Thirteenth Month Pay Flashcards
Definiton
1/12 of the total basic salary earned by an employee within a calendar
Coverage:
•all employers are required to pay their rank-and-file employees 13th month pay
regardless of the nature of employment
•provided that employees worked for at least 1 month during a calendar year
•Managerial employee
-vested with powers to lay down and execute management policies
-power to hire, transfer, suspend, layoff, recall, discharge, assign, or discipline
employees
•Rank-and-file employees
-those who do not fit the description of managerial employees
•Employers not covered by 13th month pay compliance
-government and any political subdivisions, except corporations operating as private subsidiaries of the government
-employers who are already paying employees with 13th month pay even before the Presidential Decree
-employers of household helpers and persons in personal service of another
-employers of commission-based employees
-where workers are paid on a piece-rate basis, the employer shall grant them
13th month pay
Employers who are not required to comply with the 13th month pay rule:
-
Government employers
- Includes government offices and political subdivisions.
- Exception: Corporations owned by the government but operating like private businesses must comply.
-
Employers already providing 13th month pay
- If an employer was already giving 13th month pay before it became mandatory under the Presidential Decree, they are not required to make changes.
-
Employers of household helpers and personal service workers
- Includes kasambahays and those hired for personal services (e.g., drivers, nannies).
-
Employers of commission-based workers
- Employees paid purely on commission are excluded.
- However, piece-rate workers (paid per output but not on commission) are still entitled to 13th month pay.
Amount
-not be less than 1/12 of the total basic salary earned by an employee in a calendar year
-Basic Salary
•remunerations for services rendered
•excluding allowances and monetary benefits which are not considered or integrated as part of basic salary
Computation
Total basic salary earned during the year divided by 12 months
Time of Payment
-not later than December 24 of every year
-employer may give half of the 13th month pay before the opening of the regular school year and the remaining half on or before December 24
13th Month Pay for Certain Types of Employees
•employees paid on piecework basis are entitled to 13th month pay
•employees paid a fixed wage plus commission are entitled to 13th month pay based on earnings during the calendar year
-computation only includes wage, not commission pay as these are considered
additional pay
•employees with multiple employers
-employees working on different enterprises (regardless if part-time or full-time) are entitled to 13th month pay regardless of their total earnings from each employer
13th Month Pay of Resigned or Separated Employee
•employees who resigned or were terminated at any time before the time of payment is entitled to 13th month pay proportionate to the length of time they worked during the year from the day they started up to their resignation or termination date.
-eg. a worker who worked from January to September is entitled to 13th month pay
equal to 1/12 of total basic salary earned from that period
13th Month Pay of Employee on Maternal Leave
-salary differential SHALL BE INCLUDED as part of basic salary for computation of 13th
month pay
If an employee is on maternity leave, any salary differential (the difference between what the employee normally earns and what she receives during maternity leave) will be included in the calculation of her 13th month pay.
Non-inclusion in Regular Wage
-13th month pay is NOT included in the regular wage of employees when computing for overtime and premium payments
The 13th month pay is not considered part of an employee’s regular wage when calculating overtime or premium pay.
