QuestionsQuestions (Republic Act No. 602)
An “employer” includes any person acting directly or indirectly in the interest of an employer in relation to an employee, and includes the Government and government corporations. This broad definition ensures that entities with actual control or interest over employment relationships cannot escape minimum wage obligations.
“Wage” is remuneration capable of being expressed in money payable under a contract for work or services, and includes the fair and reasonable value (as determined by the Secretary of Labor) of board, lodging, or other facilities customarily furnished. The value cannot include employer profit that reduces the wage below the minimum wage.
RA 602 sets a minimum wage of Four pesos a day on the effective date of the Act for employees of establishments located in Manila or its environs.
It is Three pesos a day on the effective date and for one year after, then thereafter becomes Four pesos a day.
For employees engaged in agriculture: (1) on the effective date and for one year thereafter: P1.75/day, with no allowances for board and lodging reducing it below P1.50 in cash during that year; (2) one year after: P2/day, no reduction below P1.75 in cash; (3) one year thereafter: P2.50/day, no reduction below P2.25 in cash.
The Act does not apply to: (1) farm tenancy; (2) domestic servants; and it provides a limitation for retail or service enterprises that regularly employ not more than five employees.
Upon petition of six or more employees in any industry, the Secretary has the power and duty to cause an investigation into wages and living conditions to determine if a substantial number receive wages insufficient for health, efficiency, and general well-being.
A Wage Board is appointed if, after investigation, the Secretary is of the opinion that a substantial number of employees are receiving such wages. The minimum wage must be as nearly adequate as economically feasible to maintain the minimum standard of living for health, efficiency, and general well-being, considering factors like cost of living and comparable wages.
A Wage Board has one public representative as chairman, two representatives of employees, and two representatives of employers. Three members constitute a quorum.
No. The Wage Board shall not recommend a minimum wage for any agricultural or non-agricultural industry of less than the prevailing wage obtaining on the effective date of the Act, and in no case less than the minimum wage rates set in Section 3.
Upon filing, the Secretary gives notice and conducts a public hearing within fifteen days. Within fifteen days after the termination of the hearing, the Secretary approves or rejects but cannot modify the recommended minimum wages. If rejected, reasons are issued and the matter is submitted to the same Board again; if disagreement persists, the Secretary’s decision prevails. If approved, the Secretary issues the wage order.
A wage order takes effect only after fifteen days from due notice of issuance, given by publication in newspapers of general circulation and other means reasonably calculated to give general notice.
Wages payable in money must be paid in legal tender; it is unlawful to pay in promissory notes, vouchers, coupons, tokens, or other alleged substitutes. Wages must be paid directly to the employee to whom they are due, except in limited instances (e.g., certain deductions with consent, force majeure impossibility, recognized check-off, or payment to heirs of a deceased employee under specified conditions).
When an employer contracts for the performance of the employer’s work, the employer must ensure that contractor/subcontractor employees are paid according to RA 602. If the contractor or subcontractor fails to pay wages as required, the employer becomes civilly liable to the employees to the extent the work is performed, as if the employees were directly employed. The “indirect employer” rule applies similarly.
Section 13: It is unlawful to discharge or discriminate against an employee because they filed a complaint, instituted or caused a proceeding, testified, or were about to testify, or served on a Wage Board. Section 14: It is unlawful to make any false material statement or record filed/kept under the Act, knowing it to be false in a material respect.
Criminal: Willful violation may result in a fine not more than P2,000, or upon second conviction imprisonment not more than one year, or both, at the court’s discretion. Civil: An employer who underpays is liable to the affected employee for unpaid wages with legal interest; employees may sue, and courts may award reasonable attorney’s fees not exceeding 10% of the amount awarded (with specified minimum/ceiling rules).
An aggrieved person may file a petition to review a wage order in the Supreme Court within fifteen days after entry and publication. Review is limited to questions of law; findings of fact by the Secretary supported by substantial evidence are conclusive.