DOLE mulls subsidizing 13th month pay for ‘distressed’ employers

The Department of Labor and Employment (DOLE) is considering to provide subsidy to “distressed” employers to enable them to give out the mandatory 13th month pay to their employees.

In a virtual press briefing on Wednesday, Labor Undersecretary Benjo Benavidez said among the strategy proposals discussed during the National Tripartite Council meeting with labor groups, employers group, and the government is the possibility of extending financial assistance to companies affected by the COVID-19 pandemic to enable them to comply with the 13th Month Pay law.

“One of the options is to provide subsidy and assistance to the distressed employer so that makapagbayad sila ng kanilang mga obligasyon,” Benavidez said.

“Lumabas sa diyalogo ‘yung tulong na puwedeng ibigay ng ating pamahalaan sa mga kababayan nating maliliit na negosyante, MSMEs (micro, small, and medium enterprises) para tulungan sila sa kanilang obligasyon na bayaran ang 13th month pay ng kanilang mga manggagawa sila man ay nakabalik na o nakasarado pa rin,” the Labor official said.

The government, he said, recognizes that several sectors are still not allowed to resume their business operations since most of the country, especially Metro Manila, is still under community quarantine against COVID-19’s spread.

Late last week, Labor Secretary Silvestre Bello III floated the possibility of giving exemptions or deferring the payout of 13th month benefit amid the challenges brought by the pandemic on the economy.

The proposal, however, was met with opposition from the labor sector as well as from lawmakers. The Palace, itself, said employers cannot defer the release of 13th month pay.

Benavidez said the dialogue between the government, labor groups, and employers was productive and parties have reached “some sort of consensus” that the 13th month pay is a labor standard that needs to be followed while recognizing that many MSMEs are struggling to keep their businesses afloat.

“Kami po ay nagagalak dahil ang mga employer ay bukas sa panukala na ang gobyerno ay tutulungan sila para matugunan ang obligasyon nila sa 13th month pay,” he said.

“Willing naman po tayong tumulong kung makakaya,” he added.

The Labor official also said that among the matters discussed during the dialogue was to define what is a “distressed” employer.

Among the criteria to consider that an employer is distressed is that the company or business establishment have seen at least 50% loss for the last three quarters.

“Kahit may criteria kung ano o sino ang distressed employer ay kailangan pa rin naman nila pumunta sa DOLE para ie-evaluate natin kung sila ay talagang distressed employer,” Benavidez said.

“Napakadelikado na magbigay ng ‘wholesale’ na definition ng distressed employer at sila ay ma-extend o mabigyan ng subsidy... Ang gusto namin tignan at patunayan nila,” he added.

The DOLE, however, is yet to finalize the definition of a “distressed” employer.

While the government is considering providing subsidy, the Labor official said exempting companies from giving 13th month pay will be the “last option.”

“Isa [‘yan] sa mga option... pero wala pa naman pong final na desisyon,” Benavidez said.

Under Presidential Decree 851, all employers are mandated to release the 13th month pay on or before December 24, regardless of the nature of the workers’ employment.

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

The law’s implementing rules and regulations, however, states that “distressed employers shall qualify for exemption” upon prior authorization by the Secretary of Labor.—AOL, GMA News