WAGES AND OTHER

BENEFITS

Yena Mae T. Samson

Milagrace L. Sumampong
Payment of Wages
• Is anchored on the basic principles in the
Labor Code (PD 442 as amended)

Hereunder discussed as follows:

 Fair Day’s Wage for a Fair Day’s Labor
“No Work No Pay Principle”
- if there is no work performed by the
employee, there can be no wage or pay.

 Equal Pay for Equal Work

- employees holding the same position
and rank are presumed to be performing
equal work.
 Salary and Wage Distinguished

WAGE - applies to the compensation for

manual labor skilled or unskilled paid
at the stated time and measured by
the day, weeks, months or season.
SALARY - denotes a higher degree of
employment, or a superior grade of
services and implies a position or
office.
 Importance of the Distinction
between Salary and Wage

- The latter being payment for the services of

workers with usually hand-to-mouth
existence, the same is not subject for
garnishment.
 Garnishment

- A warning to a person in whose hands the

effects of another are attached, not to pay the
money or deliver the property of the
defendant in his hand to him, but to appear
and answer the plaintiff’s suit.
- Withholding one’s salary for payment to
judgement creditor the person whose salary is
withheld being adjudged as a judgement
debtor.
 Commission

- Is remuneration / compensation received by

salesman, agent, executor, broker or trustee to
be proportionate percentage corresponding to
the benefit or profit obtained by the principal
as a result of the transaction.

- Is deemed reasonable in relation to profit

realized.
 Facilities

- Include all articles or services granted by the

employer for the benefit of the employee and
his family.

- It does not include tools, or any article

necessary to the conduct of the employee’s
business.
 Supplement defined

- Foods or snacks or other convenience

provided by the employer are deemed
supplements if they are granted for the
convenience of the employer.
 APPLICATION OF THE RULE ON WAGES
The Rule on wages applies to all employees
except in the ff. instances:
1. Farm tenancy or leasehold
2. Household or Domestic Helpers
3. Homeworkers
4. Workers employed in any establishment duly
registered with the NACIDA
5. Workers registered cooperative upon
approval of Secretary of Labor
6. Workers of Brgy. Micro Business Enterprise
 Retail/ Service Establishment to be
exempted from minimum wage

- It must be shown that the establishment is

regularly employing not more than 10 workers
and has applied for exemptions with and as
determined by the appropriate legal board
 Ability to Pay Immaterial

- Employee cannot exempt himself from

liability to pay minimum wage because of the
poor financial condition of the company.

- Payment of minimum wage is not dependent

upon the ability to pay of the employer.
 Estoppels not Applied

- This principle does not apply to an employee

who accepted payment of salary/wage
without any objection far below than what he
ought to receive.

- Employee is not barred to sue from the

difference.
 No Diminution of Benefits
1. Express terms of an employment agreement;
2. Company practice which refers to the implied
terms of an employment agreement which
the employer has freely and voluntarily
extended to his employees and thus cannot
be withdrawn except by mutual consent of
the contracting parties;
3. The constitutional protection on Labor
4. The liberal construction of Labor Laws and
contract in favor of Labor
 Application of No Diminution Policy

1. The grant of the benefit is founded on the

policy that has ripened into a practice over a
long period.
2. The practice is consistent and deliberate.
3. The practice is not due to error in the
construction or application of a doubt.
 Minimum Wage

- Refers to the basic, cash wages without

deducting there from whatever benefits,
supplements or allowances which the
employees enjoy free of charge aside from the
basic pay.
 Manner of Wage Payment

- as general rule, wages shall be paid with legal

tender and the use of tokens, promissory
note, voucher, coupons or any other forms
alleged to represent legal tender is absolutely
prohibited even when expressly requested by
the employee.
 Legal Tender

- That which the debtor may compel the

creditor to accept in payment of a debt.

- Cash money of Philippines currency.

