Mandatory 14th month pay for employees

The House Committee on Labor and Employment commenced the discussion of the “14th-month pay bill” not long after the approval of the extension of maternity leave.

Representative Rodrigo Abellanosa of Cebu City 2nd District stated that the mandatory 14th-month pay is needed amidst the rising prices of good such as rice and petroleum products. Not to mention the increased fares. He added that the employees’ take-home pay could no longer pay their home needs.

Under the new suggested bill, the 13th-month pay should be given on May or June when the school year starts. The 14th-month pay should be given or November or December in time for the Christmas Holidays.

Mandatory 14th month pay for employees

Source: Rappler File Photo

Many employees have voiced their agreement, however, the employers have other opinions. They said that this bill will only increase their company costs. According to the Employers Confederation of the Philippines (ECoP), the suggested bill will increase their company costs and this will give a disadvantage to them since the competitors can offer cheaper imports and smuggled goods. Either the consumers will have to adjust with the price change of the employers have to lay off some of the employees to compensate with the company costs caused by the mandatory 14th-month pay. It can even cause them to just close the business.

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ECoP then suggested that the legislators consider skills training and other productivity-focused measures instead of the mandatory 14th-month pay. It is better for workers to work hard for it first before they get the incentives.

Add to that, the Department of Labor Bureau of Working Condition revealed that 1 in every 10 companies was unable to pay the 13th-month pay in 2017. As an alternative, the National Wages and Productivity Board alongside the Department of Trade and Industry suggest that there should be certain categorization since not all can comply with the mandatory 14th-month pay.