Ian Alfredo Magno
AND so it begins again – the longest Christmas in the world. September marks the beginning of the “ber” months. This, to Filipinos, signals the start of the yuletide season – really. Christmas carols and tunes are heard being played on the radio, and most likely in the television, too. Christmas trees and decors are pulled out from dusty boxes at the stowage, get cleaned up and finally displayed in full view once more. And it gets to stay even after Christmas – that is until and up to the feast of the “three kings,” which Filipinos are likewise fond of.
Indeed, Christmas is in the air.
To employees, it ultimately signals the approach of the awaited thirteenth-month pay. Presidential Decree No. 851 defines thirteenth-month pay as one twelfth (1/12) of the basic salary of an employee within a calendar year. Meanwhile, basic salary includes remunerations or earnings paid by an employer to an employee for services rendered but may not include cost-of-living allowances, profit-sharing payments, cash equivalent of unused vacation and sick leave credits, overtime pay, premium pay, night shift differential, 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.
Who are entitled to this benefit? Labor Advisory No. 12, series of 2013 provides: “Rank-and-file employees in the private sector shall be entitled to 13th month pay regardless of their position, designation, or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one month during the calendar year.”
On the other hand, some personnel are not entitled to this benefit, namely: those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof.
An employee, who resigned or was terminated before the time for payment of the 13th month pay, is entitled to such benefit in proportion to the length of time he worked during the year. It will be reckoned from the time he started working during the calendar year up to the time of his resignation or separation/termination therefrom. How is it computed? The formula for deriving the proper amount of the 13th month pay is, “total basic salary earned during the year divided by 12 months. That’s basically it.
Some employers release this cash benefit way earlier than other companies. Nonetheless, it must be paid not later the 24th of December of every year. Yes, it could be given earlier, but not later than Dec. 24. At the option of the employer, it may also choose to give its employees one-half of the 13th month pay before the opening of the regular school year, and the remaining half on or before Dec. 24 of every year.
Pursuant to Presidential Decree 851, the 13th-month is a mandatory benefit, which employers are required to provide. However, those employers who are already giving bonuses equivalent to the 13th month pay or more than the amount mandated by law, such bonuses may be deemed as sufficient compliance on the part of the employer. Employers may give more but not below the minimum required by law.
(Ian Alfredo T. Magno is a legal officer at Philhealth and is a practicing lawyer based in Cagayan de Oro. E-mail: ianalfredom@gmail.com)
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