Filing a Complaint for Under-paid 13ᵗʰ-Month Pay in the Philippines

(A practical legal guide)

Quick take-away: Every rank-and-file employee—public or private, permanent or casual, full-time or part-time—who has worked at least one month during the calendar year is entitled to a 13ᵗʰ-month benefit equal to one-twelfth (1/12) of total basic salary actually earned from 1 January to 31 December. Payment must be made on or before 24 December. Under-payment can be recovered within three (3) years by filing a complaint, first through DOLE’s Single-Entry Approach (SEnA) and, if unresolved, through the National Labor Relations Commission (NLRC).

1. Legal Foundations

Instrument	Key points
Presidential Decree 851 (1975)	Creates the 13ᵗʰ-month pay; authorises the Secretary of Labor to issue implementing rules.
DOLE Revised Guidelines (as amended by Labor Advisory No. 28-20 & succeeding advisories)	Clarify the formula, deadline (24 Dec), coverage, and record-keeping requirements.
Labor Code of the Philippines (Art. 294-301, 306)	Makes non-payment or under-payment an unlawful reduction of wages; sets a three-year prescriptive period for monetary claims.
Jurisprudence	R.A.Lee Int’l vs. DOLE (G.R. No. 209897) – DOLE may issue compliance orders; Philtranco vs. NLRC (G.R. No. 173862) – under-paid 13ᵗʰ-month is a money claim subject to legal interest; Auto Bus Transport vs. Bautista (G.R. No. 156367) – rank-and-file status defined broadly.

Note: The 14ᵗʰ-month benefit often appears in CBAs or company policies, but only the 13ᵗʰ-month is compulsory by law.

2. Who is Covered—and Who Is Not

Covered	Not covered / exceptions
All rank-and-file employees in the private sector regardless of nature of employment or payment scheme.	Government employees (they receive a year-end bonus under separate rules); househelpers and family drivers (now covered by Batas Kasambahay which provides a similar bonus); employers already paying its equivalent through existing benefits equal to or exceeding 1/12 of annual earnings may offset.

Contractual or project-based employees are still “rank-and-file” during the term of their contract; they are entitled on a pro-rated basis.

3. How the Correct Amount is Computed

Determine “basic salary actually earned.” Exclude overtime, night-shift diff, unused leave conversions, and allowances unless these are integrated into “basic pay” by express stipulation or long-standing practice.
Sum the basic salary earned from 1 January to 31 December.

Divide by 12.

13th-Month Pay = (Total Basic Salary Earned) ÷ 12

Pro-rated computation for employees who separated mid-year:

13th-Month Pay = (Basic Salary Earned up to Separation) ÷ 12

Deadline: Not later than 24 December. A company may pay half in June and the balance in December, but the total may not be less than the statutory amount.

4. Recognising Under-payment

Common red flags:

13ᵗʰ-month was computed on “basic rate” minus regular allowances that should have formed part of “basic pay.”
Benefit paid after 24 December without valid DOLE exemption.
Incorrect proration upon end-of-contract or resignation.
Deduction of SSS, PhilHealth, Pag-IBIG or withholding tax (the 13ᵗʰ-month is exempt from income tax up to ₱90,000 as of 2024).
No written payslip or a payslip showing “13MP” less than 1/12 of annual basic salary.

5. Step-by-Step Complaint Process

A. Internal Demand (Optional but Strategic)

Gather evidence: payslips, payroll summaries, employment contract, company handbook, BIR Form 2316.
Send a written request (e-mail or letter) to HR/payroll politely stating the discrepancy and citing PD 851.
Keep proof of receipt; give the employer ten (10) calendar days to rectify.

Why bother? It shows good faith and may resolve the matter quickly. If ignored, it strengthens your later claim for damages or attorney’s fees.

B. DOLE Single-Entry Approach (SEnA)

Mandatory before any formal case:

Step	What happens	Timeline
File Request for Assistance (RFA) at the nearest DOLE Regional/Field Office (or online via SEnA e-Form).	Intake officer logs the dispute and schedules conciliation.	Same day filing
Conciliation-Mediation with a SEADO.	Parties meet; facilitator seeks voluntary settlement.	Within 5 days of filing
Possible Settlement Agreement.	Employer pays deficiency; SEADO drafts a compromise binding under Art. 234 of the Labor Code.	Within 30 days total (extendible once)
Referral to NLRC if unresolved.	SEADO issues a Referral Letter plus minutes of conciliation.	End of 30-day period

Cost: Free. No filing fees; attendance is compulsory once summoned.

