Handbook on Workers' Statutory Monetary Benefits (2024)

Minimum Wage: 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. 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), retail/service establishments regularly employing not more than ten workers and establishments adversely affected by natural calamities and/or human-induced disasters, may be granted full exemption for one year from the effectivity of the wage order. See Republic Act No. 7901 entitled An Act Creating Region XIII to be known as the Caraga Administrative Region, and for Other Purposes. See Republic Act No. 11054 or the Organic Law for the Bangsamoro Autonomous Region in Muslim Mindanao and Wage Order issued by the BTWPB.

Minimum Wage: Current Regional Daily Minimum Wage Rates (MWR) Link to Current Regional Daily

REGION Minimum Wage Rates (MWR) NCR https://nwpc.dole.gov.ph/ncr/ CAR https://nwpc.dole.gov.ph/car/ I https://nwpc.dole.gov.ph/region-i/ II https://nwpc.dole.gov.ph/region-ii/ III https://nwpc.dole.gov.ph/region-iii/ CALABARZON https://nwpc.dole.gov.ph/region-iva/ MIMAROPA https://nwpc.dole.gov.ph/region-ivb/ V https://nwpc.dole.gov.ph/region-v/ VI https://nwpc.dole.gov.ph/region-vi/ VII https://nwpc.dole.gov.ph/region-vii/ VIII https://nwpc.dole.gov.ph/region-viii/ IX https://nwpc.dole.gov.ph/region-ix/ X https://nwpc.dole.gov.ph/region-x/ XI https://nwpc.dole.gov.ph/region-xi/ XII https://nwpc.dole.gov.ph/region-xii/ Caraga https://nwpc.dole.gov.ph/region-xiii/ BARMM https://nwpc.dole.gov.ph/barmm/ The National Wages and Productivity Commission updates monthly the summary of current regional daily minimum wage rates which may be accessed at https://nwpc.dole.gov.ph/statistics/.

Minimum Wage: Rules in Determining Compensable Working Hours

The basis of the minimum wage rates prescribed by law shall be the normal working hours of eight hours a day. 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. 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: Rule I, Book III of the Omnibus Rules Implementing the Labor Code of the Philippines. 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. 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 work place. 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. 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. 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. 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. 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. 5. Meal 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: 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. 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. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time.

Minimum Wage: 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. “Daily-paid employees” are those who are paid on the days they actually worked and on unworked regular holidays.

Minimum Wage: Computation of the Estimated Equivalent Monthly Rate (EEMR) of Monthly- Paid and Daily-Paid Employees

Without prejudice to existing company policies, practices, or agreements, the following formula are merely suggestions and may be used as guides in determining the equivalent monthly minimum wage rates. Section 6, Chapter I of the Rules Implementing Republic Act No. 6727. The breakdown of the formula provided may vary depending on the proclaimed regular holidays and special (non-working) days in a year. Additionally, if the year is a leap year, one day shall be added to account for the extra day in February. 1. Monthly-paid employees • For those who do not work but considered paid on rest days, special (non-working) days, and regular holidays: Applicable Daily Rate (ADR)×365.0 EEMR = 12 months Where 365.0 days = 293.0 Ordinary working days 52.0 Rest days 12.0 Regular holidays 8.0 Special (non-working) days 365.0 Total equivalent no. of days in a year 2. Daily-paid employees • For those who are required to work everyday, including Sundays or rest days, special (non-working) days and regular holidays Applicable Daily Rate (ADR)×395.0 EEMR = 12 months Where 395.0 days = 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) days (8 x 1.3) 395.0 Total equivalent no. of days in a year • For those who do not work and are not considered paid on Sundays or rest days Applicable Daily Rate (ADR)×313.0 EEMR = 12 months Where 313.0 days = 293.0 Ordinary working days 12.0 Regular holidays 8.0 Special (non-working) days (10.4 if worked) 313.0 Total equivalent no. of days in a year Factor 305 may be used instead of 313 if the 8 special (non-working) days are not considered paid. • For those who do not work and are not considered paid on Saturdays and Sundays or rest days Applicable Daily Rate (ADR)×261.0 EEMR = 12 months Where 261.0 days = 241.0 Ordinary working days 12.0 Regular holidays 8.0 Special (non-working) days (10.4 if worked) 261.0 Total equivalent no. of days in a year

Minimum Wage: 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. 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.

Minimum Wage: 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. Factor 253 may be used instead of 261 if the 8 special (non-working) days are not considered paid. Sec. 4, Rule VII-A, Book III of the Rules Implementing the Labor Code. See also DOLE Q&A on Batas Kasambahay (Republic Act No. 10361) Revised Edition. Published by the DOLE-Bureau of Workers with Special Concerns. Link to Minimum Wage Rates for REGION Domestic Workers NCR https://nwpc.dole.gov.ph/ncr/ CAR https://nwpc.dole.gov.ph/car/ I https://nwpc.dole.gov.ph/region-i/ II https://nwpc.dole.gov.ph/region-ii/ III https://nwpc.dole.gov.ph/region-iii/ CALABARZON https://nwpc.dole.gov.ph/region-iva/ MIMAROPA https://nwpc.dole.gov.ph/region-ivb/ V https://nwpc.dole.gov.ph/region-v/ VI https://nwpc.dole.gov.ph/region-vi/ VII https://nwpc.dole.gov.ph/region-vii/ VIII https://nwpc.dole.gov.ph/region-viii/ IX https://nwpc.dole.gov.ph/region-ix/ X https://nwpc.dole.gov.ph/region-x/ XI https://nwpc.dole.gov.ph/region-xi/ XII https://nwpc.dole.gov.ph/region-xii/ Caraga https://nwpc.dole.gov.ph/region-xiii/ BARMM https://nwpc.dole.gov.ph/barmm/ The National Wages and Productivity Commission updates monthly the summary of monthly minimum wage of Kasambahay which may be accessed at https://nwpc.dole.gov.ph/statistics/.

