Minimum wage The lowest wage rate fixed by law that an employer can pay his workers.

What are the consequences of paying lesser than the minimum wage rate? It is considered as underpayment that violates the law. There is a need for margin over the minimum wage. What does this mean? The minimum wage must be fair and just. It does not imply the actual minimum. Some margin or leeway must be provided, over and above the minimum, to take care of contingencies, such as increase of prices of commodities and increase in wants, and to provide means for a desirable improvement in his mode of living. The establishment of the minimum wage benefits directly the low-paid employees. The establishment of minimum wages is a prerequisite to the adoption of needed social security program because it is not reasonable to ask a man to set aside something for the future when he does not have enough to eat today. Was the ability of the employer to pay material? No. The employer cannot exempt himself from liability to pay minimum wages because of poor financial condition of the company, the payment of minimum wages not being depended on the employers ability to pay. The payment of such (minimum) wage is a mandatory statutory obligation that is not depended upon ones ability to pay. (De Racho vs. Municipality of Ilagan, 22 SCRA 1 (1968)). Are the employees stopped when they accepted a wage lower than the minimum wage set by law? No. The acceptance by an employee of the wages paid him without objection does not give rise to estoppels precluding him him from suing for the difference between the amount he should received pursuant to a valid minimum wage law where it does not appear that the employer changed his position to his own prejudice. A laborer who accepts a lower wage than what the law sets as minimum wage for laborers shall be entitle to receive the defiviency. Who are exempted from the coverage mimimum wage law? A. Under the Implementing Rules. 1. Household or domestic helpers, including family drivers and person in the personal service of another; Note: RA No. 10361 or the Batas Kasambahay, one of the mandatory benefits of the kasambahay is the monthly minimum wage. Who are covered by the new law? All kasambahay engaged in domestic work, whether on a live-in or live-out arrangement,

such as, but not limited to, the following: a. general househelp; b. yaya; c. cook; d. gardener; e. laundry person; f. working children or domestic workers 15 years and above but below 18 years of age; or g. any person who regularly performs domestic work in one household on an occupational basis (live-out arrangement). ** including family drivers and person in the personal service of another are not covered by the new law. Home-workers engaged in needle-work Workers employed in any establishment duly registered with the National Cottage Industries and Development Authority in accordance with RA No. 3470, provided that such workers perform the work in their respective homes. Workers in any duly registered cooperative when so recommended by the Bureau of Cooperative Development and upon the approval of the Secretary of Labor; Provided, however, that such recommendation shall be given only for the purpose of making the cooperative viable and upon finding and certification of said Bureau supported by adequate proof , that the cooperative cannot resort to other remedial measures without serious loss or prejudice to its operation except through its exemption from the requirements of the Rules. The exemption shall be subject to such terms and conditions and for such period of time as the Secretary of Labor and Employment may prescribe. Under the Laws 1. BMBEs ( Barangay Micro Business Enterprises) as provided under Sec. 8 of RA 9178 or the BMBE act of 2002 2. Retail and Service Establishments as provided under Sec. 4 RA No. 6727 or Wage Rationalization Act. Requisites to be exempt from the Minimum Wage Law: a. The establishment is regularly employing not more than ten workers; b. It applied for exemptions with and as determined by the appropriate Regional Board in accordance with the applicable rules and regulations issued by the Commission. What is the effect when the application for exemption is not granted? The employees shall receive the appropriate compensation due them as provided by RA No. 6727 plus interest of 1% per month retroactive to the effectivity of this Act. C. Other Exemptions Wage orders issued by the wage boards under Arts 99 and 122 may provide for other exemptions from the minimum wage law.

2. 3.

4.

B.

PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS Art 100 prohibits elimination or diminution of supplements or employment benefits being enjoyed as of May 1, 1974, the date the Labor Code was promulgated. Principle of Non-diminution of benefits Basis: The principle of non-diminution of benefits is founded on the Constitutional mandate to protect the rights of workers and promote their welfare, and to afford labor full protection. *Arco Metal Products Co., Inc. vs. Samahan ng mga Manggagawa sa Arco Metal-NAFLU (SAMARM-NAFLU), 554 SCRA 110(2008)] Article 1308 of the Civil Code- Principle of mutuality of contracts- the terms of a contract-both express and implied- cannot be withdrawn except by mutual consent or agreement of the contracting parties.
Arco Metal Products Co., Inc. vs. Samahan ng mga Manggagawa sa Arco Metal-NAFLU (SAMARMNAFLU),554 SCRA 110 , May 14, 2008

