How is the term “one-half month salary” legally defined when computing the minimum retirement pay of an eligible employee?
The law provides a specific formula for computing the minimum retirement pay if no broader inclusions are agreed upon by the parties. The required “one-half month salary” is not merely fifteen days of the employee’s basic wage. It explicitly includes fifteen days of salary, plus one-twelfth of the employee’s 13th-month pay. Furthermore, it also includes the cash equivalent of not more than five days of service incentive leaves. This legal definition is set out in Article 302 Labor Code of the Philippines. “Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.” 02-Jun-26About Nicolas and De Vega Law Offices
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