WAGES

Labor Code Art. 97.6 "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.

RIGHT TO A “LIVING WAGE”

Section 3, Art 8, 1987 Constitution xxx State shall guarantee the rights of all
workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with
law. They shall be entitled to security of tenure, humane conditions of work,
and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law. Xxx

2 CLASSIFICATIONS OF EMPLOYEES BASED ON TIME SPENT

1. Daily-paid
2. Monthly-paid

METHODS OF FIXING COMPENSATION

A. Time [daily and monthly paid workers]
B. Commission
C. Job or task basis
D. Piece-rate basis

PURPOSE OF MINIMUM WAGE

1. To promote productivity-improvement and gain-sharing measures to ensure
a decent standard of living for the workers and
their families.
2. To guarantee the rights of labor to its just share in the fruits of production.
3. To enhance employment generation in the countryside through industry
dispersal and to allow business and industry
reasonable returns on investment, expansion and growth.
4. To affirm, as the Constitution expresses it, labor as a primary social
economic force.
5. That wages are distributed evenly, and more importantly, social justice is
sub served.
POWER TO ISSUE WAGE ORDERS
Art 122 LC. The Regional Boards shall have the following powers and
functions in their respective jurisdiction:
b. To determine and fix minimum wage rates applicable in their region,
provinces or industries therein and to issue the corresponding wage orders
subject to guidelines issued by the Commission (As amended by Republic Act
No. 6727, June 9, 1989).
􀂙 Wage Orders issued by the Boards cover only private sector workers, except
for household helpers and persons in the personal employ of another, including
family drivers.

EXEMPTION FROM WAGE ORDERS:

1. Distressed establishments
2. New business enterprises (NBEs)
3. Retail/Service establishments employing not more than ten (10) workers
4. Establishments adversely affected by natural calamities

NON-DIMINUTION OF BENEFITS
Art. 127 LC. Non-Diminution of Benefits. No Wage Order issued by any
regional board shall provide for wage rates lower than the statutory minimum
wage rates prescribed by Congress.

Wage Distortion - Distortion where an increase in the prescribed wage rates

results in the elimination or severe contraction of intentional quantitative
differences in wage salary rates between and among EE groups in an
establishment as to effectively obliterate the distinctions embodied in such
wage structure based on skills, length of service, or other logical bases of
differentiation.

“FACILITIES” shall include articles or services for the benefit of the employee
or his family but shall not include tools of the trade or articles or service
primarily for the benefit of the employer or necessary to the conduct of the
employer’s business.

Requisites:
1. Must be customarily furnished by the employer to the employees
Customary – is founded on long-established and constant practice connoting
regularity.
2. Must be charged at a fair and reasonable value
3. The provision on deductible facilities must be voluntarily accepted by the
employee in writing. (Mabeza vs. NLRC)
“SUPPLEMENTS constitute extra remuneration or special privileges or benefits
given to or received by the laborers over and above their ordinary earnings or
wages.”

I. WORKER’S LIEN
Art 1707 CC: The laborer’s wages shall be a lien on the goods manufactured or
the work done.
Reason: By virtue of this new lien, the laborers who are not paid by an
unscrupulous and irresponsible industrialist or manager may by legal means
have the goods manufactured thru the sweat of their brow sold, and out of the
proceeds get their salary, returning the excess, if any [Report Code
Commission, p.14]

EXEMPTION FROM EXECUTION OR ATTACHMENT

Art 1708 CC: The laborer’s wages shall not be subject to execution or
attachment, except for debts incurred for food, shelter,
clothing and medical attendance.
GR: Wages are not subject to execution.
Exception: Debts incurred for support such as food, shelter, clothing, medical
attendance.

WORKER’S PREFERENCE
Article 110. Worker preference in case of bankruptcy. – In the event of
bankruptcy or liquidation of an employer’s business, his workers
shall enjoy first preference as regards their wages and other monetary claims,
any provisions of law to the contrary notwithstanding.
Such unpaid wages and monetary claims shall be paid in full before claims of
the government and other creditors may be paid. (As
amended by Section 1, Republic Act No. 6715, March 21, 1989)

SCOPE
Workers preference covers both unpaid wages and monetary claims

WAGE DEDUCTION
Article 113. Wage deduction. No employer, in his own behalf or in behalf of
any person, shall make any deduction from the wages of his employees,
except:
(a) In cases where the worker is insured with his consent by the employer, and
the deduction is to recompense the employer for the amount
paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to
check-off has been recognized by the employer or authorized in
writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by
the Secretary of Labor and Employment.
GR: No employer, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees
Except:
1. In cases where the worker is insured with his consent by the employer, and
the deduction is to recompense the employer for the
amount paid by him as premium on the insurance;
2. For union dues, in cases where the right of the worker or his union to
check-off has been recognized by the employer or authorized in
writing by the individual worker concerned; and
3. In cases where the employer is authorized by law or regulations issued by
the Secretary of Labor and Employment.

