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Are you entitled to 13th month pay? Some questions answered

November 23, 2018

December is around the corner. It’s the time of the year again. Are you entitled to 13th month pay? Let’s discuss below.

First off, it is mandatory.

13th-month pay is mandatory in the Philippines. Some thought of it as a “bonus”. Technically, it is not a bonus but a requirement of law. In fact, there is a special law for 13-month pay – Presidential Decree No. 851 also known as the 13th-month Pay Law.

In a nutshell, 13th month is an amount to be given by an employer to his or her employee every December of a year. It is given once a year.

Here are some things to remember when we speak of 13th-month pay in the Philippines:

Who are entitled to 13th Month Pay?

All rank and file employees regardless of their designation or employment status who have worked at least one month during the calendar year are entitled to a 13th-month pay.
The 13th-month pay shall be in the amount not less than 1/12 of the total basic salary earned by the employee.

 Who are entitled to 13th month pay

How much should a 13th-month pay be?

The 13th-month pay shall be in the amount not less than 1/12 of the total basic salary earned by the employee within the Calendar day.

I could give a sample computation on my own but I prefer to give the computation coming from the National Wages and Productivity Commission which they shared to the public on Facebook last November 24, 2018:

Sample computation of the 13th-month pay from the National Wages and Productivity Commission

Note that the COLA is not included in the computation. (COLA, by the way, is no longer used in the new minimum wage rates imposed in the National Capital Region effective November 22, 2018). Likewise, allowances and all other benefits not included. The keywords to take note here are “total basic salary”. Also, overtime pay is not included in the computation of the 13th-month pay.

When should it be paid?

It should be paid no later than December 24 of every year.

Is it okay for the 13th Month Pay to be paid separately from the regular salary?

Yes. The 13th-month pay can be paid together with the regular monthly or bi-weekly salary. It can also be paid separately from the regular payroll.

What is/are the consequences when an employer fails to pay for the 13th-month pay?

The employer can be held liable

What should an employee do if he or she is not paid his or her 13th-month pay?

An employee may demand this monetary claim from his or her employer and go to DOLE to complain.

What about managers and supervisors?

Sorry, they are not entitled to receive the monetary benefit, technically.

For example, an HR Manager is a managerial employee. As such, under the law, he or she is not entitled to receive the 13th-month pay. But, the employer can give the HR manager a “13th month” out of generosity. Note that managerial employees are not entitled to a 13th-month pay. However, if the establishment or the company has been giving 13th-month pay to these kinds of employees for a long time, it becomes customary and can ripen into a company practice which cannot be taken away arbitrarily.

What about Kasambahays (house help) and yayas, are they entitled to 13th month pay?

Yes.

What if I resign within the year, can I still get the 13th month?

Yes, if you are a rank and file employee who suffered work for at least a month. Example: If you have a monthly basic salary of 13,600 and had worked for an entire year, then the13th-month pay you should receive is 13,600. Remember, however, that if you have absences, the monetary benefit will be lesser because 13th-month pay is computed pro-rata.

More questions coming…

Can I get my 13-month pay even when I am only paid on a commission basis?

All rank-and-file employees who have worked for at least one (1) month during the calendar year, are entitled to receive 13th-month pay regardless of the nature of their employment and irrespective of the methods by which their wages are paid.

All employees not considered managerial employees are considered rank-and-file employees. A managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions.

Am I still entitled to 13th month pay even when I’m paid on a monthly basis?

Could be and could be not. If you are a rank and file employee and has worked for at least 1 month, please refer to the answer above.

How about employees who have gone suddenly on AWOL and showed up only to claim their 13th month. Are they entitled to it?

Can you deduct the tardiness (“lates”) and absences of the entire year from the 13th-month pay?

It’s not technically being “deducted” but tardiness and absences are considered in the computation of the 13th month. To reiterate, the computation of the 13th month is “pro-rated”. Meaning, it is in proportion to what you have “actually” worked. So, let’s just do a quick, quick example: If you worked for only 8 months total and you were absent for 1 month out of these 8, then your 13th month pay computation will only consider your 7 months of work, that is 8 months minus 1 month that you have been absent without pay.

How about those who availed of the maternity leave benefits?

Maternity leave is likewise not included in the computation of the 13th-month pay. During the maternity leave, you technically did not render work even when you receive the benefit and the money from the SSS. Hence, it’s not a factor in the computation.

Why is there a reduction of 13 months pay for tardiness and absences when this tardiness and absences were already deducted from my salary before? This tardiness and absences were deducted from my salary already, you can see them from my paycheck!

Yup. Of course. Your deductions for tardiness and lates must be reflected in your pay check every. single. time. But no, this is NOT double deduction. Why? Because, the computation of the 13th month pay does NOT say, “it is in proportion to all days worked minus the lates and absences” like what others understand it to be. There is a 13th Month Law and it defines 13 Month pay as:

“Thirteenth-month pay” shall mean one twelfth (1/12) of the basic salary of an employee within a calendar year.

Formula and computation of 13th-month pay:

Total basic salary earned during the year divided by 12 months = proportionate 13th-month pay.

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