Companies may delay grant of 13th month pay this year

FILE: Department of Labor and Employment Secretary Silvestre Bello III during a press conference on Thursday (Sept. 27, 2018), which is held at the DOLE main office in Intramuros, Manila. (PNA photo by Gil Calinga)

MANILA – The Department of Labor and Employment (DOLE) urged companies affected by the coronavirus disease 2019 (Covid-19) pandemic just to delay and not completely discard the grant of 13th-month pay to their workers.

In a virtual press briefing on Thursday, Labor Secretary Silvestre Bello III said the issue on the grant of 13th-month pay needs to be discussed by the management and employees.

This came as quarantine restrictions impaired the economy and affected business operations.

“Since the 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’s an option. The other option is, if the company is distressed, (you) are excused.

But you have to prove that you are distressed,” Bello added.

Bello admitted that they have to come up with an advisory to determine the meaning of “distressed company”.

Under the law, if a business establishment is characterized as a distressed company, it is exempted from giving 13th-month pay.

“We have to come up with an advisory to determine what is the meaning of a distressed company or a distressed business establishment for them to be exempted from the payment,” he said.

Meanwhile, Bello said they are looking to exempt micro, small and medium enterprises (MSMEs) from payment of 13th-month pay.

“Undersecretary Benjo (Benavidez) and I discussed when it comes to 13th-month pay, if MSMEs may be exempted and then those with a capitalization of PHP1 million and above may be required but this is still being studied, it will be a subject of a tripartite consultation,” he added.

Presidential Decree 851 provides for the grant of 13th-month pay as a mandatory benefit for private sector workers

An employer may give his or her employees half of the 13th-month pay before the opening of the regular school year and the remaining half on or before December 24 every year.