FACILITIES FACILITIES — include articles or services for the benefit of the employee or his family but exclude tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the employer’s business. (our Haus Realty Development Corporation vs. Parian, G.R. No. 204651, August 6, 2014, 732 SCRA 351, Brion, J.) Facilities form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same. (SLL International Cables Specialist vs. National Labor Relations Commission, G.R. No. 172161, March 2, 2011, 644 SCRA 411, Mendoza, J.)Items that are included in the term “facilities” (1) Meals; (2) Housing and dwelling; (3) Fuel’ including electricity, water, gas furnished for the non- commercial personal use of the employee; (4) Transportation furnished to the employee between his home and work where the travel time does not constitute hours worked compensable under the Labor Code and other laws; &(5) School, recreation and sanitation when operated exclusively for the benefit of the worker or his family; (6) Medical and dental services rendered to the non-industrial cases; and > (7) Other articles and services given primarily for the benefit of the worker or his family. (section 4 {e}, Rule |, Department Order No. 126-13, Series of 2013)Requisites for the value of the facilities to be deducted from the employee’s wage (a) Proof must be shown that such facilities are customarily furnished by the trade; » (b) The provision of deductible facilities must be voluntarily accepted in writing by the employee; and (c) The facilities must be charged at fair and reasonable value. (our Haus Realty Development Corporation vs. Parian, G.R. No. 204651, August 6, 2014, 732 SCRA 351, Brion, J.)Question: May a construction company deduct from the salary of the employees the value of the board and lodging/barracks? Answer: No. DOLE DO No. 56, Series of 2005 mandates that the cost of the implementation of the requirements for the construction safety and, health of workers, shall be integrated to the overall project cost. It is part of the project cost that was already charge to their clients. (our Haus Realty Development Corporation vs. Parian, G.R. No. 204651, August 6, 2014, 732 SCRA 351, Brion, J.)SUBSIDIZED MEALS & 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, provided further that such deduction is with the written authorization of the employees concerned. (sec. 4 Rule VII-A, Book Ill of the Rules Implementing the Labor Code) 7SUPPLEMENTS SUPPLEMENT — the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage. (SLL International Cables Specialist vs. National Labor Relations Commission, G.R. No. 172161, March 2, 2011, 644 SCRA 411, Mendoza, J.)THE ITEMS THAT ARE INCLUDED IN THE TERM “SUPPLEMENT” (1) Emergency medical and dental services furnished by the employer by virtue of the requirement of the Labor Code; (2) Cost, rental and/ or laundry of uniform where the nature of the business requires the employees to wear a uniform; (3) Transportation charges where such transportation is in incident to or necessary to the employment; (4) Shares of capital stock of the employee in an employer’s company; (5) Paid vacation, sick and maternity leave; and (6) Tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the employer’s business. (section 4 {i}, Rule |, Department Order No. 126-13, Series of 2013)THE RULE ON SUPPLEMENTS The law also prescribes that the computation of wages shall exclude whatever benefits, supplements or allowances given to employees. Supplements are paid to employees on top of their basic pay and are free of charge. Since it does not form part of the wage, a supplement’s value may not be included in the determination of whether an employer complied with the prescribed minimum wage rates. (Our Haus Realty Development Corporation vs. Parian, G.R. No. 204651, August 6, 2014, 732 SCRA 351, Brion, J.)FACILITIES VS. SUPPLEMENTS The real difference lies not on the kind of the benefit but on the purpose why it was given by the employer. If it is primarily for the employee’s gain, then the benefit is a facility; if its provision is mainly for the employer’s advantage, then it is a supplement. (our Haus Realty Development Corporation vs. Parian, G.R. No. 204651, August 6, 2014, 732 SCRA 351, Brion, J.) The value of a facility is deemed part of the employee’s wage, while the value of a supplement is not.Question: May a construction company deduct the value of subsidized meals and snacks from the salaries of its employees? Answer: No. Under the purpose test, the subsidized meals and free lodging provided by the employer are actually supplements. Although they also work to benefit the respondent-employees, an analysis of the mature of these benefits in relation to the employer’s business shows that they were given primarily for the employer’s greater convenience and advantage. Being a supplement, the same cannot be considered as part of the employees’ wage. (our Haus Realty Development Corporation vs. Parian, G.R. No. 204651, August 6, 2014, 732 SCRA 351, Brion, 1.)REASON: The employer is engaged in the construction business, a labor-intensive enterprise. The success of its projects is largely a function of the physical strength, vitality and efficiency of its laborers. Its business will be jeopardized if its workers are weak, sickly, and lack the required energy to perform strenuous physical activities. Thus, by ensuring that the workers are adequately and well fed, the employer is actually