Guide on Wage Order and Minimum Wage (Philippines)

Wages or salaries are the amounts workers or employees receive as compensation from employers for the work they regularly perform.  While business owners and workers are allowed to agree on specific amounts as salaries, these must not be lower than the minimum wage set by the Regional Tripartite Wages and Productivity Boards (RTWPBs).

What are wage orders?

Minimum wages vary depending on the industry and location (region) of the business.  Regional Wage Orders specify:

–        the daily minimum wage rates and

–        exemptions from compliance

Wage increases occur when Wage Orders are issued.  These affect all private sector workers and employees receiving the daily minimum wage rates or those receiving up to a certain daily wage ceiling.

But not everyone may be entitled to the minimum wage.

There are exceptions such as househelpers and family drivers as well as companies that are granted limited exemptions.

What happens when a company or business pays its employees or workers salaries or wages below the minimum amount set by law?

Wage orders should not be ignored as stiff fines and the penalty of imprisonment  may be imposed upon an employer who refuses or fails to pay the prescribed increases or adjustments in the wage rates.

But what about Wage/salary distortion?

Companies often follow salary pay scales or pay grades according to differentiate work roles, positions and levels. Occasionally, mandated wage increases elevate salaries of lower positions so that the salary of a Grade Level One position may become equal to the salary of the next higher rank.  In this case, what should the employer do?  Assuming the company has decided to address wage distortion, how should he go about it?

This Guide includes various formulae in resolving wage distortion and demonstrates each with an example. It also presents a solution for companies that are unionized.

Exemptions from wage orders

Some employers may be exempt from compliance with minimum wage orders. But in certain instances, a prior application for exemption must first be obtained through application and approval.  If the application is disapproved, at what point should the company pay its employees the minimum wage? From the date of the application or from the date of disapproval?

These and other related issues are discussed in the Guide on Wage Orders and Minimum Wage. The eBook version now includes:

–        the latest Wage Order No. NCR-16 granting P22.00 COLA

–        updated list of regional wage rates as of July 1, 2011

–        Labor Advisory dated July 07, 2011 on the treatment of COLA in regular holiday pay

Ebook version (2011 revised edition) on Wage Orders and Minimum Wage guide is now available at ManilaBookSales.Com at Php 597.00.

Guide to Wage Order and Minimum Wage Law in the Philippines

12 thoughts on “Guide on Wage Order and Minimum Wage (Philippines)

  1. Meg

    Hello ,

    It’s Meg again. I would just like to ask if there is a provision in the law that states that regular employees need to have their salary computed on a monthly basis rather than on a daily wage basis? My boss wants to change our contracts when it is renewed on January 1, 2011. He wants to put a daily wage instead of making it a monthly one (11 days per cut-off, total of 22 days a month), So now our salaries will be computed on the exact number of days we went to work instead of the standard 11 days. Magulo ba? Sorry po…

    1. Christine Florido Post author

      Meg:
      The salary of a regular employee may be computed on a daily rate on the basis of the “no work, no pay” principle. But it is my opinion that you can only do this for future employees, not the current regular employees whose monthly take home salaries may become less as a result of the change in computation, which could violate the Labor Code provision against the non diminution or reduction of benefits already enjoyed by the employees. I hope this helps.

  2. VIRGINIA *******

    good day paano po un nagtatrabaho sa private company my karapatan po cla magreklamo in case n hindi sapat un dagdag nilang sweldo ngaun 2011 in 15 years of service 4percent lng ang dagdag
    siguro nman hindi kasalanan ng employee kung kumita o hindi ang isang kompanya

    1. Atty Elvin Villanueva Post author

      Virginia: (Reply by guest blogger, lawyer and HR specialist Atty. Elvin Villanueva)

      As a general rule, employers are bound to pay their employees only the basic wage or salary mandated by the Wage Board. Likewise, the employers should pay the benefits and other compensation of employees found under Articles 82-97 of the Labor Code, social legislations like 13th monthy pay, leave benefits under Violence against women and children, paternity, maternity, parental leave and the new 2-month Gynecological leave, etc.

      There is no law that requires employers to give annual increase to the workers.

      It is only when the company has existing policy, practice and agreement or CBA providing salary and annual increases above and beyond the minimum wage and statutory benefits that employees are entitled to such rates. If there is no such policy, no additional compensation may be granted.

      If the company through practice and policy grants annual increase, then it is bound to comply. So please check your employer’s policy on this.

