Minimum Wage Guide PDF

ELECT 3 - HUMAN RESOURCE MANAGEMENT WITH LABOR RELATIONS GROUP 1 - GARCIA, MODINA, VITERBO TABLE OF CONTENTS COVERAGE MINIMUM WAGE RATES RULES IN DETERMINING COMPENSABLE WORKING HOURS MONTHLY-PAID AND DAILY-PAID EMPLOYEES COMPUTATION OF ESTIMATE...

ELECT 3 - HUMAN RESOURCE MANAGEMENT WITH LABOR RELATIONS GROUP 1 - GARCIA, MODINA, VITERBO TABLE OF CONTENTS COVERAGE MINIMUM WAGE RATES RULES IN DETERMINING COMPENSABLE WORKING HOURS MONTHLY-PAID AND DAILY-PAID EMPLOYEES COMPUTATION OF ESTIMATED EQUIVALENT MONTLY RATE (EEMR) OF MONTHLY-PAID AND DAILY PAID EMPLOYEES TABLE OF CONTENTS SUBSIDIZED MEALS AND PACKS WAGE OF KASAMBAHAY WAGE OF KASAMBAHAY WHO WORKS AS SALESCLERK EFFECT OF REDUCTION OF WORKDAYS ON WAGES PENALTY AND DOUBLE INDEMNITY FOR THE PRESCRIBED INCREASES OR ADJUSTMENTS IN THE WAGE RATES TABLE OF CONTENTS BARANGAY MICRO BUSINESS ENTERPRISES (BMBEs) WAGE OF WORKERS PAID BY RESULTS WAGES OF APPRENTICES, LEARNERS, AND PERSONS WITH DISABILITY ANNUAL ESTABLISHMENT REPORT ON WAGES (AERW) COVERAGE FROM INCOME TAX  REPUBLIC ACT NO. 6727 Republic Act No. 6727 or the “Wage Rationalization Act” mandates the fixing of the minimum wages applicable to different industrial sectors, namely, non-agriculture, agriculture plantation, and non- plantation, cottage/handicraft, and retail/service, depending on the number of workers or capitalization or annual gross sales in some sectors.  REPUBLIC ACT NO. 6727 The Rules Implementing RA 6727 define the following as basis for wage classification: -Agriculture -Retail Establishment -Service Establishment  REPUBLIC ACT NO. 6727 refers to farming in all its branches and, among others, includes the cultivation and tillage of the soil, production, cultivation, growing and harvesting of any agricultural or horticultural commodities, dairying, raising of livestock or poultry, the culture of fish and other aquatic products in farms or ponds, and any activities performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, but does not include the manufacturing and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or other farm products. AGRICULTURE  REPUBLIC ACT NO. 6727 is one principally engaged in the sale of goods to end-users for personal or household use. A retail establishment that regularly engages in wholesale activities loses its retail character. RETAIL ESTABLISHMENT  REPUBLIC ACT NO. 6727 is one principally engaged in the sale of service to individuals for their own or household use and is generally recognized as such. SERVICE ESTABLISHMENT  REPUBLIC ACT NO. 6727 The said law rationalized wage determination by establishing the mechanism and proper standards through the creation of Regional Tripartite Wages and Productivity Boards (RTWPBs) authorized to determine the daily minimum wage rates in the following different regions based on established criteria:  REPUBLIC ACT NO. 6727 National Capital Region (NCR) or Metro Manila Cordillera Administrative Region (CAR) Region I - Northern Luzon or Ilocos Region II - Cagayan Valley Region III - Central Luzon CALABARZON (A) - Provinces of Cavite, Laguna, Batangas, Rizal, and Quezon MIMAROPA Region (B) - Provinces of Mindoro Oriental, Mindoro Occidental, Marinduque, Romblon, and Palawan Region V - Bicol Region VI - Western Visayas Region VII - Central Visayas Region VIII - Eastern Visayas Region IX - Western Mindanao or Zamboanga Peninsula Region X - Northern Mindanao Region XI - Southern Mindanao or Davao Region XII - Central Mindanao or SOCCSKSARGEN (South Cotabato, North Cotabato, Sultan Kudarat, Sarangani, and General Santos) Caraga Region - Provinces of Agusan del Norte, Agusan del Sur, Surigao del Norte, and Surigao del Sur Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) COVERAGE A. COVERAGE The wage increases prescribed under Wage Orders apply to all private sector workers and employees receiving the daily minimum wage rates or those receiving up to a certain daily wage ceiling, where applicable, regardless of their position, designation, or status of employment, and irrespective of the method by which their wages are paid, except workers of duly registered Barangay Micro Business Enterprises (BMBEs) with Certificate