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Philippines - Minimum Wages - 2011


LAST UPDATE

11 October 2011

SOURCES


Name of Act

Labor Code of the Philippines - Presidential Decree No. 442, as amended by the Wage Rationalization Act 1989 and the Basat Kasambahay Act 2004 (and others). Published by the Department of Labor and Employment at http://www.dole.gov.ph/labor_codes.php and accessed 29 September 2011.
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Name of Act

Wage Rationalization Act, Republic Act No. 6727, dated 9 June 1989 as amended by Republic Act No. 8188, dated 7 June 1996. Published on the Official Website of the National Wage and Productivity Commission at http://www.nwpc.dole.gov.ph/legal.html and accessed 29 September 2011.

Name of Act

Rules and Amended Rules on Exemption from compliance with the Prescribed Wage Increases/Cost of Living Allowances Granted by the Regional Tripartite Wages and Productivity Boards, NWPC Guidelines No. 02 Series of 2007 and NWPC Guidelines No. 1 Series 1996. Published by the National Wage and Productivity Commission at http://www.nwpc.dole.gov.ph/legal.html and accessed 29 September 2011.
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Name of Act

Rules Implementing Republic Act No. 6727, published by the National Wage and Productivity Commission at http://www.nwpc.dole.gov.ph/legal.html and accessed 29 September 2011.
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Name of Act

Batas Kasambahay Act 2004, Thirteenth Congress of the Republic of the Philippines, SB No. 1772. Published at http://www.senate.gov.ph/lisdata/29932556!.pdf and accessed 5 October 2011.
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Name of Act

Amended Rules of Procedure on Minimum Wage Fixing, NWPC Guidelines No. 1 Series of 2007. Published by the National Wages and Productivity Commission at www.nwpc.dole.gov.ph/legal.html and accessed 29 September 2011.
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Name of Act

An Act Increasing the Penalty and Imposing Double Indemnity for Violation of the Prescribed Increases or Adjustments in the Wage Rates (Republic Act No. 8188 of 1996) and Guidelines on the imposition of Double Indemnity for non-compliance with the Prescribed Increases or Adjustments in the Wage Rates (Department Order No. 10 of 1998). Published by the National Wages and Productivity Commission at http://www.nwpc.dole.gov.ph/pages/legal_corner/ra_no_8188.html and accessed 29 September 2011.

Name of Act

Name of Act

Omnibus Rules to Implement the Labor Code, published by the Chan Robles Virtual Law Library at www.chanrobles.com/implementingrulesofthelaborcode.htm and accessed 11 October 2011.
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Other source used

Guidelines on the Issuance of Wage Advisories for Barangay Micro Business Enterprises, NWPC Guidelines No. 1, Series of 2003. Published by the National Wages and Productivity Commission at http://www.nwpc.dole.gov.ph/legal.html and accessed 29 September 2011.
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LEGAL DEFINITIONS


Employee/worker

For the purposes of the minimum wage provisions of the Labor Code, ’employee’ includes any individual employed by an employer.
Labor Code of the Philippines §97(c)
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Employer

For the purposes of the minimum wage provisions of the Labor Code, ’employer’ includes any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the government and all its branches, subdivisions and instrumentalities, all government-owned or controlled corporations and institutions, as well as non-profit private institutions, or organizations.
Labor Code of the Philippines §97(b)

Wage

For the purposes of the minimum wage provisions of the Labor Code, ’wage’ paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee.

’Fair and reasonable value’ shall not include any profit to the employer, or to any person affiliated with the employer.
Labor Code of the Philippines §97(f)

MINIMUM WAGE FIXING


Procedure


Minimum wages set directly by tripartite negotiations

Minimum wage rates are to be set at a regional level by Regional Tripartite Wages and Productivity Boards.

Each Regional Board shall be composed of the Regional Director of the Department of Labor and Employment as chairman, the Regional Directors of the National Economic and Development Authority and the Department of Trade and Industry as vice-chairmen and 2 members each from workers’ and employers’ sectors. The employee and employer representatives shall be appointed by the President of the Philippines, upon the recommendation of the Secretary of Labor and Employment, to be made on the basis of the list of nominees submitted by the workers’ and employers’ sectors, respectively.

Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent facts and, based on prescribed standards and criteria, proceed to determine whether a Wage Order should be issued. Any such Wage Order shall take effect after 15 days from its complete publication in at least 1 newspaper of general circulation in the region.

