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

18 Congress
First Regular Session

House Bill No. _ 0558

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 riot
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. 851 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.

‘The government has taken the first step: i 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 relative/acquaintance 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 such 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 s earnestly sought.

RODRIGO A. ABELLANOSA


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

18" Congress
First Regular Session

~~ 0558
House Bill No.

Introduced by Representative Rodrigo A. Abellanosa

AN ACT
REQUIRING ALL EMPLOYERS TO PAY THEIR EMPLOYEES
A14™ MONTH SALARY

Be it enacted by the Senate and the Housc 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 recognize/collective bargaining agent of employees.

SEC. 4. Tax implications. - The 14*-month salary, along with the 13"-month pay and other
benefits, shall be exiuded from the computation of gross income. Provided, however, that the total
exclusion shalll 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, issuanc2s, 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,