Understanding Government Gratuity Pay: What COS and JO Workers Need to Know

In mid-December, the Philippine government made a significant decision regarding compensation for its non-permanent workforce. President Ferdinand Marcos Jr. signed Administrative Order (AO) No. 39, authorizing a one-time financial benefit for contract of service and job order employees across various public institutions. But what is gratuity pay exactly, and who qualifies?

The Policy and Its Scope

The P7,000 gratuity pay represents recognition for contract workers’ contributions to government operations, addressing a longstanding compensation gap. Unlike regular civil servants who receive mid-year bonuses, year-end bonuses, performance incentives, and economic relief allowances, COS and JO workers have historically been excluded from such benefits. This Administrative Order seeks to bridge that inequity.

The coverage extends across all national government agencies, state universities and colleges, government-owned or controlled corporations, and local water districts—essentially touching every corner of the public sector workforce.

Eligibility Criteria and Payment Structure

Not every contract worker automatically receives the full P7,000 amount. Eligibility hinges on service duration as of December 15. Those who completed at least four months of satisfactory service with active contracts on that date qualify for the maximum benefit.

Workers with shorter tenures receive prorated amounts:

• Three to four months of service: up to P6,000
• Two to three months of service: up to P5,000
• Less than two months of service: up to P4,000

The government set December 15 as the baseline date, with fund releases beginning no earlier than that date. Additionally, President Marcos approved a separate one-time gratuity provision for these workers in 2024, indicating potential recurring recognition of their service.

Policy Context and Impact

What is gratuity pay in practical terms? It’s a temporary measure acknowledging non-permanent workers’ pivotal role in delivering government services during challenging socioeconomic times. The order explicitly recognized how COS and JO employees contribute to implementing government programs, activities, and projects without receiving equivalent benefits to permanent staff.

This move signals a shift in how the administration values contract labor within public institutions, though questions remain about whether such payments will become institutionalized or remain one-time gestures.