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PRIMER ON WAGE ORDER NO.

RX-18

1. What is Wage Order No. RX – 18?


It is an order issued by the Regional Tripartite Wages and Productivity
Board – X, prescribing new minimum wage rates to minimum wage
earners in Region X.

2. When will Wage Order No. RX-18 take effect?


Effective July 3, 2015, the new minimum wage rates of covered
workers and employees in the private sector shall be increased in the
basic wage of twelve pesos (P12.00) per day.

3. How much is the New Minimum Wage Rates?


The minimum daily wage rates of covered workers and employees in
the private sector shall be, as follows:

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4. Who are covered by the new minimum wage rates?
It covers all minimum wage earners in the Private Sector in Region X,
regardless of their position, designation or status of employment and
irrespective of the method by which their wages are paid.

5. Who are excluded from the coverage of the new minimum wage
rates?
a. Domestic Helpers or Kasambahays covered under RA 10361;
b. Persons employed in the personal service of another including
family drivers;
c. Workers in registered Barangay Micro Business Enterprises
(BMBEs) with Certificates of Authority.

6. Who is a Minimum Wage Earner?


A minimum wage earner shall refer to a worker in the private sector
paid the statutory minimum wage.

The statutory minimum wage is the lowest wage rate fixed by law that
an employer can pay his workers.

7. What is the basis for computing the minimum wage?


It is based on the normal working hours which shall not exceed eight
(8) hours.

8. What is the applicable minimum wage for mobile and branch


workers?
A worker who by the nature of his/her work has to travel, shall apply
the Wage Rate of the domicile/head office of the employer. For those
worker/employee who works in a branch office or agencies of
establishments within the region, shall apply the Wage Rate of the
place where he/she is stationed.
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9. What will happen to workers who are transferred to other Regions?
The transfer of personnel to areas outside the Region shall not be a
valid ground for the reduction of the wage being enjoyed by the worker
prior to such transfer. The workers transferred to other regions with
higher wage rates shall be entitled to the wage rate applicable on that
region.

10. How about the Wage Rate of Establishments employing ten (10)
workers or less?
All establishments situated in the areas of Wage Category I, II and III
shall apply the Wage Rate in Wage Category III.

However, if the establishment is not located in the areas of Wage


Category I, II and III, even if it employs ten (10) workers or less, it will
apply the wage rate of Wage Category IV.

Example:
a. An establishment in Cagayan de Oro City employing only eight (8)
workers has to apply the Wage Rate of Wage Category III, in the
amount of P308.00 and not in Wage Category I.

b. An establishment not located in the areas of Wage Category I, II


and III, even if it employs eight (8) workers will apply the Wage
Rate of Wage Category IV, in the amount of P303.00.

11. What is the basis of the Minimum Wage?


It is based on the normal working hours, which shall not exceed eight
(8) hours work a day.

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12. If it is based on the normal working hours, how about Workers Paid
by Result?
Workers paid by result including those paid by piecework, takay,
pakyaw or task basis shall be entitled to receive not less than the
prescribed new minimum wage per eight (8) hours work a day or a
proportion thereof for working less than eight (8) hours.

a. Amount of Increase in AMW* x 100 = % Increase


Previous AMW
b. Existing Rate/Piece x % Increase = Increase in Rate/Piece
c. Existing Rate/Piece + Increase in rate/Piece = Adjusted Rate/Piece
*Applicable Minimum Wage

13. What is the rule on workers under Contracting Arrangement?


In the case of contracts for construction projects, security, janitorial
and similar services, their wages shall be automatically adjusted in
accordance with this Order. The prescribed increases in the wage rates
of the workers shall be borne by the principal of the contractor and the
contract shall be deemed amended accordingly. In the event, however,
that the principal fails to pay the prescribed wage rates, the
construction/service contractor shall be jointly and severally liable.
Contracting arrangement is when an employer/principal, contracts the
performance of another, referred to as the contractor or
subcontractor. The contractor then employs its own
workers/employees.

14. How about the wages of the Special Group of Workers (Learnership,
Apprenticeship, Handicapped)?
Wages of apprentices and learners of accredited learnership and
apprenticeship programs shall in no case be less than seventy-five
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percent (75%) of the applicable minimum wage rates prescribed in
this Order. It must be noted that the apprenticeship and learnership
agreements must be approved by TESDA.

All qualified handicapped workers shall receive the full amount of


increase in this Order pursuant to R.A. 7277.

15. What is the rule on Private Educational Institutions and


Technical/Vocational Education and Training Schools?
The share of covered workers and employees in the increase of tuition
fees for the current school year shall be considered as compliance with
the increases prescribed herein. However, any shortfall in the basic
wage set forth herein shall be paid starting the opening of the next
school year.

Private educational institutions which have not increased their tuition


fees for the current school year may defer compliance with the
provisions of this Wage Order until the beginning of the next school
year.

