Integration of COLAs into Minimum Wages

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EXECUTIVE ORDER NO. 178: Integration of COLAs into Minimum Wages

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Title Supreme Court: Integration of COLAs into Minimum Wages

Law: Executive Order No. 178

Decision Date: Jun 1, 1987

Executive Order No. 178, issued by President Corazon C. Aquino, mandates the integration of cost-of-living allowances (COLAs) into the basic wage of all covered workers in the Philippines, with different integration dates for establishments of varying sizes and paid-up capital.

statutory daily minimum wages

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Schedule for Integration for General Establishments

COLAs under Wage Orders Nos. 1, 2, and 3 are to be integrated effective May 1, 1987.
COLAs under Wage Orders Nos. 5 and 6 are to be integrated effective October 1, 1987.

Schedule for Integration for Small Establishments

For establishments with fewer than 30 employees and a paid-up capital of P500.00 or less:
- COLAs under Wage Orders Nos. 1 and 2 to be integrated effective May 1, 1987.
- COLA under Wage Order No. 3 to be integrated effective October 1, 1987.
- COLAs under Wage Orders Nos. 5 and 6 to be integrated effective January 1, 1988.

Authority for Implementing Rules and Regulations

The Secretary of Labor and Employment, serving as Chairman of the National Wages Council, is tasked to promulgate the necessary rules and regulations to enforce this Executive Order.

Repeal and Modification of Inconsistent Laws

Any laws, orders, issuances, rules, regulations, or parts thereof inconsistent with this Executive Order are explicitly repealed or modified to conform with the integration scheme.

Effectivity

The Executive Order takes effect retroactively from May 1, 1987.
This ensures immediate implementation of the integrated wage system from this date.

Key Legal Concepts

Integration of COLAs into basic pay modifies the wage structure, eliminating separate cost-of-living allowances.
Recognizes differentiated treatment for small establishments in phasing the integration.
Affirms executive power to set wage policy details following tripartite consensus.
Emphasizes coordinated regulatory framework under the Department of Labor and Employment to guarantee enforcement.

END