of Authority pursuant to Republic Act No. 10644. A. COVERAGE Upon application with and as determined by an RTWPB, based on documentation and other requirements in accordance with applicable rules and regulations issued by the National Wages and Productivity Commission (NWPC), an establishment may be exempted from compliance with a Wage Order for a period not to exceed one (1) year. MINIMUM WAGE RATES B. MINIMUM WAGE RATE DAILY MINIMUM WAGE (MW) National Capital Region (NCR) (As of July 2023) CURRENT MINIMUM NEW MINIMUM WAGE SECTOR/INDUSTRY NEW WAGE INCREASE WAGE RATES RATES Non-Agriculture 570.00 PHP 40.00 PHP 610.00 PHP Agriculture (Plantation and Non- 533.00 PHP 40.00 PHP 573.00 PHP Plantation) Service/Retail Establishments 533.00 PHP 40.00 PHP 573.00 PHP (Employing 15 workers or less) Manufacturing Establishments (Regularly employing less than 10 533.00 PHP 40.00 PHP 573.00 PHP workers) B. MINIMUM WAGE RATE Summary of Current Regional Daily Minimum Wage Rates (MWR) (As of July 2023) REGION WO NO./ DATE OF EFFECTIVITY MWR (PHP) NCR WO 24 / 16 July 2023 573.00 - 610.00 CAR WO 21 / 14 June 2022 400.00 I WO 21 / 06 June 2022 372.00 - 400.00 II WO 21 / 08 June 2022 400.00 - 420.00 III WO 23 / 20 June 2022 344.00 - 460.00 CALABARZON WO 19 / 30 June 2022 350.00 - 470.00 MIMAROPA WO 10 / 10 June 2022 329.00 - 355.00 V WO 20 / 18 June 2022 365.00 VI WO 26 / 05 June 2022 410.00 - 450.00 B. MINIMUM WAGE RATE Summary of Current Regional Daily Minimum Wage Rates (MWR) (As of July 2023) VII WO 23 / 14 June 2022 382.00 - 435.00 VIII WO 22 / 27 June 2022 345.00 - 375.00 IX WO 21 / 25 June 2022 338.00 - 351.00 X WO 21 / 18 June 2022 378.00 - 405.00 XI WO 21 / 19 June 2022 428.00 - 443.00 XII WO 22 / 09 June 2022 347.00 - 368.00 Caraga WO 17 / 06 June 2022 350.00 BARMM WO 02 / 21 July 2022 306.00 - 341.00 VII WO 23 / 14 June 2022 382.00 - 435.00 VIII WO 22 / 27 June 2022 345.00 - 375.00  RULES IN DETERMINING COMPENSABLE WORKING HOURS C. RULES IN DETERMINING COMPENSABLE WORKING HOURS The basis of the minimum wage rates prescribed by law shall be the normal working hours of eight (8) hours a day. C. RULES IN DETERMINING COMPENSABLE WORKING HOURS -Hours worked -Principles in determining hours worked -Treatment on waiting time -Attendance at lectures, meetings, training programs, and other similar activities -Meals and Rest Periods C. RULES IN DETERMINING COMPENSABLE WORKING HOURS 1. Hours worked The following shall be considered as compensable hours worked: a) All time during which an employee is required to be on duty or to be at the employer's premises or to be at a prescribed work place; and b) All time during which an employee is suffered or permitted to work. C. RULES IN DETERMINING COMPENSABLE WORKING HOURS 2. Principles in determining hours worked The following general principles shall govern in determining whether the time spent by an employee is considered hours worked: a) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. C. RULES IN DETERMINING COMPENSABLE WORKING HOURS b) An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his work place, to go elsewhere, whether within or outside the premises of his workplace. C. RULES IN DETERMINING COMPENSABLE WORKING HOURS c) If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor. C. RULES IN DETERMINING COMPENSABLE WORKING HOURS d) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either if the imminence of the resumption of work requires the employee's presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee's own interest. C. RULES IN DETERMINING COMPENSABLE WORKING HOURS 3. Treatment on waiting time a) Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait. C. RULES IN DETERMINING COMPENSABLE WORKING HOURS b) An employee who is required to remain on call in the employer's premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call. C. RULES IN DETERMINING COMPENSABLE WORKING HOURS 4. Attendance at lectures, meetings, training programs, and other similar activities Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all of the following conditions are met: a) Attendance is outside of the employee's regular working hours; b) Attendance is in fact voluntary; and c) The employee does