 Payment by Checks

1. There is a bank or other facility for

encashment within a radius of 1km from
work place;
2. The employer or any of his agents or
representatives does not receive any
pecuniary benefit directly or indirectly from
the arrangement;
3. The employees are given reasonable time
during banking hours to withdraw their wages
from the bank which time shall be considered
as compensable hours;

4. The payment of check is with the written

consent of the employees concerned if there
is no collective bargaining agreement
authorizing the payment of wages by check.
 Time of Payment

Shall be as follows:
1. Wages shall be paid not less than once every
2 weeks or twice a month with an interval not
exceeding 16 days, unless payment cannot be
paid with such regularity due to force majeure
or circumstances beyond the employer’s
control. Employer shall pay the wage
immediately after such force have ceased.
2. In case of payment of wages by result
involving works which cannot be furnished in
2 weeks, payment shall be made at interval
not exceeding 16 days in proportion of the
amount of work completed and final
settlement shall be made immediately upon
completion of work.
 Place of Payment
GENERAL RULE payment shall be at or near the
place of undertaking, payment in place other
than work place shall be permissible only
under the ff. circumstances:

1. When payment cannot be effected at or near

the place of work by reason of deterioration
of peace impending emergencies cause by
fire, flood, epidemic or other calamity
rendering payment thereat impossible.
2. When the employer provides free
transportation to the employees back and
forth;

3. Under any analogous circumstances, provided

that the time spent by the employees in
collecting their wages shall be considered as
compensable hours worked.
 No Payment of Wage at Bar, Night or Day
Club

- No employer shall pay his employees in any bar

night or day club, drinking establishment,
massage clinics, dance hall, or other similar
places where games are played with stake
money or things representing money except in
the case or persons employed in said places.
 Direct Payment of Wages
Except in the ff. cases:
1. Where the employer is authorized in writing
by the employee to pay his wages to a
member of his family;
2. Where payment to another person of any
part of the employee’s wages is authorized
by existing laws, including payment for
insurance premiums of the employee.
3. In case of death of the employee as herein
provided.
 Wages of Deceased Employees
- Shall be paid to his heirs without the necessity
to intestate proceedings.
- Legal heirs shall execute an affidavit attesting
to their relationship to the deceased.
- If heirs is minor, affidavit shall be executed in
his behalf by a guardian or next of kin.
- Upon presentation of affidavit to the
employer, he shall make payment to the heir
as representative of the Sec. of Labor.
 Payment to conflicting Heirs of the Deceased
Salaries and Benefits

- The WCC may serve as referee/arbitrator for

immediate availment of the same.

- If conflict remain unresolved the regular court

has final authority to decide the issue.
 Wage Deduction
Can be made when:
1. Deduction is authorized by law including
deductions for insurance premium advances
by the employer in behalf of the employee as
well as union dues;
2. Deduction are written authorization of the
employees for payment to a third person and
the employer agrees to do so.
 Deduction for Loss or Damages
Employer may make wage deductions when:

1. That the employee concerned is clearly

shown to be responsible for the loss or
damages;

2. That the employee are given reasonable

opportunity to show cause why deduction
should not be made.
3. That the amount of such deduction is fair and
reasonable and shall not exceed the actual
loss or damage;

4. That the deductions from the wage of the

employee does not exceed 20% of the
employee’s wage in a week.
 Payment for Shares of Stocks cannot be
Deducted from Wages

- employee’s obligation arising from non-

payment of stock subscription to the company
cannot be validly deducted from his salary and
other benefits.
 Toll Fees cannot be deducted from
Employee’s Salary

- Deducted from the commission of the bus

driver.
- Relevant provision of RA 6727 otherwise
known as Wage Rationalization Act which was
approved on June 1989 and suspended the
relevant provision of the Labor Code are
herein below discussed.
 WAGE RATIONALIZATION LAW
(RA 6727)
 To promote productivity improvement and
gain-sharing measures to ensure a decent
standard of service for the workers and their
families;
 To guarantee the rights of labor & to its just
shares in the fruit of productions;
 Enhance employment generations in the
countryside through industry dispersal.
Regional Minimum Wage

- Minimum wage rates for agricultural and non-

agricultural employees and workers and every
region of the country shall be those
prescribed by the Regional Tripartite Wage
and Productivity Board.
Creation of National Wage & Productivity
Board

- Hereunder referred to as commission which

shall be attached to the Department of Labor
and Employment for policy and program
coordination.
Power of the Wage Commission
Functions & Powers:
1. To act as national consultative and advisory
body to the president and congress on
matters relating wages, incomes and
productivity;
2. To formulate policies and guidelines on
wages, incomes and productivity,
improvement at the enterprise industry on
the national levels;
3. To prescribe rules and guidelines for the
determination of appropriate minimum wage
and productivity measures at the regional,
provincial or industry levels;