investing on its business. Unlike in office enterprises where the work is focused on desk jobs, the construction industry relies heavily and directly on strenuous physical activities. id.2018 Bar Question: Nelda worked as a chambermaid in Hotel Neverland with a basic wage of PhP560.00 for an eight-hour workday. On Good Friday, she worked for one (1) hour from 10:00 PM to 11:00 PM. Her employer paid her only PhP480.00 for each 8-hour workday, and PhP70.00 for the work done on Good Friday. She sued for underpayment of wages and non-payment of holiday pay and night shift differential pay for working on a Good Friday. Hotel Neverland denied the alleged underpayment, arguing that based on long- standing unwritten tradition, food and lodging costs were partially shouldered by the employer and partially paid for by the employee through salary deduction. According to the employer, such valid deduction caused the payment of Nelda's wage to be below the prescribed minimum. The hotel also claimed that she was not entitled to holiday pay and night shift differential pay becaus@ hotel workers have to work on holidays and may be assigned to work at night. (a) Does the hotel have valid legal grounds to deduct food and lodging costs from Nelda's basic salary? (2.5%)Suggested answer: (a) The hotel has no valid legal grounds to deduct food and lodging cost since it failed to substantiate the following requirements: (a) Proof must be shown that such facilities are customarily furnished by the trade; (b) The provision of deductible facilities must be voluntarily accepted in writing by the employee; and (c) The facilities must be charged at fair and reasonable value. (ou? Haus Realty Development Corporation vs. Parian, G.R. No. 204651, August 6, 2014, 732 SCRA 351, Brion, J.) = a(b) Applying labor standards law, how much should Nelda be paid for work done on Good Friday? Show the computation in your test booklet and encircle your final answer. (2.5%) Suggested answer: (b) Nelda is entitled to an additional pay for her one-hour_work on Good Friday which must be 200% of her P70.00 regular hourly rate. Likewise, a 10% for the one-hour work done, representing night shift differential, shall be also be added. Hence, Nelda should be paid the total amount of P154.00 for the work done on Good Friday. (P70.00 x 200% x 1.1 = P154.00) ——— =PAYMENT OF WAGES 2015 Bar Question: Benito is the owner of an eponymous clothing brand that is a top seller. He employs a number of male and female models who wear Benito's clothes in promotional shoots and videos. His deal with the models is that Benito will pay them with 3 sets of free clothes per week. Is this arrangement allowed?Suggested Answer: No, the arrangement is not allowed. Under the law, “no employer shall pay the wages of an employee by means of promissory notes, vouchers, coupons, tokens, tickets, chits, or any object other than legal tender, even when expressly requested by the employee”. (Article 102, Labor Code)Question: The employer paid the salary of Jose Cruz by means of a check. The latter refused the payment. Was the refusal of Jose Cruz valid? Suggested answer: Yes, the refusal of Jose Cruz was valid. Under the law, wages shall be paid in legal tender and the use of tokens, promissory notes, vouchers, coupons, or any other form alleged to represent legal tender is absolutely prohibited even when expressly requested by the employee. (section), Rule Vill of the Omnibus Rule Implementing Book Ill of the Labor Code) “National BankWhen payment of checks, postal checks or money orders is allowed All of the following conditions are must be present: (a) There is a bank or other facility for encashment within a radius of one (1) kilometer from the workplace; (b) The employer or any of his agents or representatives does not receive any pecuniary benefit directly or indirectly from the arrangement; (c) The employees are given reasonable time during banking hours to withdraw their wages from the bank which time shall be considered as compensable hours worked if done duriag working hours; and (d) The payment by check is with the written consent of the employees concerned if there is no collective agreement authorizing the payment of wages by bank checks. (Section 2, Rule Vill of the Omnibus Rule Implementing Book III of the Labor Code)Question: The petitioner (employer) is paying his employees only P1.00 per tuna movement. There are three (3) movements from the time the tuna is unloaded from the fishing boat to the fish car then to the cold storage; and, finally from the cold storage to the vessel. In addition to the amount of P1.00 per ‘bariles’ per movement herein complainants get the intestines and liver of the tuna as part of their salary. The petitioner insists that the cash value of the tuna liver and intestines must form part of the employees’ wages. Was the argument of the employer meritorious? _Answer: No, the employer's argument was not meritorious. The employer's practice of paying the minimum wage by means of legal tender combined with tuna liver and intestines is a clear violation of the law. Wages shall be paid only by means of legal tender. Even when the same was expressly requested by the employee, such payment of tuna liver and intestine to the latter does not shield petitioner for non-compliance with the minimum wage law. (Congson vs. National Labor Relations Commission, G.R. No. 114250, April 5, 1995, 243 SCRA 260, Padilla, J.)