(Ed’s note: This is the concluding part of the Q and A on the 13th month pay which began on November 5, 2012. Click here to read the first part.)
Is the 13th month pay the same as the Christmas bonus?
No, they are different.
The 13th month pay is mandatory. The Christmas bonus is a gift or reward given voluntarily by an employer outside of an employee’s regular compensation for his or her industry and/or contribution to making the employer’s enterprise successful or profitable. Some companies give this when business has been good during the year, and do not if business has been slow.
How long does an employee have to stay in the company to qualify for the 13th month pay?
An employee who has worked in a company for at least one month is entitled to a proportion of the pay. In this case, 1/12 of 1/12 of the basic annual pay.
Are there companies/organizations exempted from paying the 13th month pay?
The following companies/organizations/employers are not required to pay 13th month pay under P.D. 851, unless the grant thereof have become a policy or practice:
- Employers of household helpers and persons in the personal service of another in relation to such workers.
- Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month pay to such workers.
The PDI also exempts government organizations from paying the 13th month pay. However, this have been effectively rescinded by Budget Circular No. 2010-1, issued April 28, 2010, indicating that government officials and employees are entitled to a year-end bonus equivalent to one month of pay (plus a cash gift of P5,000).
What about employees who work part-time? Employees who hold two or more jobs at the same time?
Workers who work part-time or who work for two or more companies or private employers, whether on full or part time basis, are entitled to the 13th month pay from all their private employers regardless of their total earnings from each or all their employers.
What about professionals (accountants, lawyers, etc.) who are paid monthly retainers?
This may be a gray area that may be discretionary to the company.
Ina Teves, an organization development consultant has this to say about the matter:
You need to determine if there is an employee-employer relationship between your company and the accountant or lawyer,
There are four elements of an employee-employer relationship: (1) the power to choose and hire an employee; (2) payment of salaries/wages; (3) the power to dismiss an employee; and (4) the power to control an employee’s conduct.
(Note: Click here to read the first part of this Q & A.)