Claiming Delayed 13th Month Pay After Resignation
A Comprehensive Legal Guide under Philippine Law

1. Overview of 13th Month Pay in the Philippines

In the Philippines, the 13th month pay is a statutory benefit mandated by Presidential Decree No. 851 (PD 851). Under PD 851 and its implementing rules, all rank-and-file employees in the private sector who have worked for at least one month during the calendar year are entitled to receive 13th month pay. This requirement is further clarified by Department of Labor and Employment (DOLE) guidelines.

Key points to remember include:

Who is covered: Rank-and-file employees (whether permanent, probationary, or contractual), provided they have worked for at least one month in a calendar year.
Exclusions: Certain managerial employees, those already receiving the equivalent of 13th month pay or more in the form of Christmas bonuses or profit-sharing payments (under specific conditions), and government employees (unless covered by a distinct arrangement) are typically excluded from PD 851.
Amount: At its most basic formula, 13th month pay is computed as:
[ \text{13th Month Pay} = \frac{\text{Total Basic Salary Earned in the Calendar Year}}{12} ]
Payment deadline: Employers must pay the 13th month pay on or before December 24 of each year.

2. Entitlement of Resigned Employees

a. Pro-rated 13th Month Pay
Employees who resigned or were separated from employment before December 24 of the calendar year are still entitled to a pro-rated 13th month pay. The computation for a resigned employee is typically:

[ \text{Pro-rated 13th Month Pay} = \frac{\text{Total Basic Salary Earned from Jan. 1 until Resignation Date}}{12} ]

This ensures that even if an employee does not complete the entire calendar year, they receive a portion of the 13th month pay corresponding to the period they actually worked.

b. Inclusion in Final Pay
In practice, many employers include the pro-rated 13th month pay along with other final pay components (e.g., unpaid salaries, unused leave conversions, etc.). While there is no strictly codified “final pay release date” in the Labor Code, the DOLE typically recommends releasing the final pay (including the pro-rated 13th month) within 30 days from the date of final separation or resignation, barring any complexities.

3. Delayed Payment of 13th Month Pay

Despite the legal requirement, there are instances when employers delay or fail to pay the 13th month pay. This delay may occur:

Inadvertently (e.g., administrative oversight, cash flow constraints).
Deliberately (e.g., dispute with the employee, non-compliance with labor laws).

a. Legal Consequences for Employers

Under Philippine labor law, the 13th month pay is classified as a labor standard benefit. Non-compliance or delay in paying labor standards benefits may result in:

Administrative sanctions: DOLE can impose administrative fines or penalties on erring employers.
Labor standards case: Employees may file a money claim for unpaid or underpaid 13th month pay.
Criminal liability (in extreme cases): Willful refusal to comply may expose the employer to criminal sanctions for violating labor laws.

b. Common Reasons Given by Employers

Company financial difficulties: While financial hardship can occur, employers are not exempt from paying 13th month pay.
Pending clearance or documentation: Employers often require “final clearance” (e.g., return of company property) before releasing pay. While certain clearances are acceptable, they should not be used unreasonably to withhold mandatory benefits indefinitely.
Misinterpretation of the law: Some employers believe that resigned employees are not entitled to 13th month pay at all. This is incorrect. Resigned employees are entitled to the pro-rated portion.

4. Remedies for Employees to Claim Delayed 13th Month Pay

If your employer has delayed or failed to pay your pro-rated 13th month pay after resignation, you have several recourses:

Demand/Follow-up with the Employer Internally
- Send a written demand letter or an email reminding your employer of your 13th month pay entitlement.
- Request a specific timeline and keep all communications in writing for documentation.
File a Complaint with the Department of Labor and Employment (DOLE)
- If internal efforts fail, you can file a labor standards complaint at the nearest DOLE Regional/Field Office.
- DOLE typically summons the employer for a Single Entry Approach (SEnA) mandatory conciliation conference to resolve the matter quickly.
Elevate to the National Labor Relations Commission (NLRC)
- If settlement talks fail at DOLE or if the employer contests the claim, you may file an illegal deduction or underpayment case (a money claim) with the NLRC.
- The NLRC has the jurisdiction to adjudicate money claims arising from employer-employee relations.
Small Claims Court (if applicable for specific amounts)
- Money claims with lower thresholds (below a certain amount) might also be handled under small claims procedures. However, most employees typically find the NLRC route more straightforward for labor-related claims.

5. Prescriptive Period for Money Claims

Article 305 (previously Article 292) of the Labor Code provides that all money claims arising from employer-employee relations shall be filed within three (3) years from the time the cause of action accrued (i.e., from when the payment was withheld or became due). This means:

If you resigned and your 13th month pay was not given upon separation or by the annual cutoff, you usually have 3 years from that date to file a claim.
After the 3-year period, your claim may be barred by prescription, making it legally unenforceable.

6. Calculation Nuances and Taxation

Tax Exemption Threshold
- Under the current Philippine laws (including the TRAIN Law), 13th month pay and other benefits (e.g., Christmas bonuses) are tax-exempt up to PHP 90,000. Any amount beyond that threshold is subject to income tax.
- For resigned employees with a pro-rated 13th month, it is very likely to fall below the tax-exempt ceiling unless they have large year-round bonuses that push them beyond PHP 90,000.
Components Included in Basic Salary
- Typically, basic salary excludes allowances, overtime pay, premium for night shifts, holiday pay, and cost-of-living allowances (COLA). Only the basic salary portion is considered in computing 13th month pay unless a company policy or Collective Bargaining Agreement (CBA) states otherwise.
Deductions for Employees with Excess Leave
- If an employee has taken more leave than their leave credits or has other pending liabilities, employers sometimes attempt to offset the amounts from the final pay (including 13th month pay). Employers can only do so for lawful obligations, and such deductions must be reasonable and documented.

7. Best Practices for Resigned Employees

Secure Documentation: Keep payslips, pay stubs, employment contracts, and notice of resignation or separation documents.
Check Company Policy: Review the employee handbook or HR policies on final pay release and 13th month pay.
Communicate in Writing: If following up on delayed 13th month pay, always communicate via letters or emails for proper documentation.
Know the Timeline: Although not strictly provided by law, DOLE suggests releasing final pay and 13th month pay within 30 days from an employee’s last day.
Seek Professional Advice if Necessary: For complex situations or where large sums are involved, consulting a labor lawyer or a DOLE regional office can provide clarity and guidance.

8. Key Takeaways

Mandatory Benefit: 13th month pay is mandatory under PD 851.
Pro-rated for Resigned Employees: Even if you resign before December 24, you are entitled to a pro-rated 13th month pay.
Final Pay Inclusions: The pro-rated 13th month pay is typically part of the “final pay” due within a reasonable time after separation.
Legal Remedies Exist: You may file a complaint with DOLE (and subsequently the NLRC) if your employer delays or withholds payment.
3-Year Prescription: Money claims, including 13th month pay, must be filed within three years from the date they become due.

9. Conclusion

In the Philippine labor landscape, the 13th month pay is not merely a discretionary bonus; it is a statutory obligation that employers owe to eligible employees, including those who have resigned partway through the year. While delays and disputes can arise, employees have several legal avenues to enforce their rights. By understanding the rules on computation, timelines, and legal recourses, resigned employees can better assert their entitlement to this crucial benefit.

For any specific concerns or unique circumstances, it is always prudent to consult directly with the Department of Labor and Employment or seek legal counsel to ensure your rights are protected and any due benefits are rightfully claimed.