Dear Atty. Maan,

My sister is a rank-and-file employee of a private company. She has been working there for more than one year and is paid on a monthly basis. As of today, her 13th month pay has not yet been credited, even though December is almost over and most companies have already released theirs. When she asked HR about it, she was told that the company is experiencing financial difficulties and that the release of the 13th month pay will be delayed until further notice. Can the company legally delay their 13th month pay?

Zoe

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Dear Zoe,

Under Philippine law, the payment of the 13th month pay is mandatory, not discretionary.

Presidential Decree No. 851 requires all employers to pay their rank-and-file employees a 13th month pay equivalent to at least one-twelfth (1/12) of the employee’s basic salary earned within a calendar year. This benefit must be paid not later than 24 December of every year, as reinforced by the Rules and Regulations Implementing P.D. No. 851 and the guidelines of the Department of Labor and Employment (DoLE).

Further, financial difficulty is not a valid excuse for non-payment or delayed payment of the 13th month pay. The obligation to pay arises by operation of law, and compliance is mandatory regardless of the employer’s financial condition.

If the employer fails to release the 13th month pay within the prescribed period, the employee may first raise the matter internally with HR or management. If the issue remains unresolved, the employee may file a complaint with the DoLE Regional Office or the National Labor Relations Commission for non-payment of statutory benefits.

In summary, employees are legally entitled to receive their 13th month pay on or before 24 December of the same calendar year, and any unjustified delay may expose the employer to administrative liability and orders for compliance.

Clearly, your sister is legally entitled to her 13th month pay, and the employer’s delay or failure to credit it violates existing labor laws.

Hope this helps.

Atty. Mary Antonnette Baudi