GR: NONDIMINUTION OF BENEFITS, ART 100 Benefits given to employees cannot be taken back or reduced unilaterally by the employer because the benefit has become part of the employment contract, written on unwritten. Requisites: 1. The grant of the benefit is founded on a policy or has ripened into a practice over a long period; - Jurisprudence has not laid down any rule specifying a minimum number of years within which a company practice must be exercised in order to constitute voluntary company practice. [Arco Metal Products Co., Inc. vs. Samahan ng mga Manggagawa sa Arco Metal-NAFLU (SAMARMNAFLU), 554 SCRA 110(2008)] 2. The practice is consistent and deliberate; 3. The practice is not due to error in the construction or application of a doubtful of difficult question of law; and 4. The diminution or discontinuance is done unilaterally by the employer. -principle of mutuality of contract. e.g.do not read 1. Food or meal allowance- driver and conductors of Bus Company 2. Noncontributory retirement plan- noncontributory; non issue in the CBA negotiations; principle of mutuality of contracts 3. Monthly Emergency Allowance 4. Full 13th Month Pay

EXCEPTIONS TO THE GR: 1. Correction of error; the single instance may not be considered an established company practice. 2. Negotiated benefits; contained in CBA; products of bilateral contract; it can only be diminished or eliminated bilaterally 3. Wage order compliance; 4. Benefits on reimbursement basis; 5. Reclassification of position; it must be done in good faith. The personnel movement should not be intended to circumvent the law to deprive employees of the benefits they used to receive 6. Contingent benefits or conditional bonus; the grant is based on the existence of certain conditions; WON it is a part of wage or not? -without any conditions; part of wage -paid only if profits are realized on a certain amount of productivity achieved; not part of wage 7. Productivity incentives; the grant or demandability depends on the existence of certain preconditions; same as profit share or bonus. What if the benefits currently enjoyed by the employees will be changed into equal or better benefits? The elimination of an existing benefit in exchange for an equal or better one does not violate Art. 100. (Asis vs. Minister of Labor and Employment, 171 SCRA 237 , March 15, 1989) When an employee signed a satisfaction receipt for his claims, will it result to waiver of his claim? No. The law does not consider as valid any agreement whereby a worker agrees to receive less compensation than what he is entitled to receive. A deed of release or quitclaim cannot bar an employee from demanding benefits to which he is legally entitled. While rights may be waived, the same must not be contrary to law, public order, public policy, moral or good customs or prejudicial to a third person with a right recognized by law. Art. 6 of the Civil Code renders a quitclaim agreement void ab initio where the quitclaim obligates the workers concerns to forego their benefits while at the same time exempting the employer from any liability that it may choose or reject. This runs counter to Art 22 of the CC which provides that no one shall be unjustly enriched. What is the meaning of the term benefits? In the Courts view, the term benefits mentioned in the non-diminution rule refers to monetary benefits or privileges given to the employee with monetary equivalents. Such benefits or privileges form part of the employees wage, salary or compensation making them enforceable obligations. This Court has already decided several cases regarding the non-diminution rule where the benefits or privileges involved in those cases mainly concern monetary considerations or privileges with monetary equivalents. Some of these cases are: Eastern Telecommunication Phils. Inc. v. Eastern Telecoms Employees Union, 665 SCRA 516 (2012), where the case involves the payment of 14th, 15th and 16th month bonuses; Central Azucarera De Tarlac v. Central Azucarera De Tarlac Labor Union-NLU, 625 SCRA

622 (2010), regarding the 13th month pay, legal/special holiday pay, night premium pay and vacation and sick leaves; TSPIC Corp. v. TSPIC Employees Union, 545 SCRA 215 (2008), regarding salary wage increases; and American Wire and Cable Daily Employees Union vs. American Wire and Cable Company, Inc., 457 SCRA 684 (2005), involving service awards with cash incentives, premium pay, Christmas party with incidental benefits and promotional increase. [Royal Plant Workers Union vs. Coca-Cola Bottlers Philippines, Inc.-Cebu Plant, 696 SCRA 357(2013)]

13th Month Pay (PD No. 851) - Additional income required by law which is equivalent to 1/12 of the total basic salary earned by an employee within a calendar year. Who are entitled? All rank-and-file employees, regardless of salary rate, but still excluding managerial or supervisory employees. Every employee receiving a commission in addition to a fixed or guaranteed wage or salary is entitled to a 13th month pay which must be 1/12 of the total earnings during the calendar year. -Another cause or source of augmented income in statutory grant. -It is equivalent to Christmas Bonus and Midyear bonus; not including cash and stock dividends, COLA and other allowances regularly enjoyed by the employees as well as nonmonetary benefits such as food or meal allowance; not the same as 14th Month Pay -May be given anytime but not after Dec. 24. Is there a need to write in contract? What is the effect if it is not written in the contract? The payment of the 13th Month Pay being a statutory grant, compliance with the same is mandatory and is deemed incorporated in the CBA. Exclusions 1. COLA 2. Profit- sharing allowances 3. Monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee 4. Overtime pay earnings and other renumerations Pro-rated 13th Month Pay An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th Month Pay is entitled to this monetary benefit in proportion to the length of time

