Dear PAO,

This year, I recently got my first work as a finance analyst in a company in Quezon City. As the holiday season approaches, one of the common topics among my workmates is the 13th-month pay. I am wondering if I am already entitled to it even if I only joined the company last Oct. 1, 2023. If so, how much will I receive?

Flaire

Dear Flaire,

The grant of 13th-month pay to rank-and-file employees was provided for under Presidential Decree (PD) 851, dated Dec. 16, 1975. Under this law and as elaborated under the 2023 Handbook on Workers Statutory Benefits, rank-and-file employees in the private sector shall be entitled to 13th-month pay regardless of their position, designation, or employment status and irrespective of the method by which their wages are paid, provided that they have worked for at least one month during the calendar year. The minimum 13th-month pay required by law shall not be less than one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year.

The “basic salary” of an employee for the purpose of computing the 13th-month pay shall include all remunerations or earnings paid by his or her employer for services rendered. It does not include allowances and monetary benefits that 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 (COLA). This minimum amount shall be provided without prejudice to existing company practice and policy, employment contract or collective bargaining agreement, if any.

Further, the employer shall pay the 13th-month pay on or before Dec. 24 of every year. An employer, however, may give to his or her employees one-half (1/2) of the 13th-month pay before the opening of the regular school year and the remaining half on or before Dec. 24 of every year.

Notably, there was a condition for the entitlement of the 13th-month pay of a rank-and-file employee, viz.: he was able to render at least a month of service. Thus, in your case, you started employment on the first of October. Hence, you will be entitled to the 13th-month pay. However, since you only started in the last quarter of the year, the basis of your 13th-month pay will be relatively smaller compared to your other workmates. You need to sum up your total basic pay for the calendar year and divide it by 12 to determine your possible 13th-month pay.

We hope that we are able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Thank you for your continued trust and support.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]