Christmas is around the corner. And about this time of the year, we get loads of questions about 13th month pay. In this article, I would like to share 3 things you may not know about this benefit.
Not everyone is entitled to it
Did you know that only rank and file employees are technically entitled to 13th month pay? Yes, really! But the Philippines, being the Christmas capital of the world, traditionally gives it out to nearly all employees as part of the holidays. The law states:
All rank-and-file employees who have worked for at least one (1) month during the calendar year, are entitled to receive 13th month pay regardless of the nature of their employment and irrespective of the methods by which their wages are paid.
That means that strictly speaking, if you are in the Managerial level, the company is exercising it’s management prerogative and giving you a benefit above and beyond what you are entitled to. So if you're not a rank and file employee and you still receive it, thank your boss for extending this benefit to you in the exercise of their managment prerogative!
It can be given at any time of the year
The laws states that the 13th month pay should be released on or before december 24th of every year. Take note of the word "before". That means that employers can choose to distribute it at any time of the year.
What I've seen most employers do is to divide the 13th month pay and distribute one half when the employees need it the most. Can you guess when that is? It's enrollment season! So in some companies, 1/2 of the 13th month pay is given during June. The other half is distributed in December.
Even resigned, awol or terminated employees are entitled to 13th month pay
It may be counter-intuitive, but resigned, AWOL or terminated employees are actually entitled to this benefit. Why? The 13th month pay is actually considered "already earned" by the employee. Much like last pay.
So even if they leave or are terminated at some point, they already have rights to a portion of the 13th month pay, and therefore, the proportionate amount should be released to them when they leave (subject to any lawful deductions found during clearance).
If you want to know more about what employees are entitled to when they leave, I suggest visiting my other article on "Back Pay vs Last Pay vs Separation Pay"
So there you have it folks, hope I was able to share something that you didn't know about before. Now that we've simplified this for you, go out there and make better choices!