In the performance of its wage-determining functions, the Regional Board shall conduct public hearings/consultations, giving notices to employees’ and employers’ groups, provincial, city and municipal officials and other interested parties.

Any party aggrieved by the Wage Order issued by the Regional Board may appeal such order to the Commission within 10 calendar days from the publication of such order. It shall be mandatory for the Commission to decide such appeal within 60 calendar days from the filing thereof. The filing of an appeal does not stay the order, unless the person appealing such order also files an undertaking with a surety or sureties satisfactory to the Commission for the payment to the employees affected by the order of the corresponding increase, in the event such order is affirmed.

A National Wages and Productivity Commission is charged with prescribing rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional, provincial, or industry levels and reviewing regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in accordance with prescribed guidelines and national development plans.

The National Wages and Productivity Commission is not empowered to overturn Wage Orders made by the Regional Boards directly. However, the Commission may make a wage recommendation in relation to a specified industry or branch thereof where it considers that a substantial number of employees in that industry or branch of industry are receiving wages which, although in compliance with the minimum wage provided by law, are less than sufficient to maintain them in health, efficiency and general well-being (taking into account the peculiar circumstances of the industry and its geographical location). Such a wage recommendation may be either rejected or approved by the Secretary of Labor and Employment and, if approved, a Wage Order shall be issued by the Secretary subject to the approval of the President of the Philippines.
Labor Code of the Philippines §§99, 120, 121, 122, 123
Amended Rules of Procedure on Minimum Wage Fixing 2007
Omnibus Rules to Implement the Labor Code Rule IX of Book Three

Criteria

The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program. A number of criteria are enumerated by the Labor Code to this end.
Labor Code of the Philippines §124

Needs of workers and their families

In determining the minimum wage rates, the Regional Board shall consider, among other relevant factors, the needs of workers and their families.
Labor Code of the Philippines §124(d)

Cost of living

In determining the minimum wage rates, the Regional Board shall consider, among other relevant factors, the cost of living and any changes or increases therein.
Labor Code of the Philippines §124(c)

Level of wages and incomes in the country

In determining the minimum wage rates, the Regional Boards shall consider, among other relevant factors, the prevailing wage levels.
Labor Code of the Philippines §124(g)

Economic development

In determining the minimum wage rates, the Regional Boards shall consider, among other relevant factors, the equitable distribution of income and wealth along the imperatives of economic and social development.
Labor Code of the Philippines §124(j)

Level of employment

In determining the minimum wage rates, the Regional Board shall consider, among other relevant factors, the effect on employment generation.
Labor Code of the Philippines §124(i)

Capacity of employers to pay

In determining the minimum wage rates, the Regional Board shall consider, among other relevant factors, the capacity of employers to pay (and fair return of the capital invested).
Labor Code of the Philippines §124(h)

Inflation rate

In determining the minimum wage rates, the Regional Board shall consider, among other relevant factors, the wage adjustment vis-à-vis the consumer price index.
Labor Code of the Philippines §124(b)

Other provisions

In determining the minimum wage rates, the Regional Boards shall consider, among other relevant factors, the need to induce industries to invest in the countryside and improvements in standards of living.
Labor Code of the Philippines §124(e), (f)

Coverage


Scope

The minimum wage rates set under Chapter V of Title II of Book Three of the Labor Code, as amended by the Wage Rationalization Act (the generally-applicable minimum wage rates), apply to all workers and employees in the private sector regardless of their position, designation or status, and irrespective of the method by which their wages are paid, except
a) Household or domestic helpers, including family drivers and workers in the personal service of another;
b) Workers and employees in retail/service establishments regularly employing not more than 10 workers, when exempted from compliance with the Act for a period fixed by the Commission/Boards;
c) Workers and employees in exempted Barangay Micro Business Enterprises.
Labor Code of the Philippines §98
See also coverage provisions of the Regional Wage Orders
Rules Implementing Republic Act No. 6727 §1
Rules and Amended Rules on Exemptions from Prescribed Wage Increases §2
Guidelines on the Issuance of Wage Advisories for Barangay Micro Business Enterprises
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Excluded categories


