UNDER Presidential Decree (PD) 851, employers from the private sector are required to pay their rank-and-file employees the 13th month pay not later than Dec. 24 every year. The 13th month pay is equivalent to 1/12 of an employee’s basic annual salary.
Talking of presidential decrees, these were issued by the late President Ferdinand Marcos. You see, we criticize and condemn Marcos, calling him a dictator, and yet succeeding administrations still recognize and implement laws he imposed and we are enjoying some of his decrees like the 13th month pay.
The 13th month pay is prescribed under labor laws as mandatory benefits and should not be confused with the “Christmas bonus” commonly practiced in the local business setting. The Christmas bonus is not a demandable and enforceable obligation and can only be released upon an employer’s voluntary discretion. It is usually granted by employers to show appreciation and gratitude for the service rendered by employees within a year.
All rank-and-file employees in the private sector who have worked for at least one month during the calendar year are entitled to receive 13th month pay regardless of their position, designation or employment status.
This new amount is a relative increase from the previous tax exclusion rate of P82,000. Anything beyond the maximum exclusion rate of P90,000 must be included in the computation of the employee’s gross income for the applicable taxable year.
But amid the coronavirus (Covid-19) pandemic where many businesses are in distress, the Department of Labor and Employment (Dole) urged companies affected by the pandemic to defer and not completely discard the granting of the 13th month pay. Labor Secretary Silvestre Bello III said the 13th month pay needs to be discussed by management and employees.
“Since businesses are not doing well and the management cannot afford to give such pay, they may defer it. That might be the more acceptable formula to address the issue of the payment of the 13th month pay. They cannot pay it right now, maybe they can settle it next year or next month. That is an option. The other option is, if the company is in distressed (you) are excused. But you have to prove that you are distressed,” Bello said.
Bello added that they have to come up with an advisory to determine the meaning of “distressed companies.” He also said that they are looking to exempt micro, small and medium enterprises, which comprise majority of the businesses, so they don’t have to give the 13th month pay.
From the economic point of view, the definition of “distressed” “refers to the company’s inability to generate positive earnings.” Under PD 851, “distressed employers,” such as those currently incurring substantial losses, are exempted from giving their employees the 13th month pay.
But labor groups denounced Bello’s proposal, saying why make the labor sector a “sacrificial lamb?” “It’s wrong to make workers the sacrificial lamb since they are also cash-strapped,” they said. The militant Kilusang Mayo Uno urged the government to bail out businesses still struggling to stay afloat as a result of the pandemic, while the Associated Labor Union-Trade Union Congress of the Philippines threatened to go to the Ombudsman and sue Bello.
Although, I am holding a managerial position at radio dySS under RGMA Network Inc., a subsidiary of GMA Network Inc., at the end of the day, I am just an employee of the company. As an employee, we know if our company is earning or not. Amid this pandemic, there are a lot of companies that suffered economic setback. Worse, some of these companies have retrenched employees and closed shop. As employees, can’t we just give a little consideration to our employers and agree to the deferment of the 13th month pay? Anyway, it will be given when things return to normal. Sinabtanay lang gud.