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Issue: September 2008
 
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Ina Teves, Organizational Development Consultant

Ina Teves is an organizational development consultant with a change management firm dedicated to making a difference wherever it goes by journeying with the client through the entire process of organizational transformation. Email your questions to ina.b.teves@gmail.com.

Unpaid 13th Month Pay
 

Dear Ina,

I just want to ask. My coworker was terminated and they don't want to give his 13th month.  Is this possible? As far as I know it’s illegal not to give the 13th month of an employee whether the person works only for a month or so. If so where could Í find the  P.D./R.A./E.O./A.O.?

Greg


 

Dear Greg,

The 13th Month Pay Law is Presidential Decree 851, as amended by Memorandum Order 28. In essence, it states that all employers should pay all (MO 28) their rank and file employees a 13th month pay, to be given on or before 24 December every year, provided that they have worked for at least one month during the year.  The 13th month is 1/12 of the total basic salary earned within the calendar year. 

Resigned or separated employees are entitled to 13th month pay, which again, is equal to 1/12 of their total basic salary earned during that the calendar year, and they may ask for it, if they are entitled to it.

Some employers are exempted from giving 13th month pay. Among them are:

  • Government and government-owned corporations except those operating as private subsidiaries
  • Those already paying 13th month or more, or its equivalent -- Christmas, midyear, cash bonus equal to or more than 1.12 of the basic salary. If the latter is less than 1/12, the employer should pay the difference.
  • Employers of household helpers
  • Employers of those paid on a purely commission, boundary or task basis
You may visit the website of the Department of Labor and Employment for more details on the implementation of this law or Chan-Robles Virtual Law Library: http://www.chanrobles.com/revised13thmonthpayguidelines.htm.  The 13th Month Pay Law is also published together with the Labor Code of the Philippines and available in most large bookstores.

 

All the best,

 

Ina Teves is one of JobsDB's professional columnist on Career Advice. Read more of her column articles here: