Payment of Wages and Prohibition on Token Use

Section 1 requires employers to pay salaries and wages on at least a bi-weekly basis to protect laborers and employees.
Section 2 prohibits arrangements that force employees to buy goods or that shift wage payment into prohibited forms.
Sections 3 to 5 void wage-related agreements that defeat the law’s purposes and penalize violations.
Sections 4 to 6 establish how criminal liability is treated for nonpayment and who is responsible for corporate and government violations.

Section 2 requires that salary or wages must not be paid “by means of tokens, tickets, chits or objects other than the legal tender currency of the Philippines.”
Section 1 allows a reduced payment frequency only through a Secretary of Labor exemption subject to conditions.
Section 4 treats certain failures to pay as a prima facie fraud under referenced provisions of the Revised Penal Code.
Section 6 defines responsibility by role: the manager (or the person acting as manager) for companies, and the head of office for government offices.

Section 1 applies to every employer, including the head of every government office, whether national, provincial, or municipal.
Section 1 covers payment of salaries and wages of employees and laborers.
Section 2 regulates the employer–employee relationship by prohibiting forcing or compelling employees to purchase property and prohibiting wage payment by non-legal tender objects.
Section 3 applies to any contract, whether verbal or written, between employer and laborer that defeats the Act’s purposes.
Sections 4 and 5 apply to violations involving failure to pay as required and willful violations of the prohibited wage practices.

Section 1 mandates that employers pay salaries and wages at least once every two weeks or one-half month.
Section 1 allows less frequent payment only when it is impossible due to force majeure or causes beyond control, or when the employer is previously exempted by the Secretary of Labor.
Section 1 limits Secretary of Labor exemptions by requiring that the Secretary grants them only after proper inquiry and only when the business conditions and exigencies require less frequent payment.
Section 1 prohibits any authorized reduced payment frequency to be less frequent than once a month.
Section 1 conditions exemption on establishment of a store within or near the business premises where employees can conveniently buy foodstuffs and other articles of prime necessity at cost and on credit, payable on the following pay day.
Section 1 treats the exemption and store arrangement as part of compliance, because without these conditions the employer cannot lawfully reduce payment frequency.

Section 2 prohibits any employer from forcing, compelling, or obliging an employee or laborer to purchase merchandise, commodities, or any other personal property from the employer or from another person, firm, or corporation.
Section 2 prohibits such forced purchasing directly or indirectly.

Section 2 prohibits paying or causing payment of salary or wages wholly or partly before, during or after pay day by means of tokens, tickets, chits or objects other than the legal tender currency of the Philippines.
Section 2 prohibits negotiating directly or indirectly through another person, firm, or corporation using chits, tickets or other objects that represent loans or sums of money paid in advance for salary or wages not yet due at the time of the issuance of those objects.

Section 3 declares null and void any contract, verbal or written, between employer and laborer that directly or indirectly defeats the purposes of the Act.

Section 4 provides that failure of the employer to pay as required by Section 1 is prima facie considered a fraud committed by the employer against the employee or laborer by means of false pretenses, in the manner referenced in Article three hundred and fifteen, paragraph four, sub-paragraph two (a) of the Revised Penal Code.
Section 4 requires that the employer be punished in the same manner as provided in the referenced provision of the Revised Penal Code.

Section 5 imposes criminal penalties for any person who willfully violates the provisions of Section 2.
Section 5 provides that each offense is punishable by a fine of not more than two thousand pesos, or imprisonment for a period of not more than two years, or both, in the court’s discretion.

Section 6 states that in the case of a company, firm or corporation, the manager is responsible, and in his default, the person acting as such when the violation took place is responsible.
Section 6 states that in the case of a government office, the head of the office is responsible.
Section 6 provides an exception for government offices where the head shows the violation was due to an act or omission of another person over whom the head has no control; in that case, the other person is held responsible.

Section 7 establishes that the Act’s effectiveness is immediate, taking effect upon its approval (June 9, 1938).