A Philippine labor-law article on when bonuses are still due, how they are computed, and what rules control disputes

I. Meaning of “floating status” and its legal effect

A. What “floating status” is

In Philippine workplace practice, “floating status” usually refers to a temporary layoff / temporary off-detail where an employee is not given work or assignments because of lack of clients, lack of projects, business slowdown, or a bona fide suspension of operations. It is common in manpower, security, housekeeping, and project-based arrangements, but it can occur in any industry.

B. The governing rule: temporary suspension of operations (six-month limit)

Under the Labor Code concept of bona fide suspension of business operations (often associated with “floating status”), the employer may temporarily stop giving work for a limited period. The key legal consequences are:

Employment relationship continues during the temporary layoff.
As a general rule, no work, no pay applies—i.e., the employee usually does not earn wages while not deployed or not required to work.
The temporary layoff cannot be indefinite; if the employer fails to recall/redeploy within the legally tolerated period (commonly treated as not more than six (6) months), the situation may ripen into constructive dismissal or require lawful separation with appropriate benefits, depending on the facts.

This matters for bonuses because most bonus entitlements are tied either to (a) wages earned, (b) service rendered, (c) employment status on a payout date, or (d) company discretion—and floating status affects each differently.

II. Start with the most important distinction: 13th month pay vs. “bonus”

In the Philippines, many people call the 13th month pay a “bonus,” but legally it is typically treated as a mandatory statutory benefit (for covered private-sector employees), separate from discretionary or company-granted bonuses.

A. 13th month pay (statutory)

General rule: The 13th month pay is based on basic salary actually earned within the calendar year.

Formula (standard): 13th month pay = Total basic salary earned during the calendar year ÷ 12
Effect of floating status: During periods of floating status where there is no paid work and no basic salary earned, those months generally contribute zero to the total basic salary earned. Result: the employee is still typically entitled to a prorated 13th month pay, but only based on the basic salary actually paid/earned before (and/or after) the floating period.

Example: Employee earns ₱20,000/month basic pay. Worked and was paid January–March (₱60,000 total), then floated April–December with no pay. 13th month pay = ₱60,000 ÷ 12 = ₱5,000.

Key point: Floating status usually reduces the 13th month pay simply because the employee did not earn basic salary during that time—not because the employee “loses” the right entirely.

B. “Bonuses” other than 13th month pay (non-statutory unless promised)

Bonuses like “Christmas bonus,” “year-end bonus,” “performance bonus,” “profit-sharing bonus,” “signing bonus,” “attendance bonus,” or “productivity bonus” depend on their legal character:

Discretionary bonus (management prerogative): not demandable unless promised/earned.
Contractual/CBA bonus: demandable according to the contract/CBA terms.
Policy-based bonus (employee handbook, written program, memos): demandable according to the stated rules.
Bonus that has ripened into a company practice: may become demandable and protected by the non-diminution of benefits principle if consistently and deliberately given over time under conditions showing it is no longer purely discretionary.

III. The core legal questions that decide bonus entitlement during/after floating status

When a floating-status employee asks, “Am I entitled to a bonus?” the analysis usually turns on these questions:

1) What kind of bonus is it?

Mandatory (13th month) → prorated based on basic salary earned.
Non-mandatory → depends on promise, policy, CBA/contract, or established practice.

2) What are the bonus conditions—service-based, status-based, or performance-based?

Common condition types:

A. Service-rendered / “earned” bonuses

Based on actual work, outputs, billable hours, sales, productivity, or performance ratings.
Floating status effect: typically no accrual during months with no service rendered; many plans naturally lead to a prorated or reduced bonus.

B. Status-on-a-date bonuses (“must be employed as of…”)

Eligibility depends on being an employee on a cutoff/payout date (e.g., “must be on payroll as of December 15”).
Floating status effect: since employment continues, an employee on floating status may still meet “employed as of” rules—unless the plan expressly requires “active service,” “not on leave without pay,” or “not off-detail.”

C. Attendance/discipline-conditioned bonuses

Requires perfect attendance, no tardiness, no absences, no infractions, etc.
Floating status effect: depends on whether the plan treats floating status as neutral, or as a disqualifying “no work/no attendance” situation.

D. Profit-based or “subject to management discretion” bonuses

Clearly conditioned on profits, financial results, or management approval.
Floating status effect: the employer often retains latitude, but must still act consistently with any rules it set and with past practice (if it has become a benefit).

3) Is the bonus already demandable under non-diminution of benefits?

Even if a bonus began as voluntary, it may become demandable if it has become a longstanding and consistent company practice—meaning it is regularly given in a manner that shows it is no longer purely discretionary.

Typical indicators that strengthen an employee’s claim:

It was given consistently for years.
It was given in a fixed amount or a stable formula.
It was not clearly tied to profits or discretion each year.
The employer communicated it as part of compensation/benefits.

Typical indicators that weaken a claim:

Clear written statements that it is discretionary and dependent on profits/management approval.
The amount varies widely based on financial results.
The employer withheld it in prior years without challenge or with documented reasons.

Floating status interacts with this because if a bonus is a protected practice, the employer cannot simply exclude floating employees in an arbitrary or inconsistent way compared with how it treated similarly situated employees in prior years.

IV. Practical rules on bonus entitlement in common floating-status scenarios

Scenario A: Employee is on floating status when the bonus is paid

1) 13th month pay:

Generally still due prorated based on basic salary earned during the year.

