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Can the Pandemic Spoil Your 13th Month Pay?

Is COVID-19 a Grinch too?
by Joel Guinto
Oct 9, 2020
Photo/s: Joel Guinto/

All rank and file workers are entitled to 13th month pay under labor laws and companies should be giving it out from November to December. That was before COVID-19. In the last six months, jobs were lost, businesses trimmed operating hours and the economy sank into a recession.

"There is no deferment" of the 13th month pay, Labor Secretary Silvestre Bello told reportr. Earlier this week, he suggested deferring its release to give companies financial breathing space.

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The Kilusang Mayo Uno said the current crisis made the release of 13th month pay even more urgent. It should not be a "sacrificial lamb," said its chairman, Elmer Labog, on TeleRadyo.

What does the law say about 13th month pay?

It is mandatory for all rank and file employees who have worked at least one month during the calendar year. It must be paid in full before Dec. 24, one day before Christmas Day, according to guidelines from the Department of Labor and Employment.

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It is different from a bonus, which is given "out of generosity," according to the guidelines. Some companies, depending on their size, give 14th anf 15th month payouts. Sometimes, these are tied to whether earnings targets are met.

It can't be less than 1/12 of the employee's basic salary for the year, the DOLE said.

Bello said the law provides for an exemption for "distressed establishments," however, “We are still studying this and it would be a subject of thorough discussion by both the management and employees."

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