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13th month pay is mandatory
May 15, 2012
Q: My business is not doing too well; cash flow has been a constant problem lately. Am I still required to pay my employees their full 13th month pay? How about if I paid it on installment: half on December 15 and the other half on December 30--would that be alright? Everyone knows the economy has been bad lately; Surely, it would be understandable if some employers could not give their employees their Christmas bonuses in full.
A: 13th month pay is a statutory grant, meaning it is provided by law (See PD 851), thus, its payment to all rank and file employees is mandatory regardless of their position, designation or employment status, and the method by which their wages are paid, provided that they have worked for at least one month during the calendar year.
Payment of the 13th month pay must be made not later than December 24 of each year. You may give it in installments, but all installments should be paid on or before December 24.
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