not perform any productive work during such attendance. C. RULES IN DETERMINING COMPENSABLE WORKING HOURS 5. Meals and Rest Periods Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee: C. RULES IN DETERMINING COMPENSABLE WORKING HOURS a) Where the work is non-manual work in nature or does not involve strenuous physical exertion; b) Where the establishment regularly operates not less than sixteen (16) hours a day; C. RULES IN DETERMINING COMPENSABLE WORKING HOURS c) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and d) Where the work is necessary to prevent serious loss of perishable goods. C. RULES IN DETERMINING COMPENSABLE WORKING HOURS *Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time.  MONTHLY-PAID EMPLOYEES AND DAILY-PAID EMPLOYEES D. MONTHLY-PAID EMPLOYEES AND DAILY-PAID EMPLOYEES “Monthly-paid employees” are those who are paid every day of the month, including unworked rest days, special days, and regular holidays. Factor 365 days in a year is used in determining the equivalent monthly salary of monthly-paid employees. D. MONTHLY-PAID EMPLOYEES AND DAILY-PAID EMPLOYEES “Daily-paid employees” are those who are paid on the days they actually worked and on unworked regular holidays.  COMPUTATION OF THE ESTIMATED EQUIVALENT MONTHLY RATE (EEMR) OF MONTHLY-PAID AND DAILY-PAID EMPLOYEES E. COMPUTATION OF THE ESTIMATED EQUIVALENT MONTHLY RATE (EEMR) OF MONTHLY-PAID AND DAILY-PAID EMPLOYEES The following factors are based on the declared regular holidays and special non-working days in Proc. No. 42-22, as amended by Proc. No. 90-22: E. COMPUTATION OF THE ESTIMATED EQUIVALENT MONTHLY RATE (EEMR) OF MONTHLY-PAID AND DAILY-PAID EMPLOYEES 1. For monthly-paid employees: Factor 365 days in a year is used in determining the equivalent annual and monthly salary of monthly-paid employees. To compute their Estimated Equivalent Monthly Rate (EEMR), the procedure is as follows: Applicable Daily Rate (ADR) x 365 = EEMR 12 months Where 365 days/year = 293.0 Ordinary working days 52.0 Rest days 12.0 Regular holidays + 8.0 Special non-working holidays 365.0 Total equivalent no. of days/yr E. COMPUTATION OF THE ESTIMATED EQUIVALENT MONTHLY RATE (EEMR) OF MONTHLY-PAID AND DAILY-PAID EMPLOYEES 2. For daily-paid employees: The following factors and formula may be used in computing the EEMR of different groups of daily-paid employees for purposes of entitlement to minimum wages and allied benefits under existing laws: a. For those who are required to work everyday, including Sundays or rest days, special days and regular holidays Applicable Daily Rate (ADR) x 395.0 = EEMR 12 months Where 395 days/year = 293.0 Ordinary working days 67.6 Rest days (52 x 1.3) 24.0 Regular holidays (12 x 2) + 10.4 Special non-working holidays (8 x 1.3) 395.0 Total equivalent no. of days/yr E. COMPUTATION OF THE ESTIMATED EQUIVALENT MONTHLY RATE (EEMR) OF MONTHLY-PAID AND DAILY-PAID EMPLOYEES 2. For daily-paid employees: b. For those who do not work and are not considered paid on Sundays or rest days Applicable Daily Rate (ADR) x 313.0 = EEMR 12 months Where 313 days/year = 293.0 Ordinary working days 12.0 Regular holidays + 8.0 Special non-working holidays (10.4 if worked) 313.0 Total equivalent no. of days/yr E. COMPUTATION OF THE ESTIMATED EQUIVALENT MONTHLY RATE (EEMR) OF MONTHLY-PAID AND DAILY-PAID EMPLOYEES 2. For daily-paid employees: c. For those who do not work and are not considered paid on Saturdays and Sundays or rest days Applicable Daily Rate (ADR) x 261.0 = EEMR 12 months Where 313 days/year = 241.0 Ordinary working days 12.0 Regular holidays + 8.0 Special non-working holidays (10.4 if worked) 261.0 Total equivalent no. of days/yr SUBSIDIZED MEALS AND SNACKS F. SUBSIDIZED MEALS AND SNACKS The employer may provide subsidized meals and snacks to his employees provided that the subsidy shall not be less than 30% of the fair and reasonable value of such facilities. In such case, the employer may deduct from the wages of the employees not more than 70% of the value of the meals and snacks enjoyed by the employees, pursuant to the Facility Evaluation Order issued by the RTWPB concerned. F. SUBSIDIZED MEALS AND SNACKS (Sec. 4, Rule VII-A, Book III of the Rules Implementing the Labor Code) For the computation of the fair and reasonable value of the meals given, the employer may seek assistance from concerned Regional Tripartite Wages and Productivity Board (RTWPBs) for the conduct of facility evaluation.  