2) Christmas/year-end bonus (non-statutory):

If the bonus is purely discretionary: employer may lawfully decide not to give it, or to limit it, subject to its own declared rules and good faith.
If the bonus is contractual/policy-based/practice-based: eligibility depends on the plan’s conditions:
- If it requires only “still employed as of payout date,” floating employees may still qualify because they remain employees.
- If it requires “active service” or excludes “leave without pay/off-detail,” floating employees may be excluded if that exclusion is clearly written, consistently enforced, and not a disguised reduction of a matured benefit.

Scenario B: Employee returns from floating status and asks for the “missed” bonus

A common misunderstanding is the idea that a bonus “accrues” during floating and becomes payable upon return. The more typical legal outcomes:

13th month pay: still computed only from basic salary actually earned; there is no “back pay” component for months not paid.
Performance/productivity bonuses: usually no accrual for months where no work was performed, unless the plan says otherwise.
Status-based bonuses: if the employee was not eligible at payout time under the plan (e.g., not on payroll/active status by the cutoff date), the employee generally cannot claim it later—unless the exclusion is unlawful or violates non-diminution due to established practice.

Scenario C: Employee is separated during/after floating status

If separation occurs (whether by lawful termination due to authorized causes, closure, redundancy, or constructive dismissal findings), bonus treatment typically follows:

Final pay almost always includes prorated 13th month pay up to the last day the employee earned basic salary in the year.
Non-statutory bonuses:
- If the bonus is already earned under a formula (e.g., commissions, completed targets, vested performance incentives), it may be payable even after separation depending on plan terms.
- If it requires being employed as of a future payout date, separation before that date may defeat eligibility—unless the rule is legally infirm or applied in bad faith.

V. Floating status is not the same as “preventive suspension”

“Suspension” in HR can mean different things:

Floating status / temporary layoff: business-related lack of work or suspended operations; typically unpaid; governed by rules on temporary suspension and redeployment timelines.
Preventive suspension: disciplinary measure to prevent interference in an investigation; generally time-limited and governed by due process rules.

Bonus effects differ. A preventive suspension may still be treated under specific company rules and due process outcomes; floating status usually turns on no work, no pay and eligibility conditions.

VI. How to assess a specific bonus claim (a structured checklist)

To determine whether a floating-status employee is entitled to a particular bonus, examine:

The document that creates the bonus
- Employment contract
- CBA
- Company handbook or policy
- HR memo/bonus program guidelines
- Past notices/emails announcing the bonus
Eligibility conditions
- “Must be employed as of…”
- “Must be actively working” / “must not be on leave without pay”
- Minimum months of service
- Performance rating threshold
- Proration rules
Past practice evidence
- Payroll records for bonus payouts across years
- Whether floating employees previously received the bonus
- Whether the employer consistently prorated or excluded certain categories
Consistency and non-diminution
- Was the benefit consistently given such that removing it now is a reduction of benefits?
- Were exclusions applied uniformly, or selectively?
Good faith business justification
- For profit-based or discretionary bonuses, was the reason legitimate and consistently applied (e.g., documented losses), or was it used to target certain employees?

VII. Computation notes and common disputes

A. Proration of 13th month pay

Proration is typically anchored on basic salary actually earned during the year.
Unpaid floating months generally do not count because no basic salary is earned.

B. “Christmas bonus” vs. “13th month pay”

Employers sometimes label a benefit “Christmas bonus” when it is actually meant to satisfy the statutory 13th month obligation, or they pay both but confuse the two. Legally, the 13th month pay is usually treated as a distinct statutory requirement; other bonuses are separate unless clearly structured as an equivalent, compliant arrangement.

C. Can an employer create a rule excluding floating employees?

An employer may implement reasonable eligibility rules before a bonus ripens into a protected practice, and may define “active service” requirements. Problems arise when:

The bonus has become a consistent, unconditional benefit over time, and
The employer later changes the rules to exclude floating employees in a way that functions as a unilateral reduction of an established benefit, or is applied inconsistently.

D. Can floating status be used to avoid paying benefits?

If floating status is used beyond the legally tolerated duration, or as a device to defeat rights, it may expose the employer to claims (including constructive dismissal and money claims), with corresponding effects on final pay and benefits.

VIII. Remedies and prescriptive periods (high-level)

When bonus disputes arise, claims are typically treated as money claims (unless bundled with illegal/constructive dismissal issues). General principles include:

Money claims usually prescribe after three (3) years from the time the claim accrued.
Claims involving dismissal/constructive dismissal are commonly treated under a longer prescriptive period for injury to rights.

The accrual date depends on the benefit:

For 13th month pay, accrual typically aligns with the legally required payment period.
For company bonuses, accrual aligns with the declared payout date or the time the bonus becomes due under the plan.

IX. Summary of bottom-line rules

13th month pay: generally still due, but prorated based on basic salary actually earned; unpaid floating months typically reduce the amount.
Other bonuses: entitlement depends on whether the bonus is discretionary or demandable (contract/CBA/policy/practice).
If the bonus is demandable: eligibility turns on the plan’s conditions (active service vs. employed status) and the employer’s consistency.
If the bonus has become a company practice: excluding floating employees may be challenged as non-diminution if the exclusion is a unilateral reduction of an established benefit.
If floating exceeds lawful limits or is abused: broader liabilities may arise, affecting separation outcomes and monetary awards.

Legal information note

This article is general information on Philippine labor-law principles and common workplace applications. Specific outcomes depend on the exact bonus policy/CBA/contract terms, payroll history, and the factual context of the floating status.