Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City, Metro Manila
SEVENTEENTH CONGRESS

First Regular Session

HOUSE BILLNO.__402 _

Introduced by Representative Rodrigo A. Abellanosa

EXPLANATORY NOTE

Our workers have continuously fought for sufficient wages that will provide their families with
comfortable lives. Their battle, having seen small victories, though, has yet to be won. Those of
us who sought public office chose to do so because we all want to serve the people. We may
not fully succeed in immediately uplifting the quality of their lives, but in smaller ways, we all aim
to alleviate their plight somehow.

This bill seeks to provide additional benefits for our working classes by providing for the
mandatory payment of the 14" month pay. In 1976, Presidential Decree No. 854
institutionalized the 13" month pay in recognition of the masses’ continuous struggle to provide
the needs of their families. It also recognized the tradition culturally ingrained in our society of
celebrating the Christmas holidays.

More recently, the government has taken the first step in making this 14" month pay possible
for government employees through Executive Order No. 201 signed in February 2016. We
cannot leave our privately-employed workers empty-handed, can we?

Many workers strive to barely keep their heads above water with their meager salaries while
education continues to be a drain to their resources. Every year, when school opens, our
workers find themselves in a fix trying to provide for their dependents’ (be it their children,
siblings, nephews, nieces, or any relativefacquaintance they have taken under their wing)
school fees and other educational requirements. In this connection, this bill proposes than the
additional month’s pay be included in workers’ compensation packages to cover for s uch
expenses, making our labor force's lives a little easier, while ensuring that the youth have
access to education.

This bill also recognizes that motivation is a key factor in promoting productivity in our
workforce.Rewards have proven to be useful drivers or motivation and such additional
structured incentive may be expected to translate to more effective personnel and efficient
operations

In view of the foregoing, immediate approval of this bill is eamestly sought

(uss

—
RODRIGO A. ABELLANOSA


Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City, Metro Manila
SEVENTEENTH CONGRESS

First Regular Session

HOUSE BILL No, _402

Introduced by Representative Rodrigo A. Abellanosa

AN ACT
REQUIRING ALL EMPLOYERS TO PAY THEIR EMPLOYEES
A147 MONTH SALARY

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 Salary Act.”

SEC. 2. Incentive. - All employers are hereby required to pay all their employees, regardless of
the nature of their employment, a 14-month salary every year, in an amount equivalent to the
13%-month pay

SEC. 3. Schedule of Release. - The existing 13"-month pay shall be released on or before the
end of June of every year while the 14"-month salary shall be released on or before the end of
December of each year. Provided, that the frequency of payment may be the subject of
agreement between employer and employee or any recognizedicollective bargaining agent of
employees.

SEC. 4. Tax implications. - The 14"-month salary, along with the 13"-month pay and other
benefits, shall be exluded from the computation of gross income. Provided, however, that the
total exclusion shall not exceed eighty-two thousand pesos (P82,000), as mandated in the
National Internal Revenue Code, as amended.

SEC. 5 Implementing Rules and Regulations. - The Secretary of Labor and Employment shall
promulgate the necessary rules and regulations for the effective implementation of this Act.

SEC. 5. Separability Clause. - If any provision of this Act is declared unconstitutional or invalid,
other parts or provisions hereof not affected thereby shall continue to be in full force and effect.


SEC. 6. Repealing Clause. - All laws, orders, issuances, circulars, rules and regulations or parts
thereof, which are inconsistent with the provisions of this Act are hereby repealed or modified
accordingly

SEC. 7. Effectivity. - This Act shall take effect on January 1, 2017, following its publication in at
least two (2) newspapers of general circulation.

Approved,