DOLE to Determine Which Companies Can Be Exempted from 13th-Month Pay

The Department of Labor and Employment (DOLE) announced on Thursday, October 8, their plans to conduct a study on which companies they can exempt from the mandatory 13th-month pay. 

In accordance with the exemption plan, DOLE will release an advisory to define which companies are considered to be “distressed” so they can qualify for exemption from the mandatory benefit during the COVID-19 pandemic.

DOLE Secretary Silvestre Bello III states that “Under the law, business establishments can be exempted if they are characterized as distressed.” 

He continued that deferring the benefit may be the more acceptable formula in addressing the issue.

DOLE will conduct a study on the exemption of micro, small, and medium-sized enterprises (MSMEs) from the mandatory pay. However, companies with a capitalization of ₱1 million and above are still required to provide the 13th-month pay to their employees. 

Meanwhile, the Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) denounced the law on instituting the deferment of the 13th-month pay among workers during the COVID-19 pandemic. 

ALU-TUCP stated that the law does not explicitly provide exemptions on which businesses can defer the benefit. The group added that DOLE must have meetings with affected workers as the proposed exemption could be a risky move for all concerned stakeholders. 

ALU-TUCP Spokesperson Alan Tanjusay expressed that “The government must continue giving subsidies directly to the workers. Once the money is given to the businesses, there’s no assurance that the funds from the government will help the workers.”

Additionally, Kilusang Mayo Uno (KMU) reminded the government that it is their responsibility to bail out businesses, especially MSMEs, in times of emergency while Defend Jobs PH appealed to the government to find alternatives in providing the 13th-month pay to workers, especially with the holiday season drawing closer amid the pandemic.