A LABOR agency executive has reminded private employers that they must distribute the mandatory 13th month pay to their employees on or before December 24, 2023.
Director Lilia Estillore of the Department of Labor Employment Central Visayas (DOLE 7) said in an interview with SunStar Cebu on Friday, December 1, that companies should adhere to the recommended timeline and avoid any delays beyond the specified date.
"The provisions for the 13th month pay stipulate that the deadline would be on December 24, which is the latest date for compliance. However, some, especially in the government sector, may provide it as early as November 15," she said in mixed Cebuano and English.
Estillore, citing the Labor Code of the Philippines and Presidential
Decree (PD) 851, said that providing employees with a 13th month pay is not a discretionary action but a legal obligation.
The director said the 13th month pay must be extended to rank-and-file employees in the private sector, irrespective of their position, designation, or employment status. This obligation applies regardless of the method by which wages are disbursed, provided the employees have rendered at least one month of service during the calendar year.
She added that employees entitled to this mandatory benefit include those on a piece-rate basis, individuals with fixed or guaranteed wages plus commission, those with multiple employers, resigned employees, those terminated from employment, and individuals on maternity leave who received salary differentials.
Failure to comply with the 13th month pay mandate may result in penalties for employers, varying based on the violation's severity, ensuring timely compensation for employees.
Non-payment is treated as a money claims case under PD 851 rules, subjecting non-compliant employers to National Labor Relations Commission scrutiny. Private employers are urged to promptly review payroll systems, aligning with legal requirements and fostering a positive, compliant work environment.
Based on the guidelines released by Dole central office last November 23, the 13th month pay for rank-and-file employees or regular employees is straightforward, calculated as one-twelfth (1/12) of the total annual basic salary. The formula is as follows:
13th Month Pay = Total Basic Salary Earned During the Year ÷ 12
This total basic salary encompasses all salary components, such as regular allowances and other monetary benefits, excluding reimbursements, overtime pay, and nonmonetary benefits like food and lodging allowances.
For probationary employees who have not completed a full year of service, a pro-rated formula is applied:
13th Month Pay = (Total Basic Salary Earned During the Probationary Period ÷ 12) x Number of Months Actually Rendered
In order to guarantee compliance with the law, the government mandates employers to submit a report through the DOLE establishment report system by January 15, 2024.
The DOLE provincial and regional offices overseeing the establishment's jurisdiction will monitor compliance with general labor standards.
For inquiries regarding the 13th month pay, the public is recommended to contact the DOLE hotline at 1349 or 0931-066-2573 from Monday to Friday, between 8 a.m. and 5 p.m. (KJF)