WAGE OF KASAMBAHAY G. WAGE OF KASAMBAHAY After one year from the effectivity of the Batas Kasambahay and periodically thereafter, the Regional Tripartite Wages and Productivity Boards (RTWPBs) were mandated to review and, if proper, determine and adjust the minimum wage rates of Kasambahay. The RTWPBs shall conduct consultations/hearings with stakeholders prior to the issuance of a wage order. G. WAGE OF KASAMBAHAY (As of July 2023)  WAGE OF KASAMBAHAY WHO WORKS AS SALESCLERK H. WAGE OF KASAMBAHAY WHO WORKS AS SALESCLERK A Kasambahay who works as salesclerk should receive wage in accordance with the prescribed minimum wage which is applicable in the retail and service establishments, under existing Wage Orders.  EFFECT ON REDUCTION OF WORKDAYS ON WAGES I. EFFECT ON REDUCTION OF WORKDAYS ON WAGES “No work, no pay.”  PENALTY AND DOUBLE INDEMNITY FOR VIOLATION OF THE PRESCRIBED INCREASES OR ADJUSTMENTS IN THE WAGE RATES (RA 8188) J. PENALTY AND DOUBLE INDEMNITY FOR VIOLATION OF THE PRESCRIBED INCREASES OR ADJUSTMENTS IN THE WAGE RATES (RA 8188) Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates made in accordance with RA 6727, shall be punished by a fine of not less than Twenty-five Thousand Pesos (P25,000.00) nor more than One Hundred Thousand Pesos (P100,000.00) or imprisonment of not less than two (2) years nor more than four (4) years, or both such fine and imprisonment at the discretion of the court: Provided, That any person convicted hereof shall not be entitled to the benefits provided for under the Probation Law. J. PENALTY AND DOUBLE INDEMNITY FOR VIOLATION OF THE PRESCRIBED INCREASES OR ADJUSTMENTS IN THE WAGE RATES (RA 8188) The employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits owing to the employees: Provided, That payment of indemnity shall not absolve the employer from the criminal liability imposable hereof. J. PENALTY AND DOUBLE INDEMNITY FOR VIOLATION OF THE PRESCRIBED INCREASES OR ADJUSTMENTS IN THE WAGE RATES (RA 8188) If the violation is committed by a corporation, trust, firm, partnership, association or any other entity, the penalty of imprisonment shall be imposed upon the entity’s responsible officers, including, but not limited to, the president, vice-president, chief executive officer, general manager, managing director or partner. BARANGAY MICRO BUSINESS ENTERPRISES (BMBEs) K. BARANGAY MICRO BUSINESS ENTREPRISES (BMBEs) BMBEs or business enterprises engaged in the production, processing or manufacturing of products or commodities including agro-processing, trading and services whose total assets, excluding the land on which the particular business entity’s office, plant and equipment are situated are not more than Three Million Pesos (P3,000,000) are not covered from the coverage of the Minimum Wage Law: Provided, that all employees shall still be entitled to the same benefits given to regular employees such as social security and health care benefits. K. BARANGAY MICRO BUSINESS ENTREPRISES (BMBEs) The DTI, through the Negosyo Center in the city or municipality level, shall have the sole power to issue the Certificate of Authority for BMBEs to avail of the benefits provided by R.A. No. 9178, otherwise known as the “Barangay Micro Business Enterprises (BMBEs) Act of 2002”. The BMBE workers and owners shall agree on the acceptable wage rates based on the wage advisories issued by the RTWPBs.  