The Thirteenth Month Pay (13th Month Pay)

Every time the  “ber” months are nearing, employees rejoice not just because of upcoming Christmas time but because it already signifies the month of giving the 13^th month pay which is a core labor standard in the Philippines. It is statutory that is why the employers are always reminded to release this benefit not later than 24^th of December of every year.

According to the Labor code, it is the 1/12 of the basic salary of an employee within the calendar year. ½ of the salary includes all remunerations or earnings paid by an employer to the employee for the services the latter rendered and may also include  allowances or monetary benefits which are considered  or integrated as part of the regular or basic salary. Examples of earnings that may not be included in the basic salary are : cost of living allowances, profit-sharing payments, cash equivalent of unused leave credits, overtime pay, premium pay , night differential, holiday pay, etc. Please note however, that in some companies they do include these in the computation of the 13^th month pay because of the result of collective bargaining agreement, this had been the practice since time immemorial and cannot be changed as changes may result to diminution of benefits or because of management prerogative.

All rank and file employees are entitled to 13^th month pay provided they have served the company for at least one month.

Report of Compliance

Per law, every employer must submit a report to DOLE Regional Office not later than January 15 of each year. It is called Report on compliance with PD No. 851.

Included in the said report is the following:

1. Name of establishment
2. Address
3. Principal product or business
4. Total employment
5. Total number of workers benefited
6. Amount granted per employee
7. The total amount of benefits granted
8. Name, position and telephone number of the person giving the information