Labor Secretary Silvestre Bello III said Thursday the Department of Labor and Employment (DOLE) is looking into the possible deferment of granting 13th month pay to workers.
According to Bello, postponing the release of 13th month pay could be a better option for workers than exempting COVID-19 hit companies and businesses from giving the mandated bonus compensation.
“Instead of not paying, why don’t we just consult labor and management so they could agree on deferment, let’s say give the benefit next year or next month,” Bello noted.
“For me, this is a more acceptable formula to address the issue of non-payment of the mandated benefit,” Bello said in a virtual press briefing.
The DOLE chief explained that under the law, commercial establishments classified as distressed are exempted from granting their workers with 13th month pay.
However, Bello noted that the scope and meaning of a distressed establishment need to be redefined.
He believed that micro, small and medium enterprises must be exempted from paying 13th month pay. However, companies with capitalization above P1 million should still give their workers the financial benefit.
“We are still studying this, and it would be a subject of thorough discussion by both management and employees,” Bello added.
Presidential Decree No. 851 (1) Section 1 states that:
“All employers are hereby required to pay all their employees receiving a basic salary of not more than P1,000 a month, regardless of the nature of their employment, a 13th month pay not later than December 24 of every year.”
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How is 13th month pay computed?
According to Money Max, “you can compute your 13th-month pay by multiplying your basic monthly salary to the number of months you have worked for the entire year, then dividing the result to 12 months.”
For example, if your basic monthly salary is PHP 20,000 and you started working for your company last September, your 13th-month pay computation should look like this.
(PHP 20,000 x 3 months) ÷ 12 months = P5,000
Remember that your monthly basic salary doesn’t include allowances or other monetary benefits such as the cash equivalent of your unused leaves, overtime pay, premium pay, and night shift differential.