14Th Month Pay Law

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session JUL -7 A1:08 S.B. No. _ BRN A I53 INTRODUCED BY SENATOR VICENTE C. SOTTO III AN ACT REQUIRING EMPLOYERS IN THE PRIVATE SECTOR TO PAY 14th MONTH PAY Presidential Decree No. 851 or the decree requiring all employers to pay their employees a 13th- Month pay was enacted in December 16, 1976. After almost five decades, the needs and cost of living of every Filipino worker have drastically changed, thus it is high time that employees in the private sector receive their 14th month pay. In that regard, 13th month pay can be given in the middle of the year to help our workers to pay the educational expenses of their children. 14th month pay on the other hand should be given at the end of the year. This bill has exemptions for qualified employers as not to burden struggling businesses as they are equally important for our economy. In view thereof, immediate approval of this bill is requested. VICENTE C. SOTTO III

... TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 25 JUL -7 A11:08 First Regular Session SENATE REC S.B. No. 193 INTRODUCED BY SENATOR VICENTE C. SOTTO III AN ACT REQUIRING EMPLOYERS IN THE PRIVATE SECTOR TO PAY 14th MONTH PAY Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1: Short Title. - This act shall be known as the 14th Month

2 Pay Law".

SECTION 2. Declaration of Policy. - The State affirms labor as a

primary social economic force. It shall protect the rights of workers and promote their welfare.

SECTION 3. Coverage. - This act shall cover all non-government rank

and file employees regardless of their employment status, designation and irrespective of the method by which their wages are paid, workers under the Kasambahay Law and other workers who are presently entitled by law to 13th month pay, provided that they have worked at least one month during the calendar year.

SECTION 4. Definition of Terms. - As used in this Act:

a. Rank and File Employees - are those not considered as managerial employees. They are not vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer,

suspend, layoff, recall discharge, assign or discipline employees or to effectively recommend such managerial actions. b. Basic Salary - for the purpose of computing the 14th month pay shall include all remunerations or earning paid by this employer for services rendered but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary.

SECTION 5. Mandatory Payment of 14th Month Pay. - All non-

government rank and file employees, qualified workers under the Kasambahay Law and other workers who are presently entitled by law to 13th month pay, shall be entitled to 14th month pay every year.

SECTION 6. Time of Payment. - The 13th month pay shall be paid not

later than June 14th and the 14th month pay shall be paid not later than December 24th of every year provided however that the frequency of payment of this monetary benefit may be the subject of agreement between employer and employee or any recognized/ collective bargaining agent of employees.

SECTION 7. Minimum Amount. - The minimum amount of the 14th

month pay shall not be less than one twelfth (1 / 12) of the total basic salary earned by the employee within the calendar year.

SECTION 8. Employers Covered. - The law shall apply to all employers

except to: (a) Distressed employers, such as (1) those which are currently incurring substantial losses or (2) in the case of non-profit institutions and where their income, whether from donations, organizations, contributions, grants and other earnings from any source, has consistently declined by more than forty (40%) percent of their normal income for the last two (2) years, subject to the authorization process of the Department of Labor and Employment;

(b) The Government and any of its political subdivisions, including government-owned and controlled corporations, except those corporations operating essentially as private subsidiaries of the Government; (c) Employers already paying their employees 14-month pay or more in a calendar year or its equivalent at the time of this issuance; and (d) Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing a 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 be covered by this issuance insofar as such workers are concerned.

SECTION 9. Implementing Rules. - Within sixty days from the

enactment of this law, the Secretary of the Department of Labor and Employment (DOLE) shall promulgate the implementing rules of this law.

SECTION 10. Separability Clause. - If any provision of this Act is

declared invalid or unconstitutional, other provisions hereof which are not affected thereby shall continue to be in full force and effect.

SECTION 11. Repealing Clause. - Any law, presidential decree or

issuance, executive order, letter of instruction, administrative order, rule or regulation contrary to or inconsistent with any provision of this Act as hereby amended or modified accordingly.

SECTION 12. Effectivity Clause. - This Act shall take fifteen (15) days

following its publication in the Official Gazette or in at least two (2) newspaper of general circulation. Approved,