Republic of the Philippines J
HOUSE OF REPRESENTATIVES /
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

520

House Bill No.

Introduced by Representatives Ron P. Salo

EXPLANATORY NOTE

Section 18 of Article Il of the 1987 Philippine Constitution explicitly provides
that the State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.

Presidential Decree No. 851 institutionalized the 13! Month Pay in recognition
of the continuing struggle of the labor force in providing for the needs of their
families, as well as in incentivizing them to work harder for the betterment of the
economy and the society, in general, and for the good of their respective employers,
in particular.

However, despite the existence of the 13" Month Pay, many Filipino families
still struggle to sufficiently provide for their families because of meager salaries,
among others. With the continuously rising cost of living in the Philippines, it is
incumbent upon the State to address the plight of its workers in both the government
and private sectors.

In this proposal, it is mandated that all employers in the government and
private sector shall be required to give their employees a 14! Month Pay. regardiess
of the employees’ status of employment. The 13! Month Pay shall be paid to the
‘employees on or before May 31 of each year in anticipation of the school enrollment
of the employees’ dependents. The 14" Month pay shall be given to the employees
‘on or before November 30 of each year in time for the traditional Christmas
celebrations.

The 14% month pay also aims to incentivize and motivate all employees to
work harder and increase productivity.

In view of the foregoing, the approval of this bill is urgently sought.

Gy

RON P. SALO
KABAYAN Partylist

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

House Bill No. 920

Introduced by Representatives Ron P. Salo

AN ACT
MANDATING 14™ MONTH PAY
FOR ALL EMPLOYEES IN THE GOVERNMENT AND PRIVATE SECTOR
REGARDLESS OF STATUS OF EMPLOYMENT

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. — This Act shall be known as the “14" Month Pay
Law."
SEC. 2. Declaration of Policy. ~ The State affims labor as a primary social
economic force. It shall protect the rights of workers and promote their welfare.

SEC. 3. 14" Month Pay. — All employees in the private sector entitled to 13
month pay shall also be entitled to 14! month pay, which shall be equivalent to one
month of the employees’ total basic monthly salary.

SEC. 4. Government Employees. - All government employees regardless of
their employment status shall also be entitled to both 13" month pay and 14" month

Pay.

SEC. 5. Exempted Employers. - The rules governing the exemption of
employers in the private sector from paying 13 month pay shall also apply to 14%
month pay.

SEC. 6. Schedule of Release of 13" and 14" Month Pay. - The existing
13!" month pay shall be released by the employer on or before May 31 and the 14!"
month pay shall be released on or before November 30 of each calendar year

SEC. 7. Prorated 14" Month Pay. — For employees employed for less than
one (1) year, their 14 month pay shall be prorated according to the number of
months served. In no case shall the 14" month pay be less than 1/12 of the
employees’ total basic monthly salary.

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SEC. 8, Tax Implications. ~ The 14" month pay shall be excluded from the
computation of the employee's gross income; Provided, that it shall not exceed the
allowed exemptions pursuant to the National Intemal Revenue Code or its
Implementing Rules and Regulations.

SEC. 9. Implementing Rules and Regulations. - The necessary rules and
regulations to carry out the provisions of this Act shall be issued within thirty (30)
days from the approval of this Act by the: (a) Department of Labor for the private
sector; (b) Department of Finance (DOF) and Department of Budget and
Management (DBM), in consultation and Civil Service Commission (CSC), for the
government sector; (c) SSS for its members; and (d) GSIS for its members.

SEC. 10. Separability Clause. — If any provision of this Act is declared invalid
or unconstitutional, the remaining parts or provisions not affected shall remain valid

SEC. 11. Repealing Clause. - All acts, executive orders, administrative
orders, proclamations, rules and regulations or parts thereof inconsistent with any of
the provisions of this Act are hereby repealed or modified accordingly.

SEC. 12. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in two (2) newspapers of general circulation.

Approved.

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