Are Part-Time Employees Entitled to 13th Month Pay in the Philippines? A Comprehensive Legal Discussion

Under Philippine labor laws, the 13th month pay is a statutory benefit granted to rank-and-file employees. However, questions often arise about whether part-time employees are entitled to receive this benefit. This article provides a comprehensive overview of the legal basis, coverage, computation, and other essential details on 13th month pay for part-time employees in the Philippines.

1. Legal Basis

1.1 Presidential Decree No. 851

The principal law governing 13th month pay in the Philippines is Presidential Decree No. 851, issued in 1975. The decree requires employers in the private sector to pay their rank-and-file employees a 13th month pay, subject to specific guidelines and exemptions.

1.2 Implementing Rules and Regulations (IRR)

The rules and regulations implementing Presidential Decree No. 851 provide further details on the coverage and method of computing 13th month pay. Subsequent labor advisories and Department of Labor and Employment (DOLE) issuances have clarified and reiterated these rules.

2. Coverage of 13th Month Pay

2.1 Who is Covered?

Under PD 851 and its implementing rules, all rank-and-file employees in the private sector are entitled to 13th month pay, regardless of their position, designation, or employment status (whether full-time, part-time, or contractual), provided:

They have worked for at least one month during the calendar year.
They are not expressly excluded by law.

2.2 Who is Excluded?

The following are commonly excluded (or considered exceptions) under the law or DOLE rules:

Government employees (except those working in government-owned or controlled corporations operating under the Corporation Code).
Household or domestic workers (commonly referred to as “kasambahay”), unless there is a company policy or agreement granting 13th month pay.
Employees already receiving the 13th month pay or its equivalent (e.g., a similar bonus that meets or exceeds the mandated 13th month pay).

However, note that because of the passage of the Domestic Workers Act (Batas Kasambahay), household workers are entitled to certain benefits—but the specific 13th month pay provisions under PD 851 typically apply to employees in the private business sector, not domestic workers.

3. Entitlement of Part-Time Employees

3.1 General Rule: Part-Time Status Does Not Exclude

Part-time employees are still considered rank-and-file employees, provided they do not exercise managerial functions and do not fall under the exclusions noted above. Consequently, they are entitled to 13th month pay on a pro-rated basis.

3.2 Pro-Rated Computation

While part-time employees are legally entitled to 13th month pay, the amount they receive will naturally be lower than that of a full-time employee because the total basic salary earned throughout the year is usually smaller due to fewer hours worked. The standard formula for 13th month pay, as per DOLE guidelines, is:

[ \text{13th Month Pay} = \frac{\text{Total Basic Salary Earned During the Year}}{12} ]

Since a part-time employee’s annual basic salary is lower, the resulting 13th month pay is commensurately lower. However, the entitlement remains the same in principle—they receive one-twelfth (1/12) of the total basic salary actually earned in the calendar year.

4. Computation Details

4.1 Definition of Basic Salary

For purposes of computing 13th month pay, “basic salary” generally includes the compensation for days actually worked and paid leaves (if counted as working days). It typically excludes:

Allowances (e.g., cost of living allowance, transportation allowance)
Overtime pay
Premium pay for holiday or rest day work
Monetary value of unused leaves (unless required by company policy to be integrated into basic salary)

4.2 Impact of Unpaid Leaves or Absences

If a part-time employee frequently takes unpaid leaves or has absences that result in reduced pay, these will lower the total annual basic salary. Consequently, the 13th month pay based on that annual salary will also be lower.

4.3 Multiple Employers

It is possible for a part-time employee to be working for multiple employers simultaneously (e.g., a teacher holding teaching jobs in different schools). Each employer is individually responsible for paying 13th month pay based on the salary earned by the part-time employee in that employer’s company.

5. Payment Schedule and Deadlines

By law and tradition in the Philippines:

Deadline: The 13th month pay must generally be paid on or before December 24 of each year.
Partial Payments: Some employers choose to make partial or advanced payments (for instance, half in May or June and the other half in December). As long as the total amount due is fully paid on or before December 24, this practice is permissible.

6. Employer Obligations and Penalties for Non-Compliance

6.1 Employer’s Duty

Employers are required to compute and distribute 13th month pay correctly to all covered employees—including part-time employees—on or before the official deadline.

6.2 Reportorial Requirements

Employers are required to submit a report on compliance with 13th month pay laws to the DOLE (in some cases, through the DOLE regional office with jurisdiction).

6.3 Penalties and Liability

Failure to pay the 13th month pay, or any attempt to exclude part-time employees who are legally entitled to it, can result in:

Administrative fines
Possible monetary claims filed by affected employees through the DOLE or the National Labor Relations Commission (NLRC)
Legal action leading to additional costs, damages, and legal fees

7. Common Misconceptions

“Part-time employees are not eligible for 13th month pay.”
- Incorrect. PD 851 covers all rank-and-file employees regardless of whether they work full-time or part-time.
“Employees need to have worked the entire calendar year to qualify.”
- False. An employee only needs at least one month of service within the calendar year to be entitled to a proportionate 13th month pay.
“13th month pay is the same as a Christmas bonus.”
- Not necessarily. The 13th month pay is a legally mandated benefit, while a Christmas bonus (or other bonuses) are generally discretionary unless stipulated in a contract or collective bargaining agreement.

8. Practical Tips and Advice

For Part-Time Employees
- Keep a detailed record of hours worked and payslips to verify the total basic salary for the year.
- If unsure about the computation, politely request from Human Resources (HR) a breakdown of how they arrived at the 13th month pay figure.
For Employers
- Establish clear policies on computing 13th month pay for part-time workers.
- Ensure compliance with the statutory deadlines and submission of the 13th month pay compliance report to the DOLE.
- Consult a labor lawyer or DOLE advisory if there are unique operational circumstances (e.g., seasonal part-time work).

9. Conclusion

Yes, part-time employees in the Philippines are entitled to 13th month pay, as long as they meet the criteria for rank-and-file status and have worked for at least one month during the calendar year. The payment is computed in proportion to their total basic salary within the year, which naturally results in a lower amount than that for full-time employees but does not diminish their entitlement under the law.

Employers should recognize that the right to 13th month pay is a statutory obligation and ensure that all eligible employees—whether part-time or full-time—receive this benefit correctly and on time. Compliance not only satisfies legal requirements but also promotes fairness and morale within the workplace.

Disclaimer

This article is for general informational and educational purposes only. It does not constitute legal advice. For advice tailored to your specific circumstances, consult a licensed attorney or the Department of Labor and Employment (DOLE) in the Philippines.