Revised LGU Salary and Position Classification Guidelines

Legal basis and mandated purpose

The Circular is issued to implement the Revised Compensation and Position Classification System in the local government mandated under Executive Order No. 164.
Executive Order No. 164 provides for an increase in basic salaries of civilian personnel effective January 1, 1994.
The increase under the Circular is Eight Hundred Pesos (P800.00) per month for Salary Grades 1 to 10, and Seven Hundred Pesos (P700.00) per month for Salary Grades 11 upwards.
The Circular governs the initial implementation of the revised system in local government.

Coverage and scope of positions

The Circular covers all positions, whether permanent, temporary, contractual, casual or emergency in nature.
The Circular covers positions that are appointive or elective, whether the appointment is full-time or part-time.
The Circular covers positions that exist at the time of effectivity and positions thereafter created.
The salary rules apply within the local government units covered by the Circular’s funding and administration provisions.

Key definitions for pay adjustment

Present salary means the actual basic salary rates received as of December 31, 1993, exclusive of Personnel Economic Relief Allowance (PERA), Additional Compensation, representation and transportation allowances, bonus and cash gift, honorarium, and any other form of additional compensation.
Transition allowance means the excess of the present salary over the eight step of the grade allocation of the employee’s position.

Compensation rules and salary computation

Effective January 1, 1994, the rates in the salary schedules under Joint Commission Circular No. 36 are amended as shown in Annexes aAa to aHa, referred to as Interim Salary Schedules.
Incumbents must receive the salary rate corresponding to their designated salary steps in the salary grade allocation of their positions as of December 31, 1993.
Incumbents who have transition allowance and/or “over-and-above allowance” are entitled to the salary adjustments authorized herein.
For incumbents with transition allowance and/or over-and-above allowance, the excess of the adjusted salary over the prescribed salary rates is treated as advance implementation of the salary schedule under Joint Senate and House Resolution No. 1, s. 1994, as adopted by Executive Order No. 164.
Appointments effective January 1, 1994 and thereafter must be made at the first step of the salary grade allocation of the position prescribed under Section 5.1.
If the appointee previously received a higher salary than the first step of the salary grade allocation under an approved permanent appointment, the existing salary rules apply.
Salary adjustments under this Circular and subsequent salary increases do not apply to devolved, national personnel until the salary rates of their local counterparts have equalled their salary rates.
PERA and Additional Compensation continue to be paid as allowances and are not considered integrated into the basic salary rates in the interim salary schedules.
Contractual employees whose salaries are paid out of lump sum appropriations or project funds may be entitled to not more than 120% of the adjusted minimum hiring rate of comparable regular positions.
The wage rates of daily paid employees must be computed by dividing the monthly salary rate in the interim salary schedules by twenty-two (22) working days.
The total wages received in a month by a daily paid employee must not exceed the applicable monthly salary rate.
The interim salary schedule rates are used for computing retirement pay, year-end bonus, and other similar benefits.

Exemptions and prohibited over-adjustments

Consultants and experts hired by government entities for a limited period to perform specific activities or services with expected outputs continue to be compensated pursuant to existing applicable laws, rules, and regulations until these are revised or amended.
Student laborers and apprentices, and others similarly situated, continue to be compensated pursuant to existing applicable laws, rules, and regulations until these are revised or amended.
Laborers hired as part of a job contract (pakiao), those paid on piecework basis (including mail contractors), and others similarly situated continue to be compensated pursuant to existing applicable laws, rules, and regulations until these are revised or amended.
Local Chief Executive and the concerned Sangguniang Panlalawigan/Panlungsod/Bayan are prohibited from granting any adjustment in excess of the amounts authorized in the Circular.

Funding, reporting, contributions, and responsibility

The amount necessary for initial implementation must come from the respective funds of the local government units.
The required amount must be provided for in an appropriation ordinance enacted by the local Sangguniang Panlalawigan/Panlungsod/Bayan.
If local funds are insufficient, implementation of salary increases must be partial and proportionate for all positions in the local government unit.
When local funds are insufficient, the salary increase must be fixed at a uniform percentage so that no official or employee receives a percentage increase higher than any other employee in the same local government unit, subject to Section 5.5.
The Provincial Governor, City or Municipal Mayor concerned is responsible for submitting the required reports.
The Provincial Governor, City or Municipal Mayor is held personally liable for any payment of salary adjustment not in accordance with the Circular’s provisions, without prejudice to the refund of any payment by the employee concerned.
Salary adjustments authorized under the Circular are subject to mandatory contributions for:
- GSIS life and retirement insurance premiums, and
- Home Development Mutual Fund (HDMF) contributions, if the recipient is a member of GSIS and HDMF.
The contributions are required pursuant to Republic Act No. 660 and Commonwealth Act No. 186 with respect to retirement and life insurance premiums.

Disposition of uncategorized cases; effectivity rule

Cases not covered by the provisions of the Circular must be referred to the Secretary of Budget and Management for resolution.
The Circular’s effectivity is January 1, 1994.