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Category: HR and Labor

[See also previous Guidelines; Revised Guidelines on the Implementation of the 13th Month Law; Basic Discussion on 13th-month Pay; Who are the Employees Entitled to 13th month Pay?; How to Compute 13th-month Pay; and Thirteenth-month Pay Distinguished from Bonus]

Presidential Decree No. 851

Requiring All Employers to Pay their Employees a 13th-Month Pay

WHEREAS, it is necessary to further protect the level of real wages from the ravage of worldwide inflation;

WHEREAS, there has been no increase in the legal minimum wage rates since 1970;

WHEREAS, the Christmas season is an opportune time for society to show its concern for the plight of the working masses so they may properly celebrate Christmas and New Year.

NOW, THEREFORE, I, FERDINAND E. MARCOS, by virtue of the powers vested in me by the Constitution, do hereby decree as follows:

Section 1. All employers are hereby required to pay all their employees receiving a basic salary of not more than P1,000 a month, regardless of the nature of their employment, a 13th-month pay not later than December 24 of every year. (Note: The salary ceiling of P1,000 was removed by President Corazon Aquino in 1986 through Memorandum Order No. 26, which provides: "Section 1 of Presidential Decree No. 851 is hereby modified to the extent that all employers are hereby required to pay all their rank-and-file employees a 13th-month pay not later than December 24 of every year.")

Sec. 2. Employers already paying their employees a 13th-month pay or its equivalent are not covered by this Decree.

Sec. 3. This Decree shall take effect immediately.

Done in the City of Manila, this 16th day of December 1975.