he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation up to the time of his resignation or termination from service. May an employer be exempted from paying 13th month pay? The IRR of the 13th Month Pay Law provides that a distressed employer shall qualify for exemption from the requirement of the decree only upon prior authorization from the Sec of Labor and Employment. What is the effect if such authorization is not obtained? The employer is not exempted. The difference of opinion on how to compute the 13th month pay does not justify a strike; in other words it is a nonstrikeable issue and the strike held on that ground I illegal. Non-payment of the 13th month pay shall be treated as money claims cases Who are excluded from the coverage of the 13th Month Pay Law? 1. 2. 3. 4. Government employees Managerial and supervisory employees Seafarers Piece-Rate Workers

Payment by Results -they do nontime work 2 Groups 1. Those whose time and performance are supervised by the employer -control and supervision over the manner as how to work is to be performed; done in the company premises -the output may esily be counted or measured -piece-rate worker 2. Those whose time and performance are unsupervised by the employer -control is merely over the result of the work itself -the job or work to be performed is in bulk or volumes which are difficult to quantify -Workers on pakyaw and takay -commonly practiced in the agricultural industry Is it determinative of er-ee relationship? Payment by result is not determinative of er-ee relationship. It is a method of compensation and does not define the essence of relation. It is a mthoed computing compensation, not a basis for determining the existence or absence of er-ee relationship.

2 categories of piece rate workers 1. Those who are paid piece rates which are prescribed in Piece Rate Ordersissued by DOLE -multiply the number of pieces produced by the rate per piece; not covered by the Rule on Hours of Work; 2. Those who are paid output rates which are prescribed by the employer and are not yet approved by DOLE -the number of pieces produce is multiplied by the rate per piece as determined by the employer; if it is less than the legal rate, the employer is required by law to pay the difference between the resulting amount and the applicable legal minimum rate. Benefits Payable to Piece-Rate Workers 1. 2. 3. 4. 5. 6. 7. 8. 9. Applicable statutory minimum daily rate; SIL Night Shift differential pay Holiday Pay Meal and rest Periods Overtime Pay (Conditional) Premium Pay (Conditiona) 13th Month Pay Other Benefits granted by law, by individual or CBA or company policy or practice.

Note: The rule implementing the Labor Code on NSD and SIL do not apply to employees whose time and performance is unsupervised by the employers, including those who are engaged on task or contract basis, purely commission or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. What is the effect of failure to reach the quota? It does not only mean less earnings but it may even mean demotion or loss of job. PAYMENT OF WAGES Is it unlawful to pay wages only once a month? May the wages be paid in form of goods such as phone cards? ART 102.. What if the employee expressly requested to be paid by such? Even, it is not allowed. GR: Payment by legal tender XPN: Art 102

Proof of Wage Payment -where the employee alleges non-payment of wages and/or commission, the employer has the burder to prove payment. -Payroll- kept by the employer; length of time paid, the pay rate, the amount actually paid; it should be signed by the employee. TIME AND PLACE OF PAYMENT Time: GR: ART 103 XPN: Art 103 Place of Payment: GR: ART 104 XPN: 1. When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions, or by reason of actual or impending emergencies caused by fire, flood, epidemic or other calamity rendering payment thereat impossible; 2. When the employer provides free transportation to the employees back and forth; and 3. Under analogous circumstances; provided that the time spent by the employees in collecting their wages shall be considered as compensable hours worked. Is payment through ATM allowed? Yes. It is allowed under a labor advisory dated Nov. 25, 1996. Direct Payment of Wages: GR: ART 105 XPN: ART 105 Legal Prohibitions on Wages 1. 2. 3. 4. Payment of wages in non-cash form; Payment of Wages in night and day clubs, bars and other similar places; Non-diminution of wages; and Non-interference by the employers in the employees disposition of their wages.

CONTRACTOR or SUBCONTRACTOR; two type of contractor Trilateral Relationship 1. The principal which decided to farm out a job or service to a contractor or sub contractor; 2. The contractor/subcontractor which has the capacity to independently undertake the performance of the job, work or service; and 3. The contractual workers engaged by the contractor/subcontractor to accomplish the job, work or service.

Law that regulates the relationship between principal and contractor; Civil Code and pertinent commercial laws Law that regulates the relationship between contractor and its employees; Labor code and other special labor laws Principal- employees of the contractor; no er-ee relationship What is the effect when er-ee relationship will exist between the principal and the workers? The contracting arrangement is not legitimate; not lawful; considered as labor-only contracting; unlawful for being against public policy.