Minimum Wage: Wage of Kasambahay who Works as Salesclerk

A kasambahay who works as salesclerk should receive wage in accordance with the prescribed minimum wage in the region applicable for retail and service establishments.

Minimum Wage: Effect of Reduction of Workdays on Wages

In situations where the employer has to reduce the number of regular working days to prevent serious losses, such as when there is a substantial slump in the demand for his/her goods or services or when there is lack of raw materials, the employer may deduct the wages corresponding to the days taken off from the workweek, consistent with the principle of “no work, no pay.” This is without prejudice to an agreement or company policy which provides otherwise.

Minimum Wage: Introduction

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. The Rules Implementing RA 6727 define the following as basis for wage classification: “Agriculture” 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. “Retail establishment” 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. “Service establishment” is one principally engaged in the sale of service to individuals for their own or household use and is generally recognized as such. 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: National Capital Region (NCR) Cordillera Administrative Region (CAR) Region I - Northern Luzon or Ilocos Region II - Cagayan Valley Region III - Central Luzon CALABARZON - Provinces of Cavite, Laguna, Batangas, Rizal, and Quezon MIMAROPA - Provinces of Mindoro Oriental, Mindoro Region Occidental, Marinduque, Romblon, and Palawan See Executive Order No. 103, Series of 2002 (Dividing Region IV into Region IV-A and Region IV-B, Transferring the Province of Aurora to Region III and for Other Purposes). See Republic Act No. 10879 or the MIMAROPA Act. 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) The Regional Wage Orders prescribe the daily minimum wage rates per industry per locality within the region and in some instances depending on the number of workers.

Minimum Wage: Penalty and Double Indemnity for Violation of the Prescribed Increases or

Adjustments in the Wage Rates (Republic Act No. 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 ₱25,000.00 nor more than ₱100,000.00 or imprisonment of not less than two years nor more than four 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. 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. 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.

Minimum Wage: Barangay Micro Business Enterprises (BMBEs)

BMBEs or business enterprises with valid certificate of registration 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 ₱3,000,000.00 are not covered by 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. 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 Republic Act No. 9178, otherwise known as the “Barangay Micro Business Enterprises (BMBE’s) Act of 2002”. The BMBE workers and owners shall agree on the acceptable wage rates based on the wage advisories issued by the RTWPBs.

Minimum Wage: 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 hours a day, or a proportion thereof for work less than the normal working hours. 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. A Piece-Rate Order or Production Standard Order shall be issued by the DOLE Section 5(b) of Republic Act No. 10644 entitled An Act Promoting Job Generation and Inclusive Growth Through the Development of Micro, Small and Medium Enterprises. Issued on 15 July 2014. See Department Order No. 125, Series of 2013 or the Revised Guidelines on the Conduct of Time and Motion Study (TMS). Issued on 01 April 2013 and NWPC Guidelines No. 02, Series of 2020 or the Operational Guidelines in the Conduct of Time and Motion Study (TMS). Issued on 26 May 2020. 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.

Minimum Wage: Wage of Apprentices, Learners, and Persons with disability

Wage of apprentices and learners shall in no case be less than 75% 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). 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.

Minimum Wage: Annual Establishment Report on Wages (AERW)

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.” For this purpose, all private establishments are required to register and log-in to the online report of the AERW at https://annualwagereport.nwpc.dole.gov.ph/. Establishments that do not have access to online facilities may go to the nearest RTWPB for assistance. Concerns and technical problems encountered may be sent to: wage.report@produktiboatsahod.onmicrosoft.com or to the Wage Report Hotlines at 8527-5519, 8527-8011 and 09178630855.

Minimum Wage: Coverage from Income Tax

Effective 01 January 2018, the following income payments are exempted from the requirement of withholding tax on compensation: 1. Compensation income of Minimum Wage Earners (MWEs) who work in the private sector and being paid the Statutory Minimum Wage (SMW), as fixed See Revised Guidelines in the Implementation of the Apprenticeship and Learnership Programs. Sec. 1 of Republic Act No. 10524 or the Magna Carta for Persons with Disability. See DOLE Labor Advisory No. 09, Series of 2022 for reference. BIR Revenue Regulations No. 11-2018 [Amending Certain Provisions of Revenue Regulations No. 2-98, as Amended, to Implement Further Amendments Introduced by Republic Act No. 10963, Otherwise Known as the “Tax Reform for Acceleration and Inclusion (TRAIN)” Law, Relative to Withholding of Income Tax]. Issued on 31 January 2018. by Regional Tripartite Wage and Productivity Board (RTWPB)/National Wages and Productivity Commission (NWPC), applicable to the place where he/she is assigned. 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. 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. 2. Compensation during the year not exceeding ₱250,000.00. For questions regarding minimum For questions regarding rights and wage rates, please contact the benefits of domestic workers, please contact the NATIONAL WAGES AND BUREAU OF WORKERS WITH SPECIAL PRODUCTIVITY COMMISSION CONCERNS Address: 2F & 3F, DY Intl. Building, Address: DOLE Annex Building, San Marcelino corner Gen. Malvar Cabildo Street corner Muralla Street, Streets, Malate, Manila Intramuros, Manila Telephone number: (02) 8527-8013 Telephone number: (02) 8527-5858 Website: https://nwpc.dole.gov.ph Website: https://bwsc.dole.gov.ph Facebook: www.fb.com/dole.nwpc Facebook: www.fb.com/BWSC.DOLE E-mail address: E-mail address: bwsc@dole.gov.ph info@nwpc.dole.gov.ph