4. To review regional wage levels set by the

Regional Tripartite Wage and Productivity
Boards to determine if these were in
accordance with prescribed guidelines and
national development plans;
5. To undertake studies, researches and surveys
necessary for the attainment of its functions
and objectives and to collect and compile data
and periodically disseminates information on
wage and productivity and other related
information, including but not limited to
employment, cost of living, labor cost,
investments and returns;
6. To review plans and program of the Regional
Tripartite Wage and Productivity Board to
determine whether these are consistent with
national development plans;
7. To exercise technical and administrative
supervision over Regional Tripartite Wage and
Productivity Boards;
8. To call from time to time, a national tripartite
conference of representatives of government,
workers and employees for the consideration
of measures to promote wage rationalization
and productivity;
9. To exercise such powers and functions as may
be necessary to implement this Act.
 Composition of the National Wage and
Productivity Commission

1. Secretary of Labor – as Ex-Office Chairman

2. Director General of National Economic
Development Authority (NEDA) – as Ex-
Office Vice Chairman
3. 2 members each from the employers and
employees sectors
4. The Executive Director
Executive Director of the Commission
- The National Wage and Productivity
Commission shall be assisted by a Secretariat
headed by the Executive Director who is also a
member of the Commission.

Executive Director shall have rank, salary and

benefits of a Department Assistant Secretary.
EE ER representatives have same rank,
emoluments and benefits.
Composition of Regional Boards

1. Regional Director of the Department of Labor

and Employment – as Chairman
2. Regional Directors of NEDA and DTI – as Vice-
Chairman
3. 2 members each from ER and EE sectors
Functions of Regional Board

- Investigate and study all pertinent facts based

on the standard and criteria prescribed to
determine whether a wage order should be
issued
- Conduct public hearings consultations, giving
notices to EE and ER groups
 Appeal from Decision of the Regulation
Board
- Can appeal within 10 calendar days from the
publication of such order.
- Mandatory for the Commission to decide such
appeal within 60 days from filing.
- The person appealing such Order shall file
with the Commission an undertaking with a
surety satisfactory to the Commission.
Standards Criteria for Minimum Wage Fixing
Consider the ff.:
1. The demand for living wages
2. Wages adjustment vis-as-vis the consumer
price index
3. The cost of living and changes or increases
therein
4. The needs of workers and their families
5. The need to induce industries in the
countryside
6. Improvements in standard of living
7. The prevailing wage level
8. Fair return of the capital invested and
capacities to pay of employers
9. Effect on employment generations
10.The Equitable distribution of income and
wealth along the imperatives of
socioeconomic development
The Wages Prescribed in every Region
- vary within industries provinces or localities if
in the judgement of the Regional Board

Reportorial Requirement
- Any person, company, corporation,
partnership shall file and register annually
with the Regional Board, NSO, PSA a listing of
their Labor Component, names of workers
hired with corresponding salaries and wages.
Wage Distortion, How Corrected

- Employer and the union shall negotiate to

correct the same.
- Can be resolved through grievance
mechanism under Collective Bargaining
Agreement or through Voluntary Arbitration.
Where there is no CBA or Labor Union
- In case there is no CBA OR RECOGNIZE Labor
union employers and workers shall endeavor
correct such distortions
- Any dispute shall be settled through the
National Conciliation and Mediation Board
- If still not resolved within 10 calendar days
refer to National Labor Relations Commission
- NLRC shall conduct mandatorily hearings and
can decide to 20 calendar days for arbitration.
 Pendency of the Dispute does not Delay
Execution of the Order
 Wage Distortion Defined
- a situation where an increase in prescribed
wage rates results in the elimination or severe
construction of intentional quantitative
difference in wage or salary rates.
 Minimum Wage of Place Workers
 Learner/ apprentice included also
 Prohibition against Injunction
 Non-Diminution of Benefits
 SUGGESTED FORMULA IN DETERMINING
EQUIVALENT MONTHLY STATUTORY
MINIMUM WAGE

