Philippine Minimum Wage Law RA 602

Minimum wage rates by enterprise and locality

Section 3 requires every employer to pay minimum wages to each employee employed by an enterprise other than in agriculture at rates not less than the following:
- Four pesos a day on the effective date of the Act and thereafter for employees of an establishment located in Manila or its environs.
- Three pesos a day on the effective date of the Act and for one year after the effective date, and thereafter P4 a day, for employees of establishments located outside of Manila or its environs.
Section 3 provides an employer exception: the Act does not apply to any retail or service enterprise that regularly employs not more than five employees.
Section 3 requires minimum wage rates for farm enterprises comprising more than 12 hectares, for employees engaged in agriculture, at the following rates:
- On the effective date of the Act and for one year thereafter: P1.75 a day, with no allowances for board and lodging reducing the wage below P1.50 in cash during that year.
- One year after the effective date: P2 a day, with no allowances for board and lodging reducing the wage below P1.75 in cash.
- One year thereafter: P2.50 a day, with no allowances for board and lodging reducing the wage below P2.25 in cash.
Section 3 provides that effective on the first of July, nineteen hundred and fifty-two, the minimum wage rates for employees in the Government service shall be those provided in the non-agricultural and agricultural subsections of Section 3.
Section 3 provides that the Act does not apply to farm tenancy or to domestic servants.
Section 3 provides that the crew of vessels of Philippine Registry calling regularly at Manila is subject to the minimum wage for non-agricultural workers in Manila.
Section 3 sets valuation limits for benefits until investigations produce a different determination by the Secretary:
- Meals for agricultural employees: not more than thirty centavos per meal.
- Meals for other employees: not more than forty centavos per meal.
- Housing for agricultural workers: not more than twenty centavos daily.
- Housing for other employees: not more than forty centavos daily.
Section 3 authorizes industry-specific extension of minimum wage application: if a Wage Board appointed by the Secretary of Labor within one year after the effective date recommends extension to avoid undue hardship, the Board may recommend and the Secretary may approve an extension not to exceed six months and at a minimum wage not less than the rate that takes effect on the effective date of the Act.
Section 3 requires the Secretary of Labor, on petition of an interested party, to determine compliance in piece-work or contract work through all available devices of investigation and to issue findings and orders.

Wage Boards: when created and how they decide

Section 4 requires the Secretary of Labor to cause a wage investigation upon petition of six or more employees in any industry, to determine whether a substantial number are receiving wages less than sufficient to maintain health, efficiency, and general well-being.
Section 4 provides that if, after investigation, the Secretary believes a substantial number of employees receive such insufficient wages, the Secretary shall appoint a Wage Board to fix a minimum wage for that industry.
Section 4 requires any minimum wage established under the Act to be as nearly adequate as economically feasible to maintain the minimum standard of living necessary for health, efficiency, and general well-being.
Section 4 requires the Secretary of Labor and a Wage Board to consider (among other relevant factors) the:
- cost of living;
- wages established for like or comparable work by collective agreements or arbitration awards;
- wages paid for like or comparable work by employers who voluntarily maintain reasonable standards; and
- fair return of the capital invested.
Section 4 mandates that the Secretary of Labor make rules governing Wage Board appointment, public hearings, and mode of procedure, consonant with due process of law.
Section 4 provides that appointment of a Wage Board does not preclude the Secretary from subsequently appointing a new Wage Board for the same industry.
Section 4 authorizes the Secretary to appoint a Wage Board for any industry whether or not named in Section 3.
Section 4 establishes the basic trigger for wage board action: a petition by six or more employees plus the Secretary’s opinion after investigation.

