Question & AnswerQ&A (Republic Act No. 6727)
Republic Act No. 6727 is commonly known as the Wage Rationalization Act.
The State's policy is to rationalize the fixing of minimum wages, promote productivity-improvement and gain-sharing, ensure a decent standard of living for workers and their families, guarantee labor's just share in production, enhance countryside employment via industry dispersal, and allow reasonable business returns.
The National Wages and Productivity Commission is created by the Act for wage and productivity policy coordination and supervision.
The Commission advises the President and Congress, formulates wage policies, prescribes wage determination rules, reviews regional wage levels, conducts studies and surveys, supervises Regional Boards, calls national tripartite conferences, and implements the Act.
Regional Boards develop regional wage plans, determine and fix minimum wages, issue wage orders, undertake studies, coordinate regionally, process wage exemption applications, and ensure compliance within their territorial jurisdiction.
A Wage Order is a regional minimum wage directive issued by a Regional Board after investigation and public consultation. It takes effect 15 days after publication in a local newspaper.
Factors include living wage demand, consumer price index, cost of living, workers' needs, industrial investment inducement, living standards improvement, prevailing wages, employers' capacity to pay, employment effects, and equitable income distribution.
Household/domestic helpers, personal service persons including family drivers, and some small retail/service establishments may be exempted as per rules and Regional Board determinations.
They are punishable by a fine up to 25,000 pesos and/or imprisonment from 1 to 2 years. Responsible officers of corporations or entities may be imprisoned as well.
Preliminary or permanent injunctions or temporary restraining orders cannot be issued against proceedings before the National Commission or Regional Boards.