» Workers

The minimum wage rates set by the Regional Boards do not apply to workers in registered Barangay Micro Business Enterprises. However, non-mandatory ’wage advisories’ are to be made in respect of the wage rates to be applied by exempted Barangay Micro Business Enterprises.
Labor Code of the Philippines §98
See also coverage provisions of the Regional Wage Orders
Guidelines on the Issuance of Wage Advisories for Barangay Micro Business Enterprises
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» Sectors

The minimum wage rates set by the Regional Boards do not apply to government sector employees.
See coverage provisions of Wage Orders

» Occupations

The general minimum wage provisions do not apply to household or domestic helpers, family drivers, persons employed in the personal service of another. However, such workers are covered by alternative minimum wage protections set out in Chapter III of Title III of Book Three of the Labor Code.
Labor Code of the Philippines §98
See also coverage provisions of the Regional Wage Orders

» Other Provisions

Retail/service establishments regularly employing not more than 10 workers may be exempted from compliance with the Act for a period fixed by the Commission/Boards.
Rules Implementing Republic Act No. 6727 §1

Specific minimum wage rates


» Specific minimum wage by sector

The Regional Boards may set different minimum wage levels for different industries within the relevant region if the Regional Board considers that conditions make such differentiation proper and necessary to effectuate the intention of the Labor Code.

A review of current Wage Orders indicates that different rates are usually set for different sectors, largely divided into non-agricultural sectors, agricultural sectors and retail and service sectors.
Labor Code of the Philippines §124

» Specific minimum wage by region

Each of the 16 regions in the Philippines has its own Regional Tripartite Wages and Productivity Board which sets minimum wage rates for their respective region. The Regional Boards may set different minimum wage levels for different provinces or localities within the relevant region if the Regional Board considers that conditions make such differentiation proper and necessary to effectuate the intention of the Labor Code.

A review of the current Wage Orders indicates that many of the Regional Boards have set different minimum wage rates for workers in different provinces or localities within their region.
Labor Code of the Philippines §§121, 122, 124
For examples of provincial and local variations, see Wage Order No. RTWPB-II-14, Wage Order No. RBIII-16, Wage Order No. IVA-14, Wage Order No. IVB-05, Wage Order No. RBV-14.

» Minimum wage levels for specific categories of workers


» Trainees

Apprentices and learners must be paid no less than 75% of the applicable minimum wage.
Labor Code of the Philippines §§61, 75(c)
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» Domestic Workers

Kasambahay [Househelpers] shall be paid the following minimum wage rates:
(1) Eight hundred pesos (P800.00) a month for Kasambahay working in the National Capital Region (NCR) (Manila, Quezon, Pasay and Caloocan cities and the municipalities of Makati, San Juan, Mandaluyong, Muntinlupa, Navotas, Malabon, Parafiaque, Las Piiias, Pasig and Marikina in Rizal Province);
(2) Six hundred fifty pesos (P650.00) a month for those working in other chartered cities and first class municipalities; and
(3) Five hundred fifty pesos (P550.00) a month for those working in other municipalities.

The Regional Tripartite Wages and Productivity Boards may determine and adjust from time to time, the appropriate minimum wage rates of kasambahay and employers are to review the rates paid every 3 years with a view to improving them.
Labor Code of the Philippines §143
See also Visayan Forum Foundation website at: See also Visayan Forum Foundation website at:
See also Visayan Forum Foundation website at:
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» Disabled

Disabled workers shall be paid at least 75% of the applicable minimum wage.
Labor Code of the Philippines §80(2)

» Piece-rate workers

All workers paid by result, including those who are paid on piecework, takay, pakyaw or task basis, shall receive not less than the prescribed wage rates per eight (8) hours of work a day, or a proportion thereof for working less than eight (8) hours.
Labor Code of the Philippines §124

Level


Minimum wage level(s) in national currency

There are currently 17 Regional Wage Orders in force, prescribing different minimum wages for agricultural workers (often divided into plantation and non-plantation workers) and non-agricultural workers. Many provide further variations in the minimum wage by province or locality or industry.

The region with the highest minimum wage rates is the National Capital Region. The minimum wage rates (in pesos) set for this region are:
(i) for non-agricultural workers - P426.00 per day;
(ii) for agricultural workers - P389.00 per day.

