DOLE 13th Month Pay Rules for Private Sector

Guidelines on the Payment of the 13th Month Pay for Rank-and-File Employees in the Private Sector

The Department of Labor and Employment (DOLE) issued Labor Advisory No. 18, Series of 2021, to provide clear guidelines on the payment of the thirteenth month pay for rank-and-file employees in the private sector. This advisory outlines the coverage, computation, and payment schedule for the thirteenth month pay, ensuring that employees receive their rightful benefits in a timely manner.

Coverage

All rank-and-file employees in the private sector, regardless of the nature of their employment and irrespective of the methods by which their wages are paid, are entitled to receive a thirteenth month pay. This is mandated by Presidential Decree No. 851, requiring all employers to provide their employees with a thirteenth month pay, which should be equivalent to one-twelfth (1/12) of their total basic salary earned within the calendar year.

Computation

The computation of the thirteenth month pay is straightforward. It involves dividing the total basic salary earned by the employee within the calendar year by twelve. The formula is 13th Month = Total Basic Salary Earned / 12

To illustrate, consider an employee earning a basic wage of ₱537.00 per day in the National Capital Region, working a six-day workweek. The equivalent monthly basic salary is calculated as follows:

Monthly Basic Salary=₱537.00×313/12≈₱14,006.75

Below is an example of how to compute the proportionate thirteenth month pay, taking into account absences, leaves, and company shutdowns throughout the year:

Total basic salary earned for the year: ₱106,147.00

Thus, the proportionate thirteenth month pay is: 13th Month Pay = ₱106,147.00 / 12 ≈₱8,845.58

Time of Payment

Employers shall pay the 13th month pay on or before December 24, 2021. This ensures that employees have the additional financial support during the holiday season, promoting better welfare and productivity.

No Exemption or Deferment

No request or application for exemption from payment of the 13th month pay, or for deferment of the payment thereof shall be accepted and allowed. This rule is designed to protect the rights of employees and ensure they receive their due benefits without delay.

Report of Compliance

Employers are required to make a report of their compliance via online through the DOLE Establishment Report System at reports.dole.gov.ph, not later than January 15 of the following year. The report shall conform substantially with the following:

1. Name of establishment

2. Address

3. Principal product of business

4. Total employment

5. Total number of workers benefitted

6. Amount granted per employee

7. Total amount of benefits granted

8. Name, position, and telephone number of the person giving information
   

By following these guidelines, employers can ensure compliance with the law and uphold the welfare of their employees. The DOLE emphasizes that the 13th month pay is a statutory benefit that must be provided to all eligible employees.

Conclusion

Labor Advisory No. 18, Series of 2021, reinforces the importance of the thirteenth month pay as a crucial benefit for rank-and-file employees in the private sector. By clearly outlining the guidelines for its computation and payment, the DOLE aims to uphold the rights of employees and ensure their well-being.

For further details, employees and employers are encouraged to refer to the full text of the advisory and reach out to the DOLE for any clarifications.

Be guided accordingly.

References:
13TH MONTH PAY COMPUTATION 2024 | MAGKANO DAPAT? | MGA DAPAT MONG MALAMAN

https://drive.google.com/file/d/1BOqyrFYU3TVO9FqFhtbVrYsgfbOKcXGO/view