Title II-Wages

Chapter I. Preliminary Matters

Chapter II. Minimum Wage Rates

WAGES Chapter III. Payment of Wages

Chapter IV. Prohibition Regarding
Wages

PRELIMINARY MATTERS AGRICULTURE TWO ASPECTS OF AGRICULTURE

“Agriculture” includes farming 1. The primary aspect dairying covers the
Article 97-DEFINITIONS OF TERMS
in all its branches and, among production, cultivation, growing and
EMPLOYER EMPLOYEE other things, includes harvesting of any agricultural and
cultivation and tillage of soil, horticultural commodities, the raising of
“Employee” includes any individual employed
“Employer” includes any dairying, the production, livestock or poultry.
by an employer.
person acting directly or cultivation, growing and 2. The secondary aspect covers any
indirectly in the interest harvesting of any agricultural practices performed by a farmer on a farm
of an employer in relation and horticultural commodities, as an incident to or in conjunction with
to an employee and shall the raising of livestock or such farming operations. (Alcantara.
include the government poultry, and any practices
EMPLOY Reviewer is Labor and Social Legislation)
and all its branches, performed by a farmer on a
subdivisions and farm as an incident to or in
instrumentalities, all conjunction with such farming
government-owned or operations, but does not
controlled corporations include the manufacturing or
and institutions, as well processing of sugar, coconuts,
as non-profit private abaca, tobacco, pineapples or
institutions, or other farm products.
organizations.
“Employ” includes to suffer or permit to work.

WAGE “Wage” paid to any employee shall FACILITIES

mean the remuneration or earnings,
however designated, capable of being
expressed in terms of money, whether
fixed or ascertained on a time, task, The term facilities shall
piece, or commission basis, or other include articles or services
method of calculating the same, which for the benefit of the
is payable by an employer to an employee or his family but
employee under a written or unwritten shall not include tools of the
contract of employment for work done trade or articles or services
or to be done, or for services rendered
primarily for the benefit of
or to be rendered and includes the fair
the employer or necessary
and reasonable value, as determined
by the Secretary of Labor and to the conduct of the
Employment, of board, lodging, or employer’s business
other facilities customarily furnished by (Section 5, Rule VII, Book III,
the employer to the employee. “Fair Implementing Rules and
and reasonable value” shall not include Regulations)
any profit to the employer, or to any
person affiliated with the employer.
THE REQUIREMENT OF DEDUCTING
THE VALUE OF FACILITIES SUPPLEMENT?
1. Proof must be shown that Supplement refer to extra remuneration
such facilities are or benefits received by wage earners
customarily furnished by from their employers.

the trade;
2. The provision of deductible
facilities must be voluntarily
accepted in writing by the
employee;
3. The facilities must be
charged at reasonable value.
(Our Haus Realty Development Supplements constitute remuneration or special
Corporation v. Alexander Parian, et al., privileges received by the employees over and
G.R. No. 204651, August 06, 2014) above their ordinary earnings.

DISTINCTION BETWEEN FACILITIES GUIDE QUESTIONS TO DETERMINE IF

AND SUPPLEMENTS BENEFITS GIVEN IS SUPPLEMENT OR
FACILITIES
SUPPLEMENTS FACILITIES
1. For whose benefit or 2. Are the items furnished part of 3. Are those items furnished
The benefits or privileges The benefits or privileges convenience were the the wage? deductible from the wage?
granted is for the employer’s granted is for the employee’s items furnished?
convenience. convenience.
The value of supplements does Facilities, when furnished by
not form part of and may not the employer, are deductible
be deducted from the from the employee’s wage,
employee’s wage. since if they are not so
furnished, the employee would
spend and pay for them just
the same.
Supplements constitute They are items or expense
remuneration or special necessary for the employee and
privileges received by the his family’s existence and
employees over and above subsistence.
their ordinary earnings.