CONDITIONS OF EMPLOYMENT
EMPLOYEES EXEMPTED
ART. 82. Coverage. - The provisions of this Title shall apply to employees in
all establishments and undertakings whether for profit or not, but
not to government employees, managerial employees, field personnel, members
of the family of the employer who are dependent on him for support,
domestic helpers, persons in the personal service of another, and workers who
are paid by results as determined by the Secretary of Labor in appropriate
regulations.
As used herein, "managerial employees" refer to those whose primary duty
consists of the management of the establishment in which they are
employed or of a department or subdivision thereof, and to other officers or
members of the managerial staff.
"Field personnel" shall refer to non-agricultural employees who regularly
perform their duties away from the principal place of business or
branch office of the employer and whose actual hours of work in the field
cannot be determined with reasonable certainty.
Labor Standards Benefits covered under Art. 82:
(a) Night Shift Differential;
(b) Overtime pay;
(c) Holiday pay;
(d) Service Incentive Leave; and
(e) Service Charges

NORMAL HOURS OF WORK

ART. 83. Normal hours of work. - The normal hours of work of any employee
shall not exceed eight (8) hours a day. Health personnel in cities and
municipalities with a population of at least one million (1,000,000) or in
hospitals and clinics with a bed capacity of at least one hundred (100) shall
hold regular office hours for eight (8) hours a day, for five (5) days a week,
exclusive of time for meals, except where the exigencies of the service require
that such personnel work for six (6) days or forty-eight (48) hours, in which
case, they shall be entitled to an additional compensation of at least thirty
percent (30%) of their regular wage for work on the sixth day.

For purposes of this Article, "health personnel" shall include resident

physicians, nurses, nutritionists, dietitians, pharmacists, social
workers, laboratory technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic personnel.
The normal hours of work of any employee shall not exceed eight (8) hours a
day.
Art. 84. HOURS WORKED – Hours worked shall include (a) all time during
which an employee is required to be on duty or to be at a prescribed workplace,
and (b) all time during which an employee is suffered or permitted to work.
Rest periods of short durations during working hours shall be counted as
hours worked.

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.
(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.

Art. 85. MEAL PERIODS – Subject to such regulations as the Secretary of

Labor may prescribe, it shall be the duty of every employer to give his
employees
not less than sixty (60) minutes time-off for their regular meals.
Under this article the meal period should not be less than 60 minutes, in
which case it is time-off or non-compensable time.

COMPRESSED WEEK
* While as a general rule, the right to overtime pay cannot be waived under
existing laws, the EE’s and ER can agree to a compressed workweek of 5 days
of 9 hours each with no payment of overtime if this will redound to the benefit
of the workers i.e. if the original workweek is reduced from Monday – Saturday
to Monday – Friday.
WEEKLY REST DAY
Art. 91. RIGHT TO WEEKLY REST DAY –
(a) It shall be the duty of every employer, whether operating for profit or not, to
provide each of his employees a rest period of not less than twenty-four (24)
consecutive hours after every six (6) consecutive normal work days.
(b) The employer shall determine and schedule the weekly rest day of his
employees subject to collective bargaining agreement and to such rules and
regulations as the Secretary of Labor may provide. However, the employer shall
respect the preference of employees as to their weekly rest day when such
preference is based on religious grounds. (to accommodate members of the 7th
day Adventists and others)

Under the BLUE SUNDAY LAW, the employees’ rest day was imposed every
Sunday. But when the Labor Code took effect in 1974, it gave more flexibility
on the part of the employer to determine what rest day will be best for his
business. There are certain types of establishments that derive more money
during Sundays and Saturdays. And on the other hand, there may be some
establishments that are not productive during Sundays. Example: Malls,
Department Stores. In those establishments, it will be possible to schedule the
employees’ rest day on days other than Sunday. The employer has the
prerogative to determine the employee’s rest day. When it does, the employer
can change the employees’ rest day only after giving a NOTICE, and the change
will take effect 1 week after such notice.