  3. cel

    mam hello po.i just wanna share my story bout my condition on my current employer.i am a receptionist/cashier.nagstart po me feb.16 2009 sa private company na pinapasukan ko now.nagkaroon po ng interview and and napagkasunduan namin ng president ng company is minimum wager ako which is 382php pero wala pong pirmahan ng contract na naganap.march 1,2009 nag soft opening ang company.starting march until september 2009 ay nagcocontribute kami sa sss,pagibig,philhealth at tax.then mid of october nag maternity leave po me and my president at work signed in my sss maternity.nakuha ko naman po ung maternity benefit ko and i thanked my boss for that.akala ko po 2 months lng leave ko pero inabot ng almost 3 months and nakabalik me sa work january 19,2010 na and they claimed that i’m a rehire employee na.and ung mga sss,pagibig,philhealth at tax contributions ay itinigil na nila.yan na po ung simula na nakukuha ko na ng buo ang aking buong sahod 15 & 30 of the month.hiniling ko sa admin/accounting na willing ako na ibawas ang mga dapat i deduct sa sahod ko at ang sagot lng po nila di na daw nila kaya na mag contribute sapagkat nag iisa akong employee ng company kaya itinigil nila.ini report ko n ito s sss branch namin and nagbigay cla ng penalty letter sa company namin regarding contribution of the company to sss.dahil ako ang cashier ako n din po ang nagpapasahod sa sarili ko pag araw na ng sahod.sa ngayon po dito pa din ako nagta trabaho at ang sahod ko ay 382php p din.month of february 2011 tinawagan ko tru celpon ang admin bout my 13th month for the year 2010 at ang sinagot niya na ibawas ko na lng daw po kung may pera/kita ang company.ung 13th month ko po kinuha ko ng paunti-unti At nakumpleto lng nitong May 15,2011.simula po ng nag operate ang company namin ay lagi n itong lugi.mam gusto ko po sana malaman ano po ba ang dapat ko gawin at ano ung mga rights and priveledges ko bilang employee ng isang pribadong company.kasama po ba ako sa mga employees na may salary increased this year?magkano po ba dapat ang sahod ko sa kasalukuyan?kahit po ba nalulugi ang company ay dapat pa din clang magbigay ng 13th month?consider po ba na regular employee na ako kahit wala kaming pirmahan ng contrata ng boss ko bout work and salary o hindi?gusto ko po sana malaman lahat lahat about sa kalagayan ko ngaun sa pinapasukan ko.sana po ay mabigyan nyo ng pansin ang letter ko na ito.wala po kasi akong mapagtanungan na iba.more power po sa inyo!maraming salamat and God bless! cel

    1. Atty Post author

      Cel: Will send a reply to your questions through email. Please check.

  4. Carl

    Taonong lang po, 5 years na po ako sa company tapos po pag may seminar kami na kami ang nag orginize may profit sharing pa kami na 10% sa net income, tapos po simula 2010 until now wala po sila binibigay na profit sharing, considering na additional work load yun para sa amin, and umaasa po kai na mabibigyan kami, kasi po dati naman nakakatangap kami, isa pa po, last year po binigyan din po kami ng allowance, tapos po ngayong 2011 bigla nalang po nila inalis yung allowance namin, pede po ba yun?

    1. Atty. Post author

      Carl: A monetary benefit such as an allowance (in addition to your basic pay) that is temporary and has not evolved into a company policy may be withdrawn by the employer. Regarding your profit-sharing arrangement, it would help if you have a written agreement on this matter which you can use to file a claim for unpaid amounts due from your employer. Your previous payslips may also show signs of previous profit-sharing schemes with the company.

  5. Mei

    Hi just a question. I have a problem with my employer. When she hired me, she said that I will get a minimum wage but what happened is we only get 6,000 monthly without don’t have SSS, Phil health or anything. One day, there’s a SSS officer came to our office and looking for some documents. Our boss made us sign some papers that we started working to her company JANUARY 2011 when the truth is I started working to their company MARCH 2011.

    is there any legal action for that? thanks

    1. Atty. Post author

      Mei: Check first if your employer is exempted from the payment of minimum wage before taking further action. But as in most things, it wouldn’t hurt to first ask your employer about the salary previously agreed and the discrepancy in your payslip.

  6. cathyrine

    Ma’am. tanong ko lang mag 15 yrs na po ako sa TOSHIBA INFORMATION EQUIPMENT PHILS. dito pa LAGUNA TECHNOPARK BINAN. ang daily na sahod ko po ngayon .ay 379 pesos pa lang po. tama po ba yon? sa isang 15 yrs na ngayong Nov. 2011 nagtatrabaho sa isang campany lalo na d2 sa malaking campany? sana po sa email ko na lang po e send. thanks.

    1. Atty. Post author

      Cathyrine: Reply sent via email. Please check.

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