13th Month Pay Is Mandatory

The Department of Labor and Employment (DOLE) yesterday reminded employers in the private sector that all wage and salary workers are entitled to the 13th month pay as mandated by law.


To this effect, Labor and Employment Secretary Rosalinda Dimapilis-Baldoz, issued Department Advisory No. 03, series of 2010, citing Section 8 of Presidential Decree No. 851 which required employers to pay their employees a 13th month pay on or before December 24 of every year.

Baldoz said every covered employer shall make a report of his compliance with the Decree to the nearest DOLE Regional Office not later than January 15 of each year, adding that the report shall conform substantially to the following form contents:

(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) Total amount of benefits granted
(8) Name, position and telephone number of person giving information

The Labor and Employment chief said that while the law definitely requires employers to pay their rank-and-file employees 13th month pay, the generous granting of a Christmas bonus on the other hand remains basically a management prerogative.

Baldoz reiterated that the Christmas bonus is not a part of such benefit as mandated by law, though employers may also grant their workers bonuses on top of the 13th month pay, depending on their discretion, or collective bargaining agreement (CBA) and other agreements.

Meanwhile, the DOLE’s Bureau of Working Conditions (BWC) has clarified the salient provisions of PD 851 requiring all employers to pay their employees a 13th month pay.

The BWC, which is the DOLE’s agency administering the country’s laws on working conditions, said that the 13th month pay which all employers are required to pay their employees, must not be less than one-twelfth (1/12) of the total basic salary earned by an employee in a calendar year.

While all employers are required to pay their employees the 13th month pay not later than December 24 of every year, an employer may, however, give to his or her employees one-half (1/2) of it before the opening of the school year and the remaining half on or before December 24.

For this purpose, the frequency of payment of the monetary benefit may be the subject of an agreement between the employer and the recognized collective bargaining agent of the employees, the BWC stressed.

“Any query on this story, please dial the Bureau of Working Conditions at trunk line 527-3000, local 302.”