16. What will happen to those workers/employees whose salary will be


affected in the application of the wage increase, e.g. already receives
P318/day?
The situation will result to Wage Distortion.

17. What is Wage Distortion?


Wage Distortion is a situation where an application of the wage
increase results in the elimination of the differences of the salary rates
between and among employees. It happens when there is:
a. An existing hierarchy of positions with corresponding salary rates.

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b. A significant change in the salary rate of a lower pay class without a
concomitant increase in the salary rate of a higher one.
c. The elimination of the distinction between the two levels.
d. The existence of the distortion in the same region of the country.

18. How do we solve the Wage Distortion?


It depends whether an establishment is unionized or non-unionized.
a. Unionized – Employer and Union shall negotiate to correct the
distortions using the Grievance Machinery in the CBA. If it remains
unsolved, it shall be decided through Voluntary Arbitration within
10 calendar days.
b. Non-Unionized – Employer and Workers shall endeavor to correct
the distortions. If negotiation fails, it shall be settled through
NCMB. If it remains unsolved for 10 calendar days of conciliation,
the dispute shall be referred to NLRC within 20 calendar days.

19. Is there a formula to correct the Wage Distortion?


There are several formulas to solve wage distortion. Wage Order No.
RX-18 suggests the Pineda Formula as shown below. However, it
neither compulsory nor mandatory in nature, any other agreement
may be adopted. It is incumbent upon the Management to choose
among the suggested formulas to apply which is more advantageous to
both management and labor.

Previous Minimum Wage (WO RX-17) x Wage Increase (WO RX-18)


Current Wage of Employee

20. Will an Employer still needs to comply if it already granted a wage


increase prior to the effectivity of W.O. RX – 18?
All wage increases granted to workers/employees within three (3)
months prior to the effectivity of W.O. RX – 18 shall be credited as
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compliance with the order. However, if such increases are less than the
prescribed wage rate, the employer shall pay the difference.

Such creditable increases shall not include Collective Bargaining


Agreement (CBA) anniversary wage increases, merit increases and
those resulting from regularization or promotion of employees, unless
there is an agreement expressly allowing such crediting.

21. What will happen to an Employer who does not comply with W.O.
RX- 18?
An employer who does not comply with the W.O. RX – 18 will be
subject to criminal liability and payment of indemnity.

An employer who refuses or fails to pay the prescribed wage increase


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 fine and imprisonment at the discretion of
the court. Provided, any person convicted under the wage order shall
not be entitled to the benefits provided under Probation Law.

The employer concerned shall be ordered to pay an amount equivalent


to double the unpaid benefits owing to the worker. Provided, that
payment of indemnity shall not absolve the employer from criminal
liability.

22. How about those employers/establishments who could not comply


with W.O. RX-18, can they apply for exemption?
Yes, upon application and as determined by the Board, establishments
may apply for exemption, provided they belong to a wage exemptible

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category and they follow the application procedure and criteria
provided by the Board.

23. What are these Exemptible Categories?


a. Distressed establishments;
b. New business enterprises (NBEs);
c. Establishments adversely affected by natural calamities and
human-induced disasters;

24. How can these establishment avail of the exemption?


An employer/establishment will have to apply and submit the
supporting documents required to the Board and must be qualified
with the set of criteria for exemption.

25. What is the procedure in applying for wage exemption?


1. File an application in three (3) legible copies in person or by
registered mail (the date of mailing shall be deemed as the date of
filing);
2. Supporting documents with proper authentication;
3. Proof of Notice to the union President (if unionized) or workers (if
non-unionized), that an application for exemption from compliance
with W.O. Rx 18 has been filed by the Board.

WHERE:
1. RTWPB – X
2. DOLE Regional Offices
3. DOLE Provincial Offices and Satellite Offices

WHEN:
1. Not later than seventy-five (75) days from the publication of the
IRR or on ________________;

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2. In the case of NBE’s, not later than sixty (60) days from the date of
registration.

26. Can any worker file an opposition to the application for exemption of
an establishment?
Yes, any worker or union in the applicant-establishment may file with
RTWPB-X within fifteen (15) days from receipt of the notice of the filing
of the application, an opposition to the application for exemption
stating the reasons why it should not be approved.

27. What is the effect of disapproved application?


The workers of the establishment with a disapproved application shall
be paid the mandated wage increase retroactive to the date of
effectivity of the wage order plus simple interest of one percent (1%)
per month.

28. Can the establishment who had been denied exemption file an
appeal?
Yes, any party aggrieved by the decision of the Board may file an
appeal to the NWPC through the RTWPB, not later than ten (10) days
from date of receipt of the decision based on the following grounds:
a. Non-conformity with the prescribed guidelines and/or procedures
on exemption;
b. Prima facie evidence of grave abuse of discretion on the part of the
RTWPB;
c. Questions of law.

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10 | P r i m e r
on Wage
Order No.
RX-18