LEGAL BASIS-NON-APPLICATION OF DOMESTIC WORKER OR KASAMBAHAY

THE TITLE ON WAGES UNDER R.A. 10361 (2013)?
Domestic worker or “Kasambahay”refers to any person
engaged in domestic work within an employment relationship
Article 98. such as, but not limited to, the following: general househelp,
Application of Title. nursemaid or “yaya”, cook, gardener, or laundry person, but
This Title shall not shall exclude any person who performs domestic work only
apply to farm tenancy occasionally or sporadically and not on an occupational
or leasehold, basis.
domestic service and
The term shall not include children who are under foster
persons working in
family arrangement, and are provided access to education
their respective
and given an allowance incidental to education, i.e. “baon”,
homes in needle work
transportation, school projects and school activities.
or in any cottage
industry duly
registered in
accordance with law.
LEGAL BASIS- Minimum Wage Rates MANDATE OF NATIONAL WAGES AND PRODUCTIVITY COMMISSION (NWPC)
and REGIONAL TRIPARTIE WAGES AND PRODUCTIVITY BOARD(RTWPB)
Article 99- The minimum wage rates for
agricultural and non-agricultural employees
The National Wages and Productivity
and workers in each and every region of the
Commission (NWPC) develops policies
country shall be those prescribed by the
and guidelines on wages, incomes, and
Regional Tripartite Wages and Productivity
productivity. It exercises technical and
Boards. (As amended by Section 3, Republic
administrative supervision over the
Act No. 6727, June 9, 1989).
RTWPBs.

Republic Act No. 6727(July 1, 1989), Wage

Rationalization Act of 1989, created the National
RTWPB implement the wages, incomes, and
Wages and Productivity Commission (NWPC) and the
productivity policies and programs in their respective
Regional Tripartite Wages and Productivity Boards
regions.
(RTWPBs).

CITIES COVERED UNDER NCR MINIMUM WAGE RATES FOR DOMESTIC WORKER IN NCR
Caloocan, Las Pinas, Makati, Malabon, Mandaluyong, Manila, Marikina, Muntinlupa,
Paranaque, Pasay, Pasig, Quezon, San Juan, Taguig, Valenzuela, Navotas and
Municipality of Pateros.

DAILY MINIMUM WAGE RATES IN NCR

DAILY MINIMUM WAGE RATES IN

REGION III DAILY MINIMUM WAGE RATES FOR AGRICULTURAL WORKERS IN REGION III
PROVINCES COVERED BY REGION III
Region III covers the Provinces of Aurora, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac,
Zambales and the Cities of Angeles, Balanga, Cabanatuan, Gapan, Malolos, Munoz, Olongapo,
Palayan, San Fernando, San Jose, San Jose del Monte and Tarlac.

DAILY MINIMUM WAGE RATES IN REGION III FOR NON-AGRICULTURAL WORKERS

MINIMUM WAGE RATE FOR DOMESTIC
WHAT IS A CHARTERED CITIES AND MUNICIPALITIES?
WORKERS IN REGION III
Chartered cities and municipalities refer to
those cities whose existence as corporate
and administrative entities is governed by
their own specific charters in addition to the
Local Government Code of 1991, which
specifies their administrative structure and
powers.

Manila was the first chartered city in the

country, and was designated as such by the
Philippine Commission Act No. 183 on July 31,
1901. It became autonomous with the passage
of Republic Act No. 409, "The Revised Charter
of the City of Manila", on June 18, 1949.

