Law Summary
Coverage of the Circular
- Applies to all positions in the national government, state universities and colleges, government-owned or controlled corporations, and financial institutions.
- Includes permanent, temporary, contractual, casual, emergency appointments, appointive or elective, full-time or part-time positions.
Exemptions
- Consultants and experts hired for limited periods, compensated under existing laws.
- Student laborers, apprentices, and similarly situated individuals, paid according to existing laws.
- Laborers hired under job contracts (pakiao), paid on a piecework basis including mail contractors.
Definitions of Key Terms
- Present salary: Basic salary rates as of December 31, 1993, excluding allowances, bonuses, honoraria, and other additional compensation.
- Transition allowance: The excess of present salary over the eighth step of the employee's position salary grade.
- Over-and-above allowance: Extra regular monthly allowance given to public school teachers prior to July 1, 1989, apart from basic salary.
Compensation Rules for Civilian Personnel
- Maintains salary grades and allocations from RA 6758 but adjusts salary rates effective January 1, 1994.
- Incumbents receive salary rates corresponding to their salary steps as of December 31, 1993.
- Positions upgraded by Joint Senate and House Resolution No. 1 receive the new salary rates.
- Transition and over-and-above allowances continue and any excess adjusted salary is treated as advance implementation.
- New appointments from January 1, 1994, start at the first step of the respective salary grade.
- Personnel Economic Relief Allowance and Additional Compensation remain separate from basic salary.
- Contractual employees paid from lump sum or project funds may earn up to 120% of comparable regular minimum hiring rates.
- Daily wage rates for daily paid employees are computed by dividing monthly salary by 22 working days, without exceeding the monthly rate.
- Interim salary rates used for retirement pay, year-end bonus, and similar benefits.
- Salary adjustments for the President, Vice-President, House Members, and Senators take effect after their current terms end.
Compensation for Uniformed Personnel
- Paid pursuant to Administrative Order No. 110 dated February 4, 1994, covering Department of National Defense and Department of Interior and Local Government uniformed personnel.
Prohibition on Unauthorized Salary Adjustments
- Agency heads are prohibited from granting salary adjustments exceeding the amounts authorized in this Circular.
Funding Sources
- National government agencies shall charge funds against the Compensation Adjustment Fund and appropriations under RA 7663 and the 1994 General Appropriations Act.
- Deficiencies can be charged against agency savings.
- Government corporations must use corporate funds; partial implementation is allowed if funds are insufficient but must be uniform and proportionate across positions.
Release of Funds Procedure
- DBM releases Notice of Cash Allocation (NCA) after receiving required reports under National Budget Circular No. 431.
- NCAs supplement guaranteed levels of authority to incur expenditures and are integrated into Comprehensive Advice of Allotment under National Budget Circular No. 432.
Payment Procedures and Documentation
- Agencies must pay salary adjustments upon receipt of NCA or immediately if funds are available.
- Payments subject to DBM review and adjustment if irregularities are found.
- Agencies must notify employees/officers of salary adjustments using Notices of Salary Adjustment (individual and group forms).
- Copies of notices are furnished to the Government Service Insurance System (GSIS) for members.
Post-Audit Requirements
- Agencies prepare Plantilla of Personnel and Salary Adjustment Form (PPSAF), separate forms for contractual, casual, and emergency positions.
- PPSAFs certified by Human Resource Management Officers and approved by agency heads must be submitted within 30 days after adjustment.
- DBM's Compensation and Position Classification Bureau or regional offices verify and certify PPSAFs.
- Certified PPSAFs distributed to Civil Service Commission, Commission on Audit, office of origin, and retained by DBM for records.
Accountability of Agency Heads
- Responsible for submitting accurate reports on salary adjustments.
- Personally liable for unauthorized salary adjustments and any excess payments.
Mandatory Contributions
- Salary adjustments subject to mandatory contributions for GSIS life and retirement insurance premiums and Home Development Mutual Fund (HDMF) contributions if members.
Savings Clause
- Uncovered cases referred to the Secretary of Budget and Management for resolution.
Effectivity
- Circular effective January 1, 1994.