NIGHT SHIFT DIFFERENTIAL;

Article 86. Night shift differential. Every employee shall be paid a night shift
differential of not less than ten percent (10%) of his regular wage for each hour
of work performed between ten o’clock in the evening and six o’clock in the
morning. Every employee shall be paid a night shift differential of not less than
ten percent of his regular wage for each hour of work performed between ten
o'clock in the evening and six o'clock in the morning (10 pm – 6am).

Overtime Work –
regular work day – plus 25% basic hourly rate
Special days, holiday or rest day – plus 30% of the regular hourly rate on said
days.

Art. 89 : Emergency Overtime Work - Any EE may be required by the ER to

perform overtime work in any of the following cases:
[WED-UPS]
When the country is at war
When any other national or local emergency has been declared
 When it is necessary to prevent loss of life or property or in case of
imminent danger to the public safety due to an actual or impending
emergency in the locality caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic or other Disaster or calamity.
When there is Urgent work to be performed on machines and
installations in order to avoid serious loss or damage to the ER or some
other cause of similar nature.
When the work is necessary to prevent loss or damage to Perishable
goods.
Where the completion or continuation of the work started before the 8 th
hour is necessary to prevent Serious obstruction or prejudice to the
business operations of the ER.

Art. 88: Under time work in any particular day shall not be offset by overtime
work on another day BUT not on someday. Permission given to the EE to go on
leave on some other day of the week shall not exempt the ER from paying the
additional compensation required.

COMPENSATION FOR REST DAY, SUNDAY OR HOLIDAY WORK.

Where an employee is made or permitted to work on his scheduled rest day, he
shall be paid an additional compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such additional compensation
for work performed on Sunday only when it is his established rest day.

When the nature of the work of the employee is such that he has no regular
workdays and no regular rest days can be scheduled, he shall be paid an
additional compensation of at least thirty percent (30%) of his regular wage for
work performed on Sundays and holidays.

Work performed on any special holiday shall be paid an additional

compensation of at least thirty percent (30%) of the regular wage of the
employee.

Where such holiday work falls on the employee’s scheduled rest day, he shall
be entitled to an additional compensation of at least fifty per cent (50%) of his
regular wage.

Where the collective bargaining agreement or other applicable employment

contract stipulates the payment of a higher premium pay than that prescribed
under this Article, the employer shall pay such higher rate.

􀂾 For work done on rest day and special holidays, the employer must pay the
employee:
(1) his regular remuneration (100%)
 (2) an additional sum of at least 30% of the regular remuneration, which
is called the “premium pay.”
In other words, the pay for rest day and special holidays is 130% of the pay for
ordinary days, but only 30% as additional pay for eight-hour work is the
premium pay. Sunday work entails premium pay only if it is the employee’s
rest day.

With respect to employees paid on a monthly basis, the first 100%

corresponding to the regular remuneration may or may not be included in the
monthly salary. If it is, then the employee is entitled to collect only the
premium of 30%. If it is not, then the employee has a right to receive the entire
130%

Article 94. Right to holiday pay. –

(a) Every worker shall be paid his regular daily wage during regular holidays,
except in retail and service establishment regularly employing less than
ten workers;
(b) The employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular rate; and
(c) As used in this Article, "holiday" includes: New Year's Day, Maundy
Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June,
last Sunday of August, first of November, the thirtieth of November, the twenty-
fifth and the thirtieth of December, thirty-first of December, and the day
designated by law for holding a general election.

Article 93. Compensation for rest day, Sunday or holiday work.

Work performed on any special holiday shall be paid an additional
compensation of at least thirty percent (30%) of the regular wage of the
employee. Where such holiday work falls on the employee’s scheduled rest day,
he shall be entitled to an additional compensation of at least fifty per cent
(50%) of his regular wage.

Successive regular holidays. — Where there are two (2) successive regular
holidays, like Holy Thursday and Good Friday, an employee may not be paid
for both holidays if he absents himself from work on the day immediately
preceding the first holiday, unless he works on the first holiday, in which case
he is entitled to his holiday pay on the second holiday.

Double Holiday Rule

Asian Transmission case:
If unworked – 200% of the basic wage (to give the employee only 100% would
reduce the number of holiday under EO No. 203)
If worked – 300% of the basic wage
If falls on a rest day – [100% (basic pay) + 30% (premium pay)] + 200% (double
holiday) = 390% of the basic wage

Flexi-Holiday Schedule
One where the employees agree to avail of holidays at some other days provided
there is no diminution of existing benefits as a result of
such arrangement.