In setting the mandatory minimum wage, the

RTWPBs refer to the official data on:
HOW OFTEN CAN THE BOARDS (NWPC and RTWPB)
1. Poverty threshold NSCB (National
ISSUE WAGE ORDER?
Statistics Coordination Board)
2. Prevailing (average) wage rates (Labor
Force Survey)
3. Socio-economic indicators such as CPI
(Consumer Price Index)/Inflation,
employment, GRDP (Gross Regional No new wage order may be issued within a
Domestic Product), among others. period of twelve (12) months from effectivity
of the current wage order. However, if the
REGIONAL GROSS DOMESTIC PRODUCT Board finds urgent and reasonable grounds to
CONSUMER PRICE INDEX issue a new wage order within the 12-month
period, it shall submit a written justification to
Consumer Price Index-This
Gross Regional Domestic Product (GRDP) measures the Commission for its immediate review and
indicates the change in average
the economic performance of a region. It covers the affirmation and if affirmed, the Board may
prices for commonly purchased
value of goods and services produced in the region. initiate the minimum wage setting process.
household goods and services.

WAGE DISTORTION? ILLUSTRATION OF WAGE

DISTORTION
Wage distortion shall mean a WAGES OF THE EMPLOYEES WAGES OF THE EMPLOYEES
BEFORE THE WAGE INCREASE AFTER WAGE INCREASE
situation where an increase in
prescribed wage rates results in the Employee category Total wage Employee category Total wage Wage New wage
elimination or severe contraction of 4th Level Employee Php570.00
increase

intentional quantitative differences

4th Level Employee Php570.00 Php40.00 Php610.00
in wage or salary rates between 3rd Level Employee Php590.00
and among employee groups in an 3rd Level Employee Php590.00 Php590.00
2nd Level Employee Php600.00
establishment as to effectively 2nd Level Employee Php600.00 Php600.00
obliterate the distinctions embodied 1st Level Employee Php610.00
1st Level Employee Php610.00 Php610.00
in such wage structure based on
skills, length of service, or other
logical bases of differentiation.
REMEDY FOR WAGE DISTORTION PROCEDURE TO CORRECT WAGE DISTORTION

The “distortion” in the salary rates of workers should

be re-adjusted or corrected. If it is not corrected, it ORGANIZED ESTABLISHMENT
could lead to demoralization and could disrupt the
harmonious work relationships between and among 1. In organized establishment
workers and employers in the establishments. (those with existing union)
a. Negotiation to correct the
distortion between the
employer and the union
In other words, correction of a wage distortion may b. Any dispute, grievance
procedure of collective
be done by re-establishing a substantial or significant
bargaining agreement.
gap (as distinguished from the historical gap)
c. If unresolved, through
between the wage rates of the differing classes of
voluntary arbitration
employees.
UNORGANIZED ESTABLISHMENT
1. In unorganized establishment
(no existing union)
a. The employer and the
employee will try to correct
the distortion.
b. Any dispute is resolved
through National Conciliation
and Mediation Board (“NCMB”)
If unresolved, NLRC

FORMULA TO ADDRESS WAGE DISTORTION

2. PINEDA-CRUZ FORMULA
1. Pineda Formula

Example= Pineda Formula COMPUTATION

Where:
Previous minimum wage = Php570.00
Present wage of the employee = Php600.00
and 590.00
Mandated wage increase = Php40.00
570/600 x 40 = 38 wage distortion adjustment.
3. PERCENTILE APPROACH
570/590x40=38.64 wage distortion adjustment.

