What Is 13th Month Pay?

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Every end of the year, many are excited waiting for a long vacation brought by the yuletide season. But aside from this period of relaxation, every employee has been anticipating for their bonuses, if not, 13th month pay.

Meaning of 13th Month Pay

What is 13th month pay? It is an additional benefit in a form of cash equivalent to not less than 1/12 of the total basic salary received by an employee. It is computed based on the number of months the employee has rendered his work within one whole year.

Payment to the employee of this additional remuneration is not just discretionary on the part of the employer but was held mandatory by law. It is not similar to bonuses which can only be given if the means or resources of the employer will permit them to do so. It shall be paid not later than the 24th day of December of each year. However the employer may give one-half of it before the opening of school year and the other half on or before the 24th day of December.

What is Basic Salary

The law clearly states the scope of basic salary of an employee. The “basic salary” of an employee for the purpose of computing the 13th month pay shall include all remunerations or earnings paid by his employer for services rendered but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime premium, night differential and holiday pay, and cost-of-living allowances.

Who are entitled to 13th Month Pay

Only those rank and file employees who have worked for at least one month in a year with a company are entitled to receive 13th month pay. The law does not distinguish as to the status or designation of an employee, so we must not distinguish. Hence, it should be understood that even if not regular or permanent, an employee can receive such additional pay provided that he/she has worked for a month in a year.

Even if the employee has resigned after a month or has been terminated, he/she will still be given such a right. Computation of the 13th month pay must be proportionate to the time the employee has worked during the year.

For those who work in several companies, whether full time or part-time, they can demand for their 13th month pay from all of the companies where they work.

Non-payment of 13th Month Pay

In case the employer did not give the 13th month pay, the affected employees can rightfully demand for it from their employers. If despite demand, the employer refused to do so, a complaint to the Department of Labor and Employment or the National Labor Relations Commission must be had.

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Source by Rebecca Carla Ponce

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