GUIDE QUESTIONS:

1. What is the definition of “wages”?

According to Article 97 (f) of the Labor Code, f) “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.

Many employees rely on their wages for their sustenance. Written – e.g. brgy. Tanod, janitor, security
guard, OFW. However, Unwritten – house maid, kargador, gasoline boy

SALARY – paid a fixed amount or transferred to the employees at regular intervals for their
performance at the end of the month. (Teachers, Engineers, Doctors, Lawyers, Accountants, and etc.)

WAGE – earner is paid by hour or daily-based payment given to the labor for the amount off work
finished in a day. (Laborer, Security guard, Janitor, construction worker, machine operator, truck driver, and
etc.)

Synonymous in meaning and usage with "salary" and "pay". "Commission" may or may not be treated
as part of wage depending on the circumstances.

Basis:

Actual work is the basis of claim for wages ("No work, no pay").

Attributes:

a) it is the remuneration or earnings, however designated, for work done or to be done or for services
rendered or to be rendered;
b) it is 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;
c) it 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
d) it 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.

2. What are facilities?

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 services primarily for the benefit of the employer or necessary to the conduct
of the employer’s business.

Value of facilities - the fair and reasonable value of board, lodging and other facilities customarily
furnished by an employer to his employees both in agricultural and non-agricultural enterprises.

The term shall include:

1. Meals;
2. Housing for dwelling purposes;
 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.

Are facilities automatically deductible from the employee’s wage? No. The Supreme Court
ruled in the case of Mabeza vs. NLRC (G. R. No. 1188506, April 18, 1997) that the employer cannot simply
deduct the value of facilities from the employee’s wages. The requirements before deducting said value of
facilities are the following:

Before the value of facilities can be deducted from the employees’ wages, the following requisites
must all be attendant:

1. There must be a proof that such facilities are customarily furnished by the trade;
2. The provision of deductible facilities must be voluntarily accepted in writing (this would prove
that the employer was authorized by the employee to make said deduction) by the employee;
and
3. Facilities must be charged at fair and reasonable value.

3. What are supplements?

Supplements means extra remuneration or special privileges or benefits given to or received by the
laborers over and above their ordinary earnings or wages.

It cannot be deducted

It shall include:

1. Emergency medical and dental services furnished by employer by virtue of the requirement of the
Labor Code, as amended and its Implementing Rules and Regulations;
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 leaves; 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,

The benefit or privilege given to the employee which constitutes an extra remuneration above and over
his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part of the
laborers’ basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item (food,
lodging, bonus or sick leave) given, but in the purpose for which it is given.

4. How should wages be paid?

ARTICLE 102. Forms of payment. No employer shall pay the wages of an employee by means of
promissory notes, vouchers, (gift check) coupons, tokens, tickets, chits, or any object other than legal
tender, even when expressly requested by the employee.

Payment of wages by check or money order shall be allowed when such manner of payment is customary
on the date of effectivity of this Code or is necessary because of special circumstances as specified in
appropriate regulations to be issued by the Secretary of Labor and Employment or as stipulated in a
collective bargaining agreement.

Can we give a gift check as a form of wage to an employee? No. Because a gift check can be classified
as coupons, and it was stated in the labor code that a coupons is not a form of payment.

Do you think it is reliable or valid to give a check as a form of wage to an employee? Yes. for safer
purposes against holdaper or snatcher, but make sure not to sign at the back of it as owner such check,
you can do the signing if you are inside the bank to convert it into cash.

And under labor law, the employee should be paid in the form of check or money.

Check – it is a paycheck with effectivity date, signature, code number etc. which sometimes issued in the
bank and or in the form of money or cash.

Payment of wages due to an employee by means of tokens or objects other than the legal tender currency
is even considered by law as a form of coercion, which is a criminal offense punishable by imprisonment of
1 month and 1 day to 6 months, and/or a fine of P200 to P500 under the Revised Penal Code.

5. When and where should wage be paid?

ARTICLE 103. Time of payment. Wages shall be paid at least once every two (2) weeks or twice a month
at intervals not exceeding sixteen (16) days. If on account of force majeure or circumstances beyond the
employer’s control, payment of wages on or within the time herein provided cannot be made, the employer
shall pay the wages immediately after such force majeure or circumstances have ceased. No employer
shall make payment with less frequency than once a month.