4. PHILIPPINE
CONSTRUCTION
SUPPLY FORMULA

5. BAGTAS APPROACH

5. WIREROPE FORMULA
LEGAL BASIS-PROHIBITION AGAINST ELIMINATION In Eastern Telecommunications
OR DIMINUTION OF BENEFITS In 2010 in Central Azucarera de Tarlac v.
Philippines. Inc. v. Eastern Telecoms
Central Azucarera de Tarlac Labor Union-
Article 100. Nothing in this Book shall be construed Employees Union, 681 Phil. 519, 535
NLU, 639 Phil. 633, 641 (2010), the SC
to eliminate or in any way diminish supplements, or (2012); Tiangco, et al. v. Hon.
ruled, Clearly, the non-diminution rule
other employee benefits being enjoyed at the time of Leonardo. Jr., et al., 207 Phil. 235
(1983), these benefits cannot be applies only if the benefit is based on an
promulgation of this Code. express policy, a written contract, or has
reduced, diminished, discontinued or
eliminated consistent with the ripened into a practice.
In University of the East v. University of the East
constitutional mandate in Art. II, Sec.
Employees' Association, 673 Phil. 273, 286 (2011),
18 and Art. XIII. Sec. 3 1987
the court ruled, Generally, employees have a vested
Constitution to protect the rights of
right over existing benefits that the employer In this case, Rollette's claim that the car plan was
workers and promote their welfare.
voluntarily granted them. part of her hiring package was unsubstantiated.
Admittedly, Home Credit has no existing car plan at
In Arco Metal Products, Co., Inc. v. Samahan ng the time Rollette was hired. Rollette's employment
mga Manggagawa sa Arco Metal-NAFLU (SAMARM- contract does not even contain any express provision
NAFLU, et al.), 577 Phil. 1 (2008), the principle of on her entitlement to a service vehicle at full
non-diminution of benefits is founded on the company cost.
constitutional mandate to "protect the rights of
workers and promote their welfare" and "to afford
labor full protection."

The ruling in Central Azucarera was reiterated in PAYMENT BY RESULT

2020 in Home Credit Mutual Building and Loan
Association, G.R. No. 200010, August 27, 2020. LEGAL BASIS – PAYMENT BY WHO AREWORKERS PAID BY RESULT?
RESULT
Art. 101. Payment by results.
The SC ruled, employer-employee relationship is The court ruled, Article 100 refers The Secretary of Labor and Workers paid by results are those whose pay is
contractual and is based on the express terms of the solely to the non-diminution of benefits Employment shall regulate the calculated in terms of the quantity or quality of
employment contract as well as on its implied terms, enjoyed at the time of the promulgation payment of wages by results, their work output.
among them, those not expressly agreed upon but of the Labor Code. including pakyao, piecework,
which the employer has freely, voluntarily and and other non-time work, in
consistently extended to its employees. Under the Employees paid by results includes pakyao,
order to ensure the payment of
principle of mutuality of contracts embodied in piecework and other non-time work. They are
fair and reasonable wage
Article 1308 of the Civil Code, the terms of a contract those personnel who are engaged on task basis,
rates, preferably through time
- both express and implied - cannot be withdrawn purely commission basis, or those who are paid a
and motion studies or in
except by mutual consent or agreement of the fixed amount for performing work irrespective of
consultation with
contracting parties. the time consumed in the performance thereof.
representatives of workers’
and employers’ organizations.

WORKERS PAID BY RESULT CAN BE GROUPED INTO TASK WORK DISTINGUISH FROM PIECE WORK
TWO CATEGORY:

