The minimum wage is the lowest salary rate prescribed by the Regional Tripartite Wages and Productivity Board (RTWB) for each and every region.[1] The minimum wage will vary from region to region, particularly with the National Capital Region (NCR) as it has the highest rate due to high cost of living allowance.

Wage is “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 for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value,[2] as determined by the DOLE Secretary, of board, lodging and other facilities customarily finished by the employer to the employee.”[3]

If the employer fails or refuses to pay minimum wage, he is liable to pay an amount equivalent to double the unpaid benefits owing to the employee.[4] He may also face criminal prosecution despite payment of the indemnity.[5]

Exceptions to Minimum Wage

The following employees may be paid below minimum wage:

  • Those employed under farm tenancy or leasehold arrangements;[6]
  • Household or domestic helpers, including family drivers and person in the personal service of another;[7]
  • Homeworkers engaged in needlework; [8]
  • Workers employed in any establishment duly registered with the National Cottage Industries and Development Authority in accordance with R.A. 3470, provided that such workers perform the work in their respective homes;[9]
  • Workers in any duly registered cooperative when so recommended by the Bureau of Cooperative Development and upon approval of the DOLE Secretary, provided such recommendation is 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 though its exemption from the requirements of this Rule;[10]
  • Employees of Barangay Micro Business Enterprises (BMBE);[11]
  • Employees of retail/service establishments regularly employing not more than 10 workers may be exempted upon application with and as determined by the appropriate Regional Board in accordance with the applicable rules and regulations by the NLRC;[12]
  • Employees of distressed establishments, new enterprises, and establishments affected by calamities;[13]
  • Apprentices under apprenticeship agreements/programs duly approved by DOLE;[14]
  • Learners;[15] and
  • Handicapped workers.[16]

Note: For numbers  8 and 9, the employer is required to get an approval from DOLE.[17]

Best Legal Practices:

Get DOLE clearance first before paying below minimum wage – As laws and DOLE regulations change over time, and due to possible criminal liabilities, the employer should obtain clearance first from DOLE prior to paying employees below minimum wage to avoid liabilities.

Unless otherwise exempted, the employer is required to pay the minimum wage.

*Comment or feedback: info@jdpconsulting.ph

References 

[1] LABOR CODE. Article 99.

[2] Fair and reasonable value does not include any profit to the employer, or to any person affiliated with the employer (Article 97[f], Labor Code).

[3] Ibid. Article 97 (f).

[4] R.A. 6727, as amended by R.A. 8188, Section 12; See also CIVIL CODE, Article 1419.

[5] Ibid. “The responsible officer of an employer corporation can be held personally, not to say even criminally, liable for the non-payment of back wages.  That is the policy of the law. In the Minimum Wage Law, Section 15 (b) x x x” (Consuelo Valderam v. National Labor Relations Commission, G.R. No. 98239, 25 April 1996).

[6] LABOR CODE. Article 98.

[7] Ibid. Article 141, cf. R.A. 6727 (Wage Rationalization Act), Sec. 4 (c); Seealso  IMPLEMENTING RULES OF BOOK III OF THE LABOR CODE, Section 3 (a), Rule VII-A.

[8] IMPLEMENTING RULES OF BOOK III OF THE LABOR CODE, Section 3(b), Rule VII-A; See also Article 98, Labor Code.

[9] Ibid.

[10] Ibid. See also Opinion dated 18 January 1990 by the Secretary of Justcice. The exemption shall be subject to such terms and conditions and for such period of time as the Secretary of Labor may prescribe.

[11] R.A. 9178 (BMBE Act of 2002), Section 8. A “barangay micro business enterprise” is “any business entity or enterprise engaged in the production, processing, or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situation, shall not be more than Three Million Pesos (P3,000,000.00)” (Sec. 3[a]).

[12] R.A. 6727 (Wage Rationalization Act), Sec. 4(c).

[13] National Wages and Productivity Commission (NWPC) Guidelines No. 02, Series of 2007, Amended Rules on Exemption from Compliance with the Prescribed Wage Increases/Cost of Living Allowances Granted by the Regional Tripartite Wages and Productivity Board; cf.  LABOR CODE, Articles 99 and 122.

[14] LABOR CODE. Article 61.

[15] Ibid. Article 75 (c).

[16] Ibid. Article 80 (b).

[17] Id at 136.