DOLE Labor advisory no.18 - Guidelines for 13th month pay

The Department of Labor and Employment has issued Labor Advisory No. 18 which provides guidance on the release of 13th-month pay.

Employees all around the country are looking forward to their 13th-month pay, just in time for DOLE to reveal new guidelines for employers. The renumbered Article 5 of the Labor Code of the Philippines, along with Presidential Decree 851 was updated, mandating every employer within the private sector to pay all rank-and-file employees with 13th-month pay. Dole then issued Labor Advisory No. 18 to highlight the importance of giving employees their 13th-month pay.

The new guidelines state that every rank-and-file employee from a private sector who worked for at least one (1) month during the calendar year, must receive a 13th-month pay. This payment will be given to the employee regardless of their position, designation, employment status, and how their wages are paid.

The new laws explain that the amount required by the 13th-month pay must be at least one-twelfth (1/12) of an employee’s total base salary over the calendar year, without displaying any bias towards any employee contracts, company policies or collective bargaining agreements.

To better explain the new rules, DOLE provides an illustrated demonstration using a basic employee wage in the NCR at P 537.00 per day and a six-day workweek or an equivalent Monthly Basic Salary of P 14,006.75 (The formula would be P 537.00*313/12 months). If you want to calculate the new 13th-month pay, it will look something like the sample below:

DOLE 13th month pay - sample computation

Total Basic Salary Earned for the year = ₱ 106,147.00
₱ 106,147.00/12 = ₱ 8,845.58 is the correct 13th month pay amount

The laws require that all private employers transfer the 13th month's pay to all employees by December 24, 2021. DOLE further clarifies that any attempt to appeal for an exemption or to postpone the 13th-month payment will not be acknowledged.

Additionally, DOLE mandates that all employers need to also submit a compliance report to the DOLE Establishment Report System by January 15, 2022. You can follow the link below for more details:

Compliance Report Requirements in the Philippines

The compliance report is required to have the following information:

  1. Name of establishment
  2. Address
  3. Principal product of business
  4. Total employment
  5. Total number of workers benefitted
  6. Amount granted per employee
  7. Total amount of benefits granted
  8. Name, position, telephone number of the one providing the information

Coordinate with your team to guide them through the process.