C. National Labor Relations Commission (NLRC)

Requirement	Details
Verified Complaint (NLRC Form 1)	Must allege under-payment, amount claimed, and pray for interest, damages, attorney’s fees.
Attach	Referral Letter, payroll records, proof of rank-and-file status.
Filing fee	1% of total claim over ₱1,000, but waived if claim is not over ₱5,000 or the complainant is an indigent employee (submit Barangay Certification of Indigency).
Position Paper	Filed after the mandatory conciliation-conference by the Labor Arbiter.
Decision	Labor Arbiter rules; award is immediately executory with 12% legal interest (or prevailing rate) from date of demand.

Appeal goes to NLRC Commission, then to Court of Appeals via Rule 65, then Supreme Court.

6. Prescriptive Period

Three (3) years from date of cause of action (i.e., 25 December of the year the under-payment occurred, or the date of separation if earlier).
Filing SEnA tolls (stops) prescription; time stops running during conciliation.

7. Penalties & Additional Relief

Legal interest (currently 6 % p.a. under BSP Circular 799) on the unpaid amount, counted from date of demand until full satisfaction.
Attorney’s fees up to 10 % of award when employee is compelled to litigate.
Criminal liability: Under P.D. 851, intentional refusal may constitute an offense under Art. 288 of the Labor Code (fine ₱40,000-₱400,000 and/or imprisonment 3 months-3 years), but criminal actions are rare.
Moral and exemplary damages when bad faith is proven (e.g., deliberate falsification of payroll).

8. Practical Tips for Employees

Tip	Why it matters
Document everything (screenshots, e-mails, Viber logs).	Digital evidence is admissible under the Rules on Electronic Evidence.
Act quickly.	Waiting weakens leverage and risks prescription.
File as a group when possible.	Collective claims carry more weight and reduce cost.
Beware of quitclaims.	Signing a quitclaim may waive your 13ᵗʰ-month claim unless the amount paid approximates the legal entitlement and the waiver is voluntary and for a valid consideration.
Compute your claim accurately before filing.	Inflated or guess-work figures can be dismissed for lack of substantiation.

9. Employer’s Defenses & How to Counter

Common defense	Rebuttal
“Employee is managerial/supervisory.”	Provide job description to show lack of policy-making authority; burden of proof is on employer.
“Equivalent benefit already paid.”	Compare payroll items; equivalent must be at least 1/12 of annual basic salary and expressly labelled as 13ᵗʰ-month or its equivalent.
“Payment delayed due to business losses.”	PD 851 has no financial hardship exception once business is operational.
“Employee already resigned.”	Entitlement is pro-rated; resignation does not forfeit benefit.
“Government pandemic guidelines allowed deferment.”	Temporary deferrals in 2020-21 did not waive liability; employers had to pay on later dates set by DOLE Advisory 28-20.

10. Frequently Asked Questions

Q: Is sales commission included in computing the 13ᵗʰ-month? A: Only guaranteed, fixed commissions forming part of basic salary are included; purely productivity-based or contingent commissions are excluded.

Q: Can my employer pay the 13ᵗʰ-month on 31 December if payday falls then? A: No. The deadline in PD 851-IRR is “on or before 24 December.” Payment after that date constitutes delay and triggers legal interest.

Q: I’m a probationary employee who started 1 October; am I entitled? A: Yes, on a pro-rated basis: (October-December basic salary) ÷ 12.

Q: We’re covered by a collective bargaining agreement granting 14ᵗʰ-month. Can the company count that as the compulsory 13ᵗʰ-month? A: Only if the total 14ᵗʰ-month benefit equals or exceeds 1/12 of annual basic salary. If not, the deficiency must be paid.

11. Checklist Before Filing

☐ Compute the shortfall precisely.
☐ Secure at least three (3) recent payslips.
☐ Obtain a copy of your annual BIR Form 2316.
☐ Draft an internal demand letter (optional but recommended).
☐ Prepare a government-issued ID for DOLE filing.
☐ File RFA at DOLE (online or in-person).
☐ Mark your calendar: 30-day SEnA deadline.
☐ If no settlement, file NLRC complaint within the three-year prescriptive period.

12. Final Thoughts

The 13ᵗʰ-month pay is not a privilege but a statutory wage benefit designed to help Filipino workers meet year-end expenses. The enforcement mechanism—SEnA followed by NLRC litigation—may appear daunting, but the process is worker-friendly, low-cost, and heavily mediated toward settlement. Swift action, accurate computation, and complete documentation are your best allies.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For personalised guidance, consult a lawyer or visit the nearest DOLE office.