WAGE OF WORKERS PAID BY RESULTS L. WAGE OF WORKERS PAID BY RESULTS All workers paid by results, including homeworkers and those who are paid on piecework, takay, pakyaw or task basis, shall receive not less than the prescribed minimum wage rates under the Regional Wage Orders for the normal working hours which shall not exceed eight (8) hours a day, or a proportion thereof for work less than the normal working hours. L. WAGE OF WORKERS PAID BY RESULTS To ensure the payment of fair and reasonable wage rates, the wage rates of workers who are paid by results as may be determined through time and motion studies or in consultation with representatives of employers’ and workers’ organizations. L. WAGE OF WORKERS PAID BY RESULTS A Piece-Rate Order or Production Standard Order shall be issued by the DOLE Regional Director, in his capacity as DOLE Chairperson, based on the recommendation of the Secretariat of the RTWPB as a result of the time and motion study conducted in the workplace of the applicant. It should be adjusted every time a new Wage Order is issued by the RTWPB to ensure that piece rates correspond to the applicable minimum wage.  WAGE OF APPRENTICES, LEARNERS, AND PERSONS WITH DISABILITY M. WAGE OF APPRENTICES, LEARNERS, AND PERSONS WITH DISABILITY Wage of apprentices and learners shall in no case be less than seventy-five (75%) percent of the applicable minimum wage rates. Apprentices and learners are those who are covered by apprenticeship and learnership agreements duly approved by the Technical Education and Skills Development Authority (TESDA). M. WAGE OF APPRENTICES, LEARNERS, AND PERSONS WITH DISABILITY A qualified employee with disability shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits or allowances as a qualified able-bodied person.  ANNUAL ESTABLISHMENT REPORT on WAGES (AERW) N. ANNUAL ESTABLISHMENT REPORT on WAGES Pursuant to Article 124 of the Labor Code, as amended by Republic Act No. 6727 or the Wage Rationalization Act, all private establishments are required to submit an annual report on “a verified itemized listing of their labor component, specifying the names of their workers and employees below the managerial level, including learners, apprentices and disabled/handicapped workers who were hired under the terms prescribed in the employment contracts, and their corresponding salaries and wages.” N. ANNUAL ESTABLISHMENT REPORT on WAGES For this purpose, all private establishments are required to register and login to the online report of the AERW at https://annualwagereport.nwpc.dole.gov.ph/. For 2022, the report shall be submitted not later than 31 May 2023. While for succeeding years, submission shall not be later than January 31 of the following year (e.g. for calendar year 2024, submission shall not be later than 31 January 2025). N. ANNUAL ESTABLISHMENT REPORT on WAGES Establishments which do not have access to online facilities may go to the nearest RTWPB so they can be assisted with the encoding of entries.  COVERAGE FROM INCOME TAX O. COVERAGE FROM INCOME TAX Effective January 1, 2018, the following income payments are exempted from the requirement of withholding tax on compensation: O. COVERAGE FROM INCOME TAX 1. Compensation income of Minimum Wage Earners (MWEs) who work in the private sector and being paid the Statutory Minimum Wage (SMW), as fixed by Regional Tripartite Wage and Productivity Board (RTWPB)/National Wages and Productivity Commission (NWPC), applicable to the place where he/she is assigned. O. COVERAGE FROM INCOME TAX Aside from the SMW, the holiday pay, overtime pay, night shift differential pay, and hazard pay, earned by the aforementioned MWE shall likewise be covered by the above exemption. For this purpose, hazard pay shall mean the amount paid by the employer to MWEs who were actually assigned to danger or strife-torn areas, disease-infested places, or in distressed or isolated stations and camps, which expose them to great danger or contagion or peril to life. Any hazard paid to MWEs which does not satisfy the above criteria is deemed subject to income tax and consequently, withholding tax on the said hazard pay. O. COVERAGE FROM INCOME TAX Additional compensation such as commissions, honoraria, fringe benefits, benefits in excess of the allowable statutory amount of ₱90,000.00, taxable allowances, and other taxable income given to an MWE by the same employer other than those which are expressly exempt from income tax shall be subject to withholding tax using the withholding tax table. O. COVERAGE FROM INCOME TAX 2. Compensation during the year not exceeding Two hundred fifty thousand pesos (₱250,000.00). ELECT 3 - HUMAN RESOURCE MANAGEMENT WITH LABOR RELATIONS THANK YOU! GROUP 1 - GARCIA, MODINA, VITERBO