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13th Month Pay 13th month pay, which is specially relevant for both workers and employers alike

during the end of each year, is naturally a sensitive topic considering that it is an indispensable portion of workers benefits. What is 13th month pay? It is a form of monetary assistance e uivalent to the monthly basic compensation received by an employee, computed pro!rata according to the number of months within a year that an employee has rendered service to an employer "basic monthly pay#1$ % number of months actually worked&. Who are entitled to 13th month pay? 'll rank and file employees, regardless of status, who have worked for at least one "1& month are entitled to receive 13th month pay. What if I already worked for one month and I resigned thereafter? 'n employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to 13th month pay, in proportion to the length of time he worked during the year. (he formula is) "basic monthly pay#1$& % "number of months actually worked&. (he 13th month may be demanded at the time of effectivity of the resignation#termination. (hat doesnt have to be *ecember $+. Who are rank!and file employees? 'll employees not considered as managerial employees are considered rank!and!file employees. ' managerial employee, as distinguished from a rank!and!file employee, is one who is vested with powers of prerogatives to lay down and e%ecute

management policies and#or to hire, transfer, suspend, lay! off, recall discharge, assign or discipline employees, or to effectively recommend such managerial actions. Is there a cap, i.e., only those receiving a salary below ,1,--- may receive 13th month pay? ,rior to 1./0, only those who receive a monthly salary of not more than ,h,1,--- are entitled to receive 13th month pay. (his cap was removed under 1emorandum 2rder 3o. $/ issued by former ,resident 4ora5on ' uino. When must it be paid? (he 13th month pay shall be paid not later than *ecember $+ of each year. 'n employer, however, may give to his employees one half "6& of the re uired 13th month pay before the opening of the regular school year and the other half on before the $+th of *ecember of every year. (he fre uency of payment of this monetary benefit may be the sub7ect of agreement between the employer and the recogni5ed#collective bargaining agent of the employees. 4ould the employer withhold the 13th month pay? 3o, the payment of 13th month pay is mandatory, specifically provided under ,residential *ecree ",.*.& 3o. /81. In case of non!payment of 13th month pay, covered employees could complain at the *epartment of 9abor and :mployment "*29:& or the 3ational 9abor ;elations 4ommission "39;4&. 're there employers who are e%empted from paying 13th month pay? <es. (he following employers are not re uired to pay 13th month pay under ,.*. /81, unless the grant thereof have become a policy or practice)

a& (he =overnment and any of its political subdivisions, including government!owned and controlled corporations, e%cepts those corporations operating essentially as private subsidiaries of the =overnment. b& :mployers already paying their employees a 13th month pay or more in a calendar year or its e uivalent at the time of this issuance. c& :mployers of household helpers and persons in the personal service of another in relation to such workers. d& :mployers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fi%ed amount for performing specific work, irrespective of the time consumed in the performance thereof, e%cept where the workers are paid on piece!rate basis in which case the employer shall grant the re uired 13th month pay to such workers. Who are those paid on a piece!rate basis? (hey are workers paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same. What if I work in more than one company? Workers who work in two or more companies or private employers, whether on full or part time basis, are entitled to the re uired 13th month pay from all their private employers regardless of their total earnings from each or all their employers. Is it part of the 4ompany bonus? 3o. (he payment of 13th month pay is mandated by law. It is separate from any other bonus given by the company. ;ead the previous discussion.

Is 13th month pay ta%able? 3o, as long as the amount does not e%ceed ,3-,---. 2nly the amount in e%cess of ,3-,--- is ta%able.