features the full text ofRULES
IMPLEMENTING THE 13TH-MONTH PAY LAWPresidential
Decree No. 851
NO. 851 RULES
DECREE NO. 851
By virtue of the
powers vested in me by law, the following rules and regulations
Decree No. 851 are hereby issued for the guidance of all concerned.
Payment of 13th-month Pay. - All employers covered by Presidential
Decree No. 851, hereinafter referred to as the
shall pay to all their employees receiving a basic salary of not more
P1,000 a month a thirteenth-month pay not later than December 24 of
Sec. 2. Definition
of certain terms. - As used in this issuance:chanroblesvirtuallawlibrary
pay" shall mean one twelfth (1/12) of the basic salary of an
within a calendar year;
salary" shall include all remunerations or earnings paid by an
to an employee for services rendered but may not include cost-of-living
allowances granted pursuant to Presidential Decree No. 525 or Letter of
Instructions No. 174, profit-sharing payments, and all allowances and
benefits which are not considered or integrated as part of the regular
or basic salary of the employee at the time of the promulgation of the Decree
on December 16, 1975.
Sec. 3. Employers
covered. - The Decree
shall apply to all employers except to:chanroblesvirtuallawlibrary
employers, such as (1) those which are currently incurring substantial
losses or (2) in the case of non-profit institutions and organizations,
where their income, whether from donations, contributions, grants and
earnings from any source, has consistently declined by more than forty
(40%) percent of their normal income for the last two (2) years,
to the provision of Section 7 of this issuance;
and any of its political subdivisions, including government-owned and
corporations, except those corporations operating essentially as
subsidiaries of the Government;
already paying their employees 13-month pay or more in a calendar year
or its equivalent at the time of this issuance;
of household helpers and persons in the personal service of another in
relation to such workers; and
of those who are paid on purely commission, boundary, or task basis,
those who are paid a fixed amount for performing a specific work,
of the time consumed in the performance thereof, except where the
are paid on piece-rate basis in which case the employer shall be
by this issuance insofar as such workers are concerned.
As used herein,
workers paid on piece-rate basis shall refer to those who are paid a
amount for every piece or unit of work produced that is more or less
replicated, without regard to the time spent in producing the same.
ON COMPLIANCE WITH P.D.
The term "its
equivalent" as used in paragraph c) hereof shall include Christmas
bonus, mid-year bonus, profit-sharing payments and other cash bonuses
to not less than 1/12th of the basic salary but shall not include cash
and stock dividends, cost of living allowances and all other allowances
regularly enjoyed by the employee, as well as non-monetary benefits.
an employer pays less than 1/12th of the employees basic salary, the
shall pay the difference.
Sec. 4. Employees
covered. - Except as provided in Section 3 of this issuance, all
of covered employers shall be entitled to benefit provided under the Decree
who are receiving not more than P1,000 a month, regardless of their
designation or employment status, and irrespective of the method by
their wages are paid, provided that they have worked for at least one
during the calendar year.
Sec. 5. Option
of covered employers. - A covered employer may pay one-half of the
13th-month pay required by the Decree
before the opening of the regular school year and the other half on or
before the 24th day of December of every year.
where a union has been recognized or certified as the collective
agent of the employees therein, the periodicity or frequency of payment
of the 13th-month pay may be the subject of agreement.
shall prevent employers from giving the benefits provided in the Decree
to their employees who are receiving more than One Thousand (P1,000)
a month or benefits higher than those provided by the Decree.
Sec. 6. Special
feature of benefit. - The benefits granted under this issuance
not be credited as part of the regular wage of the employees for
of determining overtime and premium pay, fringe benefits, as well as
contributions to the State Insurance Fund, social security, medicare
private welfare and retirement plans.
Sec. 7. Exemption
of Distressed employers. - Distressed employers shall qualify for
from the requirement of the Decree
upon prior authorization by the Secretary of Labor. Petitions for
may be filed within the nearest regional office having jurisdiction
the employer not later than January 15, 1976. The regional offices
transmit the petitions to the Secretary of Labor within 24 hours from
Sec. 8. Report
of compliance. - Every covered employer shall make a report of his
compliance with the Decree
to the nearest regional labor office not later than January 15 of each
shall conform substantially with the following form:chanroblesvirtuallawlibrary
1. Name of
product or business
of workers benefited
of benefits granted
and tel. no. of person giving information
Sec. 9. Adjudication
of claims. - Non-payment of the thirteenth-month pay provided by
and these rules shall be treated as money claims cases and shall be
in accordance with the Rules Implementing the Labor
Code of the Philippines and the Rules of the National Labor
Prohibition against reduction or elimination of
- Nothing herein shall be construed to authorize any employer to
or diminish in any way, supplements, or other employee benefits or
practice being enjoyed by the employee at the time of promulgation of
Sec. 11. Transitory
Provision. - These rules and regulations shall take effect
and for purposes of the 13th-month pay for 1975, the same shall apply
to those who are employees as of December 16, 1975.
Philippines, 22 December 1975.
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