TASK WORK PIECE WORK

In Best Wear Garments v. De Lemos and
Ocubillo,G.R. No. 191281(2012)], workers paid by Emphasis is on the task itself Emphasis is place on the unit of work produced,
results may be grouped into two: or the quantity thereof
1) Those whose time and performance is supervised
by the employer, and; Those workers who are
2) Those whose time and performance is unsupervised are excluded
from receiving benefits such Payment is not reckoned in terms of numbers of A uniform amount is paid per unit accomplished
unsupervised by the employer.
as nightime pay, holiday pay, unit produced, but in terms of completion of
service incentive leave, and the work
others, provided their time
and performance is
unsupervised by the employer
[Labor Congress of the
Philippines v.NLRC, G.R. No.
123938 (1998)].
 This was the SC decision in Ramiro Lim & Sons
Agricultural Company et al., vs. Ramiro Lim et al.,
G.R. No. 221967. February 06, 2019, citing Pulp
and Paper, Inc. v. NLRC, 344 Phil. 821 (1997),
where the court held,
Article 101 of the Labor Code provides that
All workers paid by result, including "the Secretary of Labor shall regulate the
those who are paid on piecework, takay, payment of wages by results,
pakyao or task basis, shall receive not including pakya[w], piecework and other non-
less than the prescribed wage rates per time work." The same statutory provision also
eight (8) hours of work a day, or a
states that the wage rates should be based,
proportion thereof for working less than
preferably, on time and motion studies, or
eight (8) hours.
those arrived at in consultation with
representatives of workers' and employers'
organizations. In the absence of such
prescribed wage rates for piece-rate workers,
the ordinary minimum wage rates prescribed
by the Regional Tripartite Wages and
Productivity Boards should apply.
LEGAL TENDER
Legal tender, it is money that, if
tendered by a debtor in payment of
his monetary obligation, may not IS CHECK A LEGAL TENDER?
be refused by the creditor.
In Bank of Philippine Islands v. Royeca , G.R. No.
176664, July 21, 2008, 559 SCRA 207, 217-219, the
Court held:
Settled is the rule that payment must be made in legal
tender. A check is not legal tender and, therefore,
cannot constitute a valid tender of payment..
TIME OF PAYMENT
LEGAL BASIS-TIME OF PAYMENT
The payment of wages of
employees engaged to perform
Article 103. Time of payment. Wages a task which cannot be
shall be paid at least once every two completed in two (2) weeks
(2) weeks or twice a month at intervals shall be subject to the following
not exceeding sixteen (16) days. If on conditions, in the absence of a
account of force majeure or collective bargaining
circumstances beyond the employer’s
agreement or arbitration award:
control, payment of wages on or
1. That payments are made at
within the time herein provided cannot
intervals not exceeding
be made, the employer shall pay the
sixteen (16) days, in
wages immediately after such force
proportion to the amount of
majeure or circumstances have
work completed;
ceased. No employer shall make
2. That final settlement is made
payment with less frequency than
upon completion of the
once a month.
work.
CHAPTER III. PAYMENT OF WAGES
FORMS OF PAYMENT
LEGAL BASIS-FORMS OF PAYMENT
Article 102. Forms of payment. No employer
shall pay the wages of an employee by means
of promissory notes, vouchers, coupons,
Payment of wages by check or money order
tokens, tickets, chits, or any object other than
shall be allowed when such manner of
legal tender, even when expressly requested
payment is customary on the date of
by the employee.
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.
DOES DELIVERY OF CHECK CONSTITUTE PAYMENT?
In Philippine Airlines, Inc.
In Bank of Philippine Islands v. v. Court of Appeals, G.R.
Royeca , G.R. No. 176664, July 21, No. 49188, January 30,
2008, 559 SCRA 207, 217-219, the 1990, 181 SCRA 557, 568,
Court held: the Court ruled, No. the
Since a negotiable instrument is delivery of a check does
only a substitute for money and not operate as payment
not money, the delivery of such an and does not discharge
instrument does not, by itself, the obligation under
operate as payment. Mere delivery judgment. The delivery of
of checks does not discharge the a bill of exchange ONLY
obligation under a judgment. The PRODUCES THE FACT OF
obligation is not extinguished and PAYMENT WHEN THE
remains suspended until the BILL HAS BEEN
payment by commercial document ENCASHED.
is actually realized.
PLACE OF PAYMENT LEGAL BASIS-PLACE OF PAYMENT
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.
OBJECTIVE OF LABOR ADVISORY NO.
26
1. To encourage and enable private 3. To reduce the cost and risk of physical
establishment to timely pay wages cash
and other monetary benefits through disbursement, and;
transaction accounts;
4. To promote digital payments as safer
alternative to the physical exchange of
2. To afford their employees access to
bills
formal financial services
and coins.
WORKERS PREFERENCE IN CASE OF
BANKRUPTCY
LEGAL BASIS- WORKERS PREFERENCE IN CASE OF
BANKRUPTCY
In 1989, Article 110 was
Art. 110. Worker preference in case of bankruptcy. In amended by R.A. 6715 which
the event of bankruptcy or liquidation of an included other monetary
employer’s business, his workers shall enjoy first claims to workers
preference as regards their wages and other preferential right. The
monetary claims, any provisions of law to the preferential right should be
contrary notwithstanding. Such unpaid wages and given only prospective effect
monetary claims shall be paid in full before claims of in line with the cardinal rule
the government and other creditors may be paid. (As that laws shall have no
amended by Section 1, Republic Act No. 6715, March retroactive effect, unless the
21, 1989) The preferential right of workers and contrary is provided (Article
employees under Article 110 of the 4, Civil Code).
Labor Code may be invoked only in
case of insolvency or liquidation.

