Private employers who will not pay 13th month benefit are liable to money claim cases from aggrieved employees, Labor Secretary Rosalinda Baldoz warned on Wednesday.
Baldoz reminded employers to release the 13th month benefit on or before December 24, adding that employers should give it earlier “to avoid the rush.”
“The 13th month pay must be paid on or before 24 December of every year. This year, the 24th of December falls on a Tuesday, so employers may pay their workers the 13th month benefit on this day, but I urge them to pay earlier to avoid the rush,” Baldoz said.
The 13th month pay is mandated under Presidential Decree (PD) 851 and its implementing rules and regulations.
As defined by the law, the 13th month pay is the 1/12 of the basic salary of an employee within a calendar year, which includes all remunerations or earnings paid by an employer to an employee for services rendered, but may not include cost-of-living allowances (COLA), profit-sharing payments, cash equivalents of unused vacation and sick leave credits, overtime pay, premium pay, night shift differential pay, holiday pay, and all allowances and monetary benefits which are not considered, or integrated as part of the regular or basic salary of the employee.
Meanwhile, she clarified that employers may pay their employees one-half of their 13th month benefit before May or June, which the remaining one-half will be paid on or before December 24.
“If not paid after this date, the 13th month pay becomes due and demandable,” she said.
For rank-and-file employees in the private sector, they are entitled to the 13th month pay, regardless of their position, designation or employment status, and irrespective of the method by which their wages are paid.
The only condition however is that rank-and-file employees should have worked for at least one month during the calendar year.
Citing the Labor Code, Baldoz said that employers are required to report of compliance to their nearest DOLE regional offices not later than January 15, annually.
To date, the secretary revealed that the compliance of business establishments with payment of the 13th month benefit has “tremendously increased” over the last three years.
“From 88.23 percent in 2011, compliance with payment of the 13th month benefit shot up to 94.76 percent in 2012, and to 94.92 percent as of October of 2013,” she revealed.