The payment of wages of employees engaged to perform a task which cannot be completed in two (2)
weeks shall be subject to the following conditions, in the absence of a collective bargaining agreement or
arbitration award:

a) That payments are made at intervals not exceeding sixteen (16) days, in proportion to the amount of
work completed;
b) That final settlement is made upon completion of the work.

ARTICLE 104. Place of payment. Payment of wages shall be made at or near the place of undertaking,
except as otherwise provided by such regulations as the Secretary of Labor and Employment may
prescribe under conditions to ensure greater protection of wages.

Payment of wages shall be made at or near the place of undertaking – in the company

Secretary of Labor and Employment may prescribe under conditions to ensure greater protection of wages
– like a card to greater protection (yung atm card)

ARTICLE 105. Direct payment of wages. Wages shall be paid directly to the workers to whom they are
due, except:

a) In cases of force majeure rendering such payment impossible or under other special circumstances
to be determined by the Secretary of Labor and Employment in appropriate regulations, in which
case, the worker may be paid through another person under written authority given by the worker
for the purpose; or

Kapag hindi makukuha ng mismong employee yung sahod because of unexpected circumstances (e.g.
naka-confine sa hospital), pwedeng ipakuha or kumuha ang katrabaho pero may written consent, written
authority, or authorization letter na i-pe-present sa employer or kung sino man ang nagpapasahod.

b) Where the worker has died, in which case, the employer may pay the wages of the deceased
worker to the heirs of the latter without the necessity of intestate proceedings. The claimants, if they
 are all of age, shall execute an affidavit attesting to their relationship to the deceased and the fact
that they are his heirs, to the exclusion of all other persons. If any of the heirs is a minor, the
affidavit shall be executed on his behalf by his natural guardian or next-of-kin. The affidavit shall be
presented to the employer who shall make payment through the Secretary of Labor and
Employment or his representative. The representative of the Secretary of Labor and Employment
shall act as referee in dividing the amount paid among the heirs. The payment of wages under this
Article shall absolve the employer of any further liability with respect to the amount paid.

Kapag na namatay ang employee, any member of the family can claim the wages.

In majority age: (18 y/o and above) shall execute affidavit attesting to their relationship to the
deceased

If minor: the affidavit shall be executed on his behalf (para mag-represent sa kanya) by his natural
guardian or next-of-kin (next na may relasyon sa kanya like tito, tita, lolo, or lola)

6. What are the prohibitions regarding the payment of wages?

ARTICLE 112. Non-interference in disposal of wages. No employer shall limit or otherwise interfere with
the freedom of any employee to dispose of his wages. He shall not in any manner force, compel, or oblige
his employees to purchase merchandise, commodities or other property from any other person, or
otherwise make use of any store or services of such employer or any other person.

In other words, the law does not allow an employer to control, whether directly or indirectly, the
employee’s use of his money. He earned it by working and, having earned it, he has the freedom to spend
it the way he wants, or not to spend it at all [Azucena, Everyone’s Labor Code, 2015, p. 104].

In fact, any employer who shall force or compel, or shall knowingly permit any of his employees to
be force or compelled to purchase merchandise or commodities of any kind shall be criminally liable for
coercion [Art. 288, Revised Penal Code]. It also carries the penalty of imprisonment of 1 month and 1 day
to 6 months, and/or a fine of P200 to P500.

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

(E.G. meron silang membership fee, kapag umabot na sa due at di pa nakakapagbayad,

magkakaroon na ng deduction sa kanyang wage dahil doon na kukunin ni employer ang bayad ni
employee)

c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor
and Employment.