CHAPTER IV-PROHIBITION REGARDING WAGES OCCUPATION WHERE PRACTICE OF MAKING DEDUCTIONS

WAGE DEDUCTIONS OR REQUIRE DEPOSITS WAS RECOGNIZED

LEGAL BASIS- WAGE DEDUCTIONS

It is only in private security
Article 113. Wage deduction. No employer, agency where the practice of
in his own behalf or in behalf of any person, cash deposit to answer for
shall make any deduction from the wages of loss or damage of tools,
his employees, except: materials, or equipment
supplied by the employers is
a. In cases where the worker is insured with b. For union dues, in cases where the right of only recognized and allowed.
his consent by the employer, and the the worker or his union to check-off has been In the event that a private
deduction is to recompense the employer recognized by the employer or authorized in security agency requires a
for the amount paid by him as premium on writing by the individual worker concerned, cash deposit from its
the insurance; and; employees, the maximum
amount shall not exceed the
c. In cases where the employer is authorized
employee’s one month basic
by law or regulations issued by the Secretary
salary.” (DOLE Advisory No.
of Labor and Employment.
11, Series of 2014)

RETALIATORY MEASURES
PROPOSED BILL
WHISTLEBLOWER ACT OF 2008
LEGAL BASIS-RETALIATORY MEASURES

The penalty is a fined of not

Article 118. Retaliatory measures. It shall be unlawful
more than One Hundred
for an employer to refuse to pay or reduce the wages
Thousand Pesos (PIOO, 000.00)
and benefits, discharge or in any manner
or suffer imprisonment of not
discriminate against any employee who has filed any
less than six (6) months but not
complaint or instituted any proceeding under this
more than six (6) years or both
Title or has testified or is about to testify in such
at the discretion of a court, and
proceedings.
shall also suffer the penalty of
perpetual disqualification from
holding public office in case of
a public officer or employee.
1 WAGE ORDER/JURISDICTION OF RTWPB
Metropolitan Bank and Trust Company vs. NWPC and RTWPB-Region-II, G.R. No. 144322, February 6, 2007

2 WAGES
MARILYN B. ASENTISTA, PETITIONER, VS. JUPP & COMPANY, INC., AND/OR MR. JOSEPH V. ASCUTIA, RESPONDENTS. G.R. No. 229404. January 24, 2018

3 FACILITIES AND SUPPLEMENTS

Our Haus Realty Development Corporation v. Alexander Parian, et al. (G.R. No. 204651, August 06, 2014

4 PAID BY RESULT
ARIEL L. DAVID v. JOHN G. MACASIO, GR No. 195466, July 2, 2014

5 DEDUCTIONS FROM WAGES

MARBY FOOD VENTURES CORPORATION, et aal., VS. ROLAND DELA CRUZ, et al., G.R. No. 244629, July 28, 2020

6 PROHIBITION AGAINST ELIMINATION OF DIMINUTION OF BENEFITS

1. HOME CREDIT MUTUAL BUILDING AND LOAN ASSOCIATION AND/OR RONNIE B. ALCANTARA, PETITIONERS, VS. MA. ROLLETTE G. PRUDENTE, RESPONDENT. G.R. No. 200010, August 27, 2020

7 RETALIATORY MEASURE AGAINST EMPLOYEE

Norman Panaligan et al., vs. Phyvita Enterprises Corporation, G.R. No. 202086, June 21, 2017