Sotto seeks 14th month pay for rank and file

MANILA, Philippines – Increase in minimum wage is not enough to help ordinary employees cope with rising prices of commodities, health, and education.

So a senator wants to require the government and the private sector to give their rank and file a 14th month pay.

Assistant Minority Leader Vicente Sotto III’s Bill 1645 – to be known as the 14th Month Pay Law if passed – seeks the additional one-month pay for rank-and-file employees who have been on the job for at least one month during the calendar year.

This is "regardless of [their] employment status, designation and irrespective of the method by which their wages are paid."

Sotto said there was an "indispensable need to provide our Filipino laborers…additional 14th month pay," citing the insufficiency of recent minimum-wage increases in helping workers meet rising commodity prices.

The 13th month pay currently mandated by law, released by employers just before the holidays, "is gobbled up by Christmas expenses," he said.

Why mandatory?

"We need extra earnings in the middle of the year to help in school and medical expenses. Health and education needs of the ordinary Filipino must be assisted by our government," the senator said.

Sotto said the 14th month pay needed to be mandatory because "improved business earnings have not cascaded on its own."

The wage board approved on September 6 a P10-a-day increase in minimum wage and P15 additional cost-of-living-allowance for Metro Manila workers.  

Labor groups had asked for for an increase of P83 to P125 wage hike a day, but the Employers' Confederation of the Philippines warned this would result in company closures and job losses.

In August, the Joint Foreign Chambers of the Philippines – composed of 7 major foreign investor groups in the country – said the across-the-board wage increases would result in layoffs, relocation of foreign investors, and higher inflation.

How to compute, pay

Under Sotto’s proposal, the 14th month pay should be at least half of the total basic salary earned by the employee within the calendar year.

It shall include "all remunerations or earning paid by the employer for services rendered but does not include allowances  and monetary benefits which are not considered or integrated as part of the regular or basic salary."

The bill says the 13th month pay shall be paid not later than June 14th, while the 14th month pay shall be paid not later than December 24th of every year.

Employers and employees, however, can agree on other arrangements for the schedule of those payments, the bill says. – Rappler.com