13th Month Pay Flashcards
How much is the 13th month pay?
Not less than one-twelfth (1/12) of the total basic salary of a employee within a calendar year.
What is the purpose of the 13th month pay?
To uniformly provide low-paid employees with additional income.
To further protect the level of real wages from the ravage of world-wide inflation.
Also, the Christmas season is an opportune time for society to show its concern for the plight of the working masses.
Who can receive 13th month pay?
All employers are required to pay all their rank and file employees a 13th month pay not later than December 24 of every year. Provided that, they have worked for at least one month during a calendar year.
What employers are exempted from paying their employees 13th month pay?
- GOVERNMENT EMPLOYERS. Government, its political subdivisions, including GOCCs except those operating essentially as private subsidiaries of the Government;
- EMPLOYERS PROVIDING EQUIVALENT BENEFITS. Employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of the issuance of 13th month pay law; and
- HOUSEHOLD EMPLOYERS. Employers of household helpers and persons in the personal service of another in relation to such workers;
- Employers of those who are paid on:
- purely commission basis,
- boundary or task basis,
- those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof. - Distressed employers with prior authorization from the Secretary of Labor to be qualified for exemption.
What are distressed employers?
(1) those which are currently incurring substantial losses or
(2) in the case of non-profit institutions and organizations, where their income, whether from donations, contributions, grants and other earnings from any source, has consistently declined by more than forty (40%) percent of their normal income for the last two (2) years, subject to the provision of Section 7 of this issuance;
What is the minimum period of service required for an employee to be entitled to 13th month pay?
The employee should have worked for at least one month during a calendar year to be entitled to 13th month pay.
What are the three conditions to be entitled to 13th month pay?
- That the employer is not excluded from the coverage of P.D. 851 or the 13th Month Pay Law.
- That the employees are rank-and-file employees.
- That the said employees should have rendered at least thirty (30) calendar days of service.
What is included in basic salary?
It shall include all remunerations or earnings paid by an employer to an employee for services rendered.
It does include all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary such as:
1. Cash equivalent of unused vacation and sick leaves credits
2. Overtime Pay
3. Premium Pay
4. Night Shift Differential
5. Holiday Pay
6. Commissions
7. Cost-of-living allowances
EXCEPT, if any or all of the said benefits are made an integral part of the basic salary.
This happens when in an employment contract or collective bargaining agreement, or company practice or policy, the same are treated as part of the basic salary of the employees.
When should employers pay 13th month pay?
The required 13th month pay shall be paid not later than December 24 of each year.
An employer, however, may give to his employees one half (½) of the required 13th month pay before the opening of the regular school year and the other half on before the 24th of December of every year.
The frequency of payment of this monetary benefit may be the subject of agreement between the employer and the recognized/collective bargaining agent of the employees.
What is the 13th Month Pay for Employees Paid by Results?
Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay, based on their total earnings during the calendar year, i.e., on both their fixed or guaranteed wage and commission.
What is the 13th Month Pay for Those with Multiple Employers?
Government employees working part time in a private enterprise, including private educational institutions, as well as employees working in two or more private firms, whether on full or part time basis, are entitled to the required 13th month pay from all their private employers regardless of their total earnings from each or all their employers.
What is the 13th Month Pay for Private School Teachers?
Private school teachers, including faculty members of universities and colleges, are entitled to the required 13th month pay, regardless of the number of months they teach or are paid within a year, if they have rendered service for at least one (1) month within a year.
