The Philippines mulls subsidy for 13th month pay

In the Philippines, all businesses are obligated to pay their employees their 13th month’s salary by December 24, 2022.
By: | November 28, 2022
Topics: Compensation and Benefits | Employment Law | News | Philippines

The Department of Labour and Employment (DOLE) is considering a subsidy to grant micro, small and medium businesses (MSMEs) the 13th month pay for their employees.

Bienvenido Laguesma, Secretary of Labour and Employment, said, “That is what we are studying, perhaps we could provide assistance or subsidy to these companies that are really incapable of fulfilling the 13th month pay law.”

Laguesma noted that for the past two years, the government had provided assistance to MSMEs severely affected by the pandemic and having difficulty giving their employees their 13th month pay. 

“There is no exemption, no deferment [to giving the 13th month pay]. We recognise employers having difficulty in paying up, but the law gives no exemption,” the labour chief stressed. 

Under the law, employers must give all their rank-and-file workers the 13th month pay on or before December 24, 2022. This covers all workers, whether regular or contractual, provided they have worked at least one month within the year. Even those who have resigned or were terminated from their work within the year are entitled to it, the DOLE said. 

READ: Employees in the Philippines can expect year-end bonus

However, workers and employers may negotiate and agree on terms of payment of the mandatory benefit, said Laguesma. “The agreement must be abiding by the law. It must not be forced upon an employee to satisfy the requirement of the law.” 

The DOLE secretary urged employers to release the 13th month pay early to avoid complaints lodged against them by their workers, reported Philstar Global.