus commission are entitled to 13th month pay based on earning during the calendar year

  • computation only includes wage, not commission pay as these are considered additional pay

• employees with multiple employers

  • employees working on different enterprises (regardless if part-time or full-time) are entitled to 13th month pay regardless of their total earnings from each employer

13th Month Pay of Resigned or Separated Employee

employees who resigned or were terminated at any time before the time of payment is entitled to 13th month pay proportionate to the length of time they worked during the year from the day they started up to their resignation or termination date

• e.g., a worker who worked from January to September is entitled to 13th month pay equal to 1/12 of total basic salary earned from that period

13th Month Pay of Employee on Maternal Leave

salary differential shall be included as part of basic salary for computation of 13th month pay

Non-inclusion in Regular Wage

13th-month pay is not included in the regular wage of employees when computing for overtime and premium payments