Guidelines for the Effective Implementation of R.A. 7641, The Retirement Pay Law

October 24, 1996GUIDELINES FOR THE EFFECTIVE IMPLEMENTATION OF R.A. 7641, THE RETIREMENT PAY LAWA. CoverageRepublic Act No. 7641 or the Retirement Pay Law shall apply to all employees in the private sector, regardless of their position, designation or status and irrespective of the method by which their wages are paid. They shall include part-time employees, employees of service and other job contractors and domestic helpers or persons in the Personal service of another.The law does not cover employees of retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers and employees of the National Government and its political subdivisions, including Government-owned and/or controlled corporations, if they are covered by the Civil Service Law and its regulations.B. Computation of Retirement PayA covered employee who retires pursuant to RA 7641 shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.The law is explicit that "one-half month salary shall...