Letter to a Lawyer
Dear Attorney,
Good day.
I am writing to seek your legal advice regarding my 13th-month pay. I am currently on maternity leave and noticed that my 13th-month pay, released last December 21, appears to have been reduced. I went on maternity leave starting in October. I was informed that the reduction is due to my leave status.
I would like to confirm if the reduction in my 13th-month pay is correct and compliant with labor laws. Your expert guidance on this matter would be highly appreciated.
Thank you for your time and assistance.
Sincerely,
A Concerned Employee
Exploring 13th Month Pay Adjustments During Maternity Leave
Introduction
The 13th-month pay is a statutory benefit mandated by Presidential Decree No. 851 in the Philippines. It is intended to provide employees with financial relief during the holiday season. However, concerns often arise regarding how this benefit is calculated, particularly for employees who have taken leaves of absence, such as maternity leave. This article explores the legal intricacies surrounding the computation of 13th-month pay for employees on maternity leave and offers insights into compliance with Philippine labor laws.
What is 13th Month Pay?
Definition and Legal Basis
Under Presidential Decree No. 851, all rank-and-file employees are entitled to receive a 13th-month pay equivalent to one-twelfth (1/12) of their total basic salary earned within the calendar year, provided they have worked for at least one month. This benefit must be paid no later than December 24 of each year.
Coverage and Eligibility
The following employees are entitled to the 13th-month pay:
- Rank-and-file employees – irrespective of the nature of employment or the amount of basic salary.
- Employees who worked at least one month – within the calendar year.
Exclusions include managerial employees and those earning purely commission-based compensation, unless the employer voluntarily grants this benefit.
Computation of 13th Month Pay
Formula
The 13th-month pay is computed using the formula:
[
\text{13th Month Pay} = \frac{\text{Total Basic Salary Earned During the Year}}{12}
]
What Constitutes “Basic Salary”?
Basic salary refers to earnings received by the employee for services rendered. It does not include the following:
- Overtime pay
- Premium pay
- Night shift differentials
- Holiday pay
- Other monetary benefits
Proportional Computation
If an employee did not work the entire calendar year (e.g., due to maternity leave), the 13th-month pay is proportionate to the number of months worked.
Example:
An employee with a monthly salary of PHP 20,000 who worked for only 10 months would receive:
[
\text{13th Month Pay} = \frac{PHP 20,000 \times 10}{12} = PHP 16,666.67
]
The Impact of Maternity Leave on 13th Month Pay
Understanding Maternity Leave Benefits
Maternity leave benefits are governed by the Expanded Maternity Leave Law (Republic Act No. 11210), which provides 105 days of paid leave for female workers. During this period, employees receive maternity leave benefits from the Social Security System (SSS).
13th Month Pay During Maternity Leave
According to Labor Advisory No. 1, Series of 2020, the basic salary excludes maternity leave benefits paid by the SSS because such benefits are not classified as compensation for services rendered. Since the 13th-month pay is based solely on actual salary earned for work done, the time spent on maternity leave will result in a proportional reduction in the 13th-month pay.
For instance:
If an employee with a monthly salary of PHP 20,000 takes maternity leave from October to December, her 13th-month pay computation would exclude these months:
[
\text{13th Month Pay} = \frac{\text{Salary Earned from January to September}}{12}
]
In this case:
[
\text{Salary Earned} = PHP 20,000 \times 9 = PHP 180,000
]
[
\text{13th Month Pay} = \frac{PHP 180,000}{12} = PHP 15,000
]
Legal Justification for Reduction
Exclusion of Non-Work Periods
The Labor Code of the Philippines specifies that the 13th-month pay is based on the actual compensation received for services rendered. Since maternity leave is a statutory benefit and not a payment for work done, it is excluded from the computation of the 13th-month pay.
Distinction Between Maternity Benefits and 13th Month Pay
Maternity leave benefits are paid by the SSS, not the employer. Therefore, these benefits do not qualify as part of the "basic salary" that serves as the basis for computing the 13th-month pay.
Employer Obligations
Employers are required to comply with the following:
- Timely Payment – Ensure that the 13th-month pay is released by December 24.
- Accurate Computation – Exclude periods covered by maternity leave benefits and ensure proportional computation.
- Transparency – Provide employees with a clear breakdown of their 13th-month pay computation to avoid disputes.
Failure to comply with these obligations may result in administrative penalties or complaints filed with the Department of Labor and Employment (DOLE).
Employee Rights and Remedies
Employees who believe their 13th-month pay was unlawfully reduced can take the following steps:
- Request an Explanation – Seek clarification from the employer regarding the computation.
- File a Complaint – Lodge a complaint with DOLE if the employer fails to comply with the law.
- Consult Legal Counsel – Seek legal assistance to explore further remedies.
Conclusion
The reduction of 13th-month pay for employees on maternity leave is consistent with Philippine labor laws, provided the computation excludes periods where no actual work was performed and no salary was earned. While maternity leave is a protected right, its benefits are distinct from the 13th-month pay. Employers must ensure compliance with labor laws, and employees should remain vigilant about their rights.
For further clarification or assistance, consulting a legal professional is highly recommended.