By virtue of Presidential Decree No. 851, the 13th month pay during the Martial Law era was given only to employees receiving a monthly salary of not more than P1,000. However, in 1986, former Pres. Corazon Aquino issued Memorandum Order No. 28 declaring that all rank-and-file employees, regardless of status, who have worked for at least (1) month are entitled to receive 13th month pay.
The 13th month pay is mandatory and shall be paid on or before December 24. Therefore, all employees, whether regular, probationary or contractual, can demand its payment from their employers.
The 13th month pay is a form of monetary assistance equivalent to the monthly basic compensation received by an employee. It is computed pro-rata according to the number of months within a year that an employee has rendered service to an employer. The computation thus is: basic monthly pay/12 x number of months actually worked.
Employers, however, may file petition for exemption of payment of 13th month pay on the basis of inability to implement P.D. 851, subject to the approval of the Chairman of the Wage Commission.
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