(SSS, PhilHealth and Pag-IBIG contributions/premiums)

ARTICLE 114. Deposits for loss or damage. No employer shall require his worker to make deposits from
which deductions shall be made for the reimbursement of loss of or damage to tools, materials, or
equipment supplied by the employer, except when the employer is engaged in such trades, occupations or
business where the practice of making deductions or requiring deposits is a recognized one, or is
necessary or desirable as determined by the Secretary of Labor and Employment in appropriate rules and
regulations.
 Article 114 of the Labor Code also allows deductions on employee’s wages in case of loss or
damages to tools, materials or equipment supplied by the employer to the employee where the employer is
engaged in trade, occupation or business where practice of making deductions or requiring deposits is
recognized.

ARTICLE 115. Limitations. No deduction from the deposits of an employee for the actual amount of the
loss or damage shall be made unless the employee has been heard thereon, and his responsibility has
been clearly shown.

Walang deduction mula sa mga deposito ng isang empleyado doon sa aktwal na halaga ng
pagkawala o pinsala na magagawa, maliban kung ang empleyado ay narinig doon, at ang kanyang
responsibilidad ay malinaw na ipinakita.

Once that situation is occurred on a particular worker, and after the due process of observing and
hearing his side, he was held liable for the deduction of that loss or damage. (equipment etc)

ARTICLE 116. Withholding of wages and kickbacks prohibited. It shall be unlawful for any person,
directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part
of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s
consent.

The earned wages must be paid on time and in full. The employer cannot withhold or refuse to pay
the wages simply because the employee has not yet submitted a required report or has violated certain
company rules. The inefficiency or the violation can be acted upon in some lawful way, but not by
withholding of wages [Azucena, supra, p. 106].

Considering that the employer cannot simply do whatever he willed over the payment of his employees’
wages, it is therefore imperative for them to know the dos and don’ts to ensure that the enterprise is in line
with the best practices in the field of human resources.

ARTICLE 117. Deduction to ensure employment. It shall be unlawful to make any deduction from the
wages of any employee for the benefit of the employer or his representative or intermediary as
consideration of a promise of employment or retention in employment.

E.G. ako po ay employee and si Nicolai po ang employer ko, sinabi sakin ni Nicolai na magddeduct
daw sya sa sahod ko as consideration of a promise of employment or retention in employment ko.

ARTICLE 118. Retaliatory measures. It shall be unlawful for an employer to refuse to pay or reduce the
wages and benefits, discharge or in any manner discriminate against any employee who has filed any
complaint or instituted any proceeding under this Title or has testified or is about to testify in such
proceedings.

Hindi pwedeng gawin ng isang employer as a revenge na bawasan, tanggalin o discriminate ang
isang empleyado, nang dahil lang ang empleyado ay nag-file ng reklamo laban sa kompanya or may legal
proceeding laban sa employer or kailangan maging testigo (worker) sa isang legal proceeding.

ARTICLE 119. False reporting. It shall be unlawful for any person to make any statement, report, or
record filed or kept pursuant to the provisions of this Code knowing such statement, report or record to be
false in any material respect.

7. What is the principle of non-diminution of benefits?

ARTICLE 100. Prohibition against elimination or diminution of benefits. Nothing in this Book shall be
construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the
time of promulgation of this Code.
 The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers
from eliminating or reducing the benefits received by their employees. This rule, however, applies only of
the benefit is based on an express policy, a written contract, or has ripened into a practice.

The principle of non-diminution of benefits is actually founded on the Constitutional mandate to

protect the rights of workers, to promote their welfare, and to afford them full protection. In turn, said
mandate is the basis of Article 4 of the Labor Code which states that “all doubts in the implementation and
interpretation of this Code, including its implementing rules and regulations, shall be rendered in favor of
labor.

Jurisprudence, however, has expanded the scope of Article 100. In a long line of cases, the
Supreme Court has liberally interpreted said article to be a general prohibition on employers against the
elimination of employee supplements and benefits. The essence of the rule, as developed by the
Supreme Court, is that when the grant to employees of certain benefits has evolved into company
practice, said benefits cannot unilaterally be withdrawn or reduced by the employer. The employees
have a vested and demandable right over them

To be considered as a company practice which cannot subsequently be withdrawn by the employer, the
grant of the benefit must be shown to have been:

a) Practiced over a long period of time

b) Done consistently and deliberately; and
c) Not a product of erroneous interpretation or construction of a doubtful or difficult question of law