Mandates 13th month pay for employees

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PRESIDENTIAL DECREE NO. 851: Mandates 13th month pay for employees

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Title Source: Supreme Court: Mandates 13th month pay for employees

Law: Presidential Decree No. 851

Decision Date: Dec 16, 1975

The 13th Month Pay Law in the Philippines requires all employers to provide a 13th-month salary to employees with a basic salary of not more than P1,000 a month, aiming to protect real wages and address the lack of increase in minimum wage rates since 1970.

Law Summary

Definition and Amount of 13th-Month Pay

The 13th-month pay is an additional monetary benefit equal to one month's salary.
It must be granted in addition to the employee's basic salary.

Deadline for Payment

The 13th-month pay must be paid on or before December 24 of each year.
This timing is set to assist employees during the Christmas and New Year festivities.

Exemption Clause

Employers who are already paying a 13th-month pay or an equivalent benefit are exempt from this decree.
The decree does not require additional payments beyond what is already provided by such employers.

Purpose and Policy Rationale

The decree aims to protect the real wages of workers against inflation.
Recognizes the stagnant legal minimum wage since 1970, necessitating supplementary benefits.
Emphasizes the social importance of the Christmas season as a time of concern and support for workers.

Effectivity

The decree took effect immediately upon promulgation.
Ensures prompt implementation without delay.

Legal Authority

Enacted by Presidential decree under the powers vested in the President of the Republic of the Philippines.
Signed by President Ferdinand E. Marcos and authenticated by the Presidential Assistant.

END