The region with the lowest minimum wage rates is Region V. This region has multiple minimum wage rates across the agricultural and non-agricultural sectors. The ranges of daily minimum wage rates (in pesos) in Region V are:
(i) for non-agricultural workers - P204.00-247.00per day;
(ii) for plantation workers - P215.00-225.00 per day; and
(iii) for non-plantation agricultural workers - P195.00-205.00 per day.
See Summary of Current Regional Daily Minimum Wages Rates as of August 2011 (NWPC)
See also Wage Orders
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Last minimum wage update

The date on which each of the regional minimum wage rates were last updated range from 20 August 2010 (in the Autonomous Region in Muslim Mindanao) to 15 July 2011 (in Region VI).
See Summary of Current Regional Daily Minimum Wages Rates as of August 2011 (NWPC)
See also Wage Orders

In-kind allowances

No employer shall pay the wages of an employee by means of promissory notes, vouchers, coupons, tokens, tickets, chits, or any object other than legal tender, even when expressly requested by the employee. However, any board, lodging or other facilities customarily furnished by the employer to the employee may be considered part of the employee’s wage (as defined), provided that a fair and reasonable value has been assigned to these services.
Labor Code of the Philippines §§97(f), 102, 144
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Rate of payment


» Monthly

No employer shall make payment with less frequency than once a month.
Labor Code of the Philippines §103

» Other

Wages shall be paid at least once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. If on account of force majeure or circumstances beyond the employer’s control, payment of wages on or within the time prescribed cannot be made, the employer shall pay the wages immediately after such force majeure or circumstances have ceased. No employer shall make payment with less frequency than once a month.

The payment of wages of employees engaged to perform a task which cannot be completed in two (2) weeks shall, in the absence of a collective bargaining agreement or arbitration award, be paid at the following:
1. at intervals not exceeding sixteen (16) days, in proportion to the amount of work completed; and
2. final settlement upon completion of the work.
Labor Code of the Philippines §103

Scheduled frequency of adjustment

Wage orders should be determined whenever conditions in the region so warrant. Once a Wage Order has been issued by the Board, it may not be revised for a period of 12 months, unless circumstances (such as extraordinary increases in the price of petroleum and basic services) demand that rates be revised.
Labor Code of the Philippines §123
Rules Implementing Republic Act No. 6727 Rule IV, Section 3

Enforcement mechanisms


Labour inspection

Representatives of the Department of Labor and Employment (DOLE), including labor regulation officers, shall have access to employer’s records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations of Labor Code or Wage Order. Where such a violation is established, the Regional Director may issue a compliance order to give effect to the provisions of the Labor Code.

DOLE representatives shall conduct inspections as often as possible of the payroll and other financial records kept by the company or business to determine whether workers are paid the prescribed wage rates and other benefits granted by the law or applicable Wage Order.

In unionized companies, the DOLE inspectors shall always be accompanied by an authorised representative of the recognized bargaining unit of any interested union. In non-unionized companies, the DOLE inspectors shall always be accompanied by a worker representing the workers of the company.

The worker’s representative shall have the right to submit his or her own findings to DOLE and to testify on the same if he cannot concur with the findings of the labor inspector.
Labor Code of the Philippines §128(a)
Wage Rationalization Act 1989 §9
Act and Guidelines Increasing Penalty and Imposing Double Indemnity See Guidelines at §4
Omnibus Rules to Implement the Labor Code See Rules X and XI of Book Three

Fines in national currency for non-respect of legislation

Any person, corporation, trust, firm, parmersnip, association or entity which refuses or fails to pay any of the prescribed increases or adjustments in Wage Orders be punished by a fine not less than P25,000 nor more than P100,000 (pesos).
Wage Rationalization Act 1989 §12
Act and Guidelines Increasing Penalty and Imposing Double Indemnity §1

Other penalties

In addition or as an alternative to the fine which may be imposed, a person may be imprisoned for not less than 2 years and not more than 4 years for a failure or refusal to pay any prescribed increases or adjustments in the wage rates.

Where the violation is committed by a corporation, trust, firm, partnership, association or other entity, the prison sentence shall be imposed on the entity’s responsible officers, including (but not limited to) the president, vice president, chief executive officers, general manager, managing director or partner.

Further, the employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits owing to the employees. Such a payment shall not absolve the employer of criminal liability under the minimum wages laws.
Wage Rationalization Act 1989 §12
Act and Guidelines Increasing Penalty and Imposing Double Indemnity §1

Results generated on: 29th November 2014 at 02:13:21.
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