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Companies 'in distress' may be exempted from giving 13th month pay —Bello

Micro, small, and medium enterprises (MSMEs) that are "in distress" can be allowed not to give its employees the mandatory 13th month pay, Labor Secretary Silvestre Bello III said Friday.

Interviewed on Super Radyo DzBB, Bello said this exemption is provided by law.

"Under the law, kelangan bayaran ang 13th month pay.  Ang exemption diyan is kapag ang company is in distress," Bello said. "Most probably yung mga in distress ay yung galing sa micro, small and medium industries."

Bello was referring to Presidential Decree No. 851, which mandates employers from the private sector to pay their rank-and-file employees a 13th month pay not later than December 24 every year.

The 13th month pay, under PD 851, should be equivalent to 1/12 of an employee's basic annual salary.

These companies, however, have to prove to the government that they no longer have the capability to give their employees 13th month pay.

Amid the COVID-19 pandemic that has crippled the economy and left  many industries struggling to cope up, Bello said the Department of Labor and Employment will soon issue an advisory on what companies can be considered "in distress."

"Whether they are in distress or not ay magpapalabas kami ng advisory tungkol diyan. Yan ang pag-uusapan namin [with stakeholders], gawan natin ng paraan para maipaliwanag natin kung sino yung mga kumpanya na considered to be in distress," he said without mentioning a timeline.  —KBK, GMA News