Mandatory 14th month for workers will be difficult for MSME - ECOP
By J.Lo
"That's why I think it will be difficult for businesses to comply with 14th month pay requirement," Employers Confederation of the Philippines (ECOP) vice president George Barcelon, also president of Philippine Chamber of Commerce and Industry (PCCI), said mandating grant of 14th month pay to employees will be burden for small businesses that are still recovering from pandemic. Barcelon said businesses have not fully recovered yet from COVID-19 pandemic.
Kabayan party-list Representative Ron Salo proposed House Bill No. 520, which seeks to grant 14th month pay to all employees in public and private sector regardless of employee's status of employment.
Under Salo's bill, 13th month pay already required by law will be paid to the employees on or before May 31 of each year in anticipation of school enrollment of employees' dependents.
The 14th month pay, meanwhile, will be given to employees on or before November 30 of each year in time for traditional Christmas celebration.
Barcelon said while several companies are already giving 14th month pay to its workers depending on the financial performance, making it compulsory will make it burden especially for MSMEs.
"There are leeways for business depending on the robustness of their performance, they can afford 14th month pay…but as requirement, it will be burden for MSMEs," he said.
Under Salo's proposal, employees employed for less than one year, the 14th month pay will be prorated according to the number of months served.
The bill also says 14th month pay should not be any less than an employee's monthly basic salary.
The 14th month pay is also proposed to be excluded from computation of employee's gross income, provided that it will not exceed allowed exemptions pursuant to the National Internal Revenue Code or its Implementing Rules and Regulations.
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