Wages

No work no pay principle

If there is no work performed by the employee there can be no wage or pay unless the laborer was able, willing and ready to work but was prevented by management or was illegally locked out, suspended or dismissed (PAL v. NLRC) Where the failure of workers to work was not due to the employers fault, the burden of economic loss suffered by the employees should not be shifted to the employer.

Coverage/Exclusions of the Rule on Minimum Wage Article 98. Application of Title.This Title shall not apply to farm tenancy or leasehold, domestic service and persons working in their respective homes in needlework or in any cottage industry duly registered in accordance with law. Exceptions under the Implementing Rules and Regulations: Household or domestic helpers, including family drivers and persons in the personal service of another Homeworkers engaged in needlework Workers employed in any establishment duly registered with the National Cottage industries and Development Authority in accordance with RA 3470 provided that such workers perform the work in their respective homes; Workers in any duly registered cooperative when so recommended by the Bureau of Cooperative Development and upon approval of the SOLE Barangay Micro Business Enterprise 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 situated, shall not be more than Three Million Pesos (P3,000,000.00). Retail/service establishment regularly employing not more than 10 workers (RA 6727)

Facilities vs Supplements Facilities shall include articles or services for the benefit of the employee or his employee but shall not include tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employers business (IRR) SUPPLEMENTS constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. FACILITIES are items of expense necessary for the laborers and his familys existence and subsistence so that by express provision of law, they 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. (Atok-Big Wedge Assn. vs Atok-Big Wedge Co.) The distinction between a facility and a supplement is in the purpose, not the kind of the item. The benefit or privilege given to the employee which constitutes an extra remuneration over and above 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. Facilities are wage deductible, supplements are not. IRR states that for meals and snacks, employer ay deduct from the wages not more than 70% of the value of the meals and snacks enjoyed by the employees, provided that such deduction is authorized in writing by the employees. The remaining 30% has to be subsidized by the employer For lodging facility, its fair and reasonable value is determined to be the cost of operation and maintenance, including adequate depreciation plus reasonable allowance (but not more than 5 1/2% interest on the depreciated amount of capital invested by the employer. For the facilities to be deductible, proof mmust be shown that it is customarily furnished, must be voluntary accepted in writing by the employee, must be charged at a fair and reasonable value.

Wages vs SalariesArt. 97 Wage 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.

WAGE Applies to the compensation for manual labor, skilled or unskilled, paid at stated times, and measured by the day, week, month, or season. Indicates inconsiderable pay for a lower and less responsible character of employment. SALARY Denotes a higher degree of employment or a superior grade of services, and implies a position or office. Suggestive of a larger and more permanent or fixed compensation for more important service. By some of the authorities, the word wages in its ordinary acceptance, has a less extensive meaning than the word salary, wages being ordinarily restricted to sums paid to artisans, mechanics, laborers, and other employees of like class, as distinguished from the compensation of clerks, officers of public corporations, and public offices. In many situations, however, the words wages and salary are SYNONYMOUS. *35 Am. Jur. Sec. 63, p. 496-497]

Art. 102. Forms of payment. 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. 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. Art. 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 employers 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: That payments are made at intervals not exceeding sixteen (16) days, in proportion to the amount of work completed; That final settlement is made upon completion of the work. Art. 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. Art. 105. Direct payment of wages. Wages shall be paid directly to the workers to whom they are due, except: 1. 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 2. 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. 3. 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.

Wage DistortionART. 124. Standards/Criteria for minimum wage fixing.xxx As used herein, a Wage Distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. xxx ELEMENTS OF WAGE DISTORTION 4. An existing hierarchy of positions with corresponding salary rates. 5. A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one. 6. Elimination of the distinction between the two levels. 7. Existence of the distortion in the same region of the country. POSSIBLE CAUSES OF WAGE DISTORTION: 1. Government decreed increase through wage orders. 2. Merger of establishments [confusion or elimination of the status of the employee3. Increase granted by the employers 4. Passage of RA 6727 or the Wage Rationalization Act Non-diminution of BenefitsArt. 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.

For the rule against diminution of supplements or benefits may apply, it must be shown that 1) the grant of the benefit is founded on a policy or has ripened into a practice over a long period; 2) the practice is consistent and deliberate; 3) the practice is not due to error in the construction or application of a doubtful or difficult question of law ; and 4) the diminution or discontinuance is done unilaterally by the employer. Exceptions: Correction of error Negotiated benefits product of bilateral contract In Hotel Employees Union-NFL vs. Waterfront Insular Hotel Davao, the court upheld the validity of the agreement concluded by the employees and the employer to save the latter from total closure because of losses. The employees union proposed to the management not only to to suspend for ten years their CBA but also to waive some benefits and privileges granted under the CBA. It was a self-sacrificing act suggested by the employees themselves to save the business and save their jobs. Some co-employees questioned the legality of the memorandum of agreement between the management and the union as illegal diminution of benefits. The Supreme Court, finding that the majority of the employees ratified the MOA, upheld its legality Wage order compliance - Benefits or reimbursement basis Reclassification of position Contingent benefits or conditional bonuses Productivity incentives

Workers Preference in case of BankruptcyArticle 110. Worker preference in case of bankruptcy. In the event of bankruptcy or liquidation of an employers business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid. a declaration of bankruptcy or a judicial liquidation must be present before the workers preference may be enforced. Not a lien but a preference. A preference applies only to claims which do not attach to specific properties. A lien creates a charge on a particular property. The right of first preference as regards unpaid wages recognized by Article 110 does not constitute a lien on the property of the insolvent debtor in favor of workers. It is but a preference of credit in their favor, a preference in application. It is a method adopted to determine and specify the order in which credits should be paid in the final distribution of the proceeds of the insolvent's assets. It is a right to a first preference in the discharge of the funds of the judgment debtor. (DBP vs. NLRC) covers both unpaid wages and monetary claims Labor Code Provisions for Wage ProtectionART. 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. 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 (c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment. ART. 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 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. 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 workers consent. 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. 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. 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.