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Is it compulsory for employers to pay the Annual Wage Supplement (AWS) or commonly known as the 13th month payment?

Is it compulsory for employers to pay the Annual Wage Supplement (AWS) or commonly known as the 13th month payment?

Payment of bonus is not compulsory. However, it is a contractual obligation for the employer to pay bonus if it is provided for in the employment contract or collective agreement.

If it is not stipulated, Annual Wage Supplement payment is subject to negotiation and mutual agreement between the employer and the employees or their trade unions.