1. For those who are required to work every

day, including Sunday or rest day , special
and regular holidays:
Equivalent Daily Rate = Applicable Daily Rate(ADR)
(EMR) ADR x 392 days
12
Where 392 days =
a. 302 days - Ordinary Working Days
b. 22 days - 12 Regular Holidays x 200%
c. 66.30 days - 51 Rest days x 130%
d. 2.6 days - 2 Special Holidays x 130%
392.90 days - Total Equivalent number of
days
2. For those who do not work but considered paid
on rest days, special days and regular holidays:
EMR = ADR X 367 days
12
Where 367 days =
a. 302 days - Ordinary Working days
b. 51 days - Rest days
c. 12 days - Regular Holidays
d. 2 days - Special Holidays
367 days - Total Equivalent number of days
3. For those who do not work and are not
considered paid on Saturdays or rest days:
EMR = ADR X 318 days
12
Where 316 days =
a. 304 days - Ordinary Working days
b. 12 days - Regular Holidays
c. 2 days - Special Holidays
318 days - Total Equivalent number of
days
4. For those who do not work and are
considered paid on Sundays or rest days:
EMR = ADR x 264 days
12
Where 262 days =
a. 250 days - Ordinary Working days
b. 12 days - Regular Holidays
c. 2 days - Special Holidays
264 days - Total Equivalent number of
days
 PAYMENT OF SALARY / WAGE THROUGH
AUTOMATED TAILER MACHINE (ATM)
1. There must be written consent of the employees.
2. ATM facility must be available within one (1) kilometer
radius from work.
3. No additional expense and diminution of benefits on the
part of the employees;
4. Upon request of the concerned employee, the employer
shall issue records of the payment of wages, benefits and
deductions; and
5. The employer shall assume responsibility for whatever
breach of protection in this regards as provided for by
law.
 PRODUCTIVITY INCENTIVE ACT OF 1990
(RA 6971)

“ It is a declared policy of the state to encourage higher

level of productivity, maintain industrial peace and
harmony and promote the principle of shared
responsibility in the relations between the workers
and employers, recognizing the right of labor to its
just share in the fruits of production and the right of
the business enterprise to reasonable return of
investment and to expansion and growth and
accordingly, to provide corresponding incentives to
both labor and capital for undertaking voluntary
programs to ensure greater sharing by the workers in
the fruits of their labor.” (sec. 2 RA 6971)
 Labor Management Committee
 Business Enterprise with Labor Organization
 Business Enterprise w/o Labor Organization
 Productivity Incentives Program
 Productivity Agreement supplements the CBA
 Benefits Tax Incentives
 Tax Deduction for Manpower Training Expense
 Suspension of the Productivity Incentive
Program
 Disputes and Grievance
GRANTING 13TH MONTH BONUS (PD 851)

“PD 851 is hereby modified to the extent that all

employees are hereby required to pay all their
rank and file employees a 13th month pay not
later than December 24 of every year”

(sec. 1 MO No.28 series of 1986)

 Amount of 13th Month Pay
(not less than 1/12)
 Basic Salary (Context)
 Employees paid by Result
 Time of Payment
 Private School Teachers
 Resigned/Separated Employees
 Employees with multiple Employers
 Commission is not included in the
computation of 13th Month Pay
 13th Month Pay
 Salesman Commission as part of Salary
 Productivity Bonus not included in Basic
Salary
 PATERNITY LEAVE ACT OF 1996
(RA 8187)

“An act granting Paternity Leave of 7 Days with

full pay to all married male employees in the
private and public sectors for the first 4
deliveries of the legitimate spouse with whom
he is cohabiting and for other purposes.”
1. He should be employed at the time of
delivery of the child.
2. He has noticed his employer of the
pregnancy of his wife and her expected date
of delivery as herein prescribed.
3. His wife has given birth, suffer miscarriage or
an abortion.
 SOLO PARENT ACT (RA 8972)

“ An act providing foe benefits and privileges to

solo parents and their children, appropriating
funds there for and for other purposes.”
 Parental Leave
 Flexible Work Schedule
 Prohibition against Discrimination
 Educational Benefit
 Housing Benefit
 Medical Assistance
 Change of Status of Solo Parent
 TAX REFORM BENEFITS FOR THE WORKERS
 Progressive System of Taxation
 Tax free for OFW’S
 Exclusion from Gross Income
ff are not considered as income under the tax
code:
1. Life Insurance
2. Amount Received by insured as return of
premium
3. Compensation for injuries or sickness
4. Retirement Benefits