Guidelines for release of 13th month pay out

CEBU, Philippines — The Department of Labor and Employment (DOLE) has issued the guidelines for the release of the 13th month pay in the private sector.

In Labor Advisory No. 13 - 2024, the DOLE said that 13th month pay is mandated for rank-and-file employees in the private sector without regard to their position, designation, or employment status.

The agency said it should be given irrespective of the method used to pay the employees’ wages, on the condition that they have worked for at least one month during the calendar year.

Covered by the guidelines are rank-and-file employees who are paid on a piece-rate basis, fixed or guaranteed wage plus commission, those with multiple employers, those who resigned, were terminated from employment, or were on maternity leave and received salary differential.

"The minimum 13th month pay shall not be less than one-twelfth of the total basic salary earned by an employee within a calendar year," the advisory read.

The computation is based on the formula: 13th month pay equals total “basic salary” earned during the year divided by 12.

It 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 shift differential and holiday pay, and cost of living allowance.

However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if these are treated as part of the employee’s basic salary, through individual or collective agreement, company practice or policy.

Employers are mandated to release the 13th month pay on or before December 24.

Any request or application for exemption or deferment will not be considered or approved.

In order to guarantee compliance with the law, the government mandates employers to submit a report through the DOLE establishment report system by January 15, 2025.

The appropriate DOLE provincial and regional offices having jurisdiction over the workplace will monitor compliance with the 13th month pay.

The 13th month pay is mandatory under the Labor Code of the Philippines and Presidential Decree 851.