Wage Board composition, quorum, deadlines, and limits

Section 5 requires a Wage Board to consist of:
- one member representing the public as chairman;
- two representatives of employees in the industry; and
- two representatives of employers in the same industry.
Section 5 provides that employee and employer representatives are selected from nominations submitted by employees or organizations thereof in the industry.
Section 5 provides that three members constitute a quorum, and recommendations require a vote of not less than a majority of all its members.
Section 5 sets compensation limits: members receive per diems not exceeding seven pesos for each day of actual attendance; they are reimbursed for necessary traveling expenses; and a government employee chairman is not entitled to any per diem.
Section 5 requires the Secretary of Labor to present all evidence and information in his possession relating to the wages in the industry, and to bring relevant witnesses before the Board; the Wage Board may summon other witnesses or call for additional information.
Section 5 requires a Wage Board to submit recommendations within thirty days of organization to the Secretary of Labor.
Section 5 prohibits recommendations below statutory floors:
- it shall not recommend a minimum wage less than the prevailing wage obtaining on the effective date of the Act; and
- in no case shall it be less than the minimum wage rates set in Section 3.
Section 5 allows wage differentiation and special terms in approved circumstances:
- minimum wages may vary with localities if conditions make differentiation proper and necessary and it does not give undue competitive advantage;
- minimum wages may include terms and conditions relating to part-time employment and suitable treatment for other cases justified by the nature and character of employment;
- for persons employed as industrial homeworkers, it may set the highest minimum rate economically feasible that will not result in substantial curtailment of employment opportunities, and such rate shall not be less than seventy-five per cent of the minimum wage rates established in Section 3.
Section 5 identifies home industries covered by the Act, including apparel, embroidery, other needle trades, shoes, weaving, basketry, and other handicrafts.
Section 5 authorizes the Secretary to add specific home industries to the coverage by regulation when necessary to further the Act’s purposes.
Section 5 provides a remedy for delay: if the Wage Board report is not submitted within thirty days, the Secretary may appoint a new Wage Board.

Wage orders: notice, hearings, approval, and effect

Section 6 requires that upon filing of the Wage Board’s report, the Secretary of Labor shall:
- give notice to interested parties; and
- conduct a public hearing within fifteen days.
Section 6 requires the Secretary to approve or reject the recommended minimum wages within fifteen days after termination of the hearing, without modification of the recommended minimum wages.
Section 6 provides the rule if rejected: if the Secretary rejects, the Secretary shall issue reasons and submit the matter to the same Wage Board convened within fifteen days, which shall submit its report and recommendations within thirty days after convening; if there is further disagreement, the Secretary’s decision prevails.
Section 6 requires that if approved, the Secretary shall issue a wage order on the date of approval prescribing the minimum wages to be paid to employees in the industry.
Section 6 requires due notice for hearings through publication in newspapers of general circulation and other means reasonably calculated to give general notice to interested parties.
Section 6 requires due process of law for hearings before the Secretary.
Section 6 provides that the rules of evidence applied by courts in law proceedings shall not strictly apply in proceedings conducted by or before a Wage Board.
Section 6 requires wage orders to define the industry to which they apply and allows inclusion of administrative regulations necessary to carry out the Act and wage orders.
Section 6 provides that except as provided in Section 9, wage order rates apply alike to all employees regardless of age or sex.
Section 6 requires publication notice before effect: no wage order takes effect until fifteen days after due notice of issuance is given by publication in newspapers of general circulation and other means reasonably calculated to give general notice.
Section 6 requires a certified copy of each wage order to be filed in the office of the President of the Philippines.
Section 6 imposes a direct employer prohibition: no employer shall, after the effective date of a minimum wage order, pay any employee within the wage order’s scope wages less than the amount prescribed by the Act or the order.

Review, subpoenas, and evidence powers

Section 7 grants any person aggrieved by an order of the Secretary of Labor the right to review in the Supreme Court by filing a written petition within fifteen days after entry and publication of the order.
Section 7 limits review to questions of law, while findings of fact supported by substantial evidence are conclusive.
Section 7 provides fee exemptions for employees and similarly situated claimants: if the petitioner or appellant is an employee, wage earner, farmer, or laborer, he is exempt from filing appeal bond and docketing fee and can file typewritten pleadings in all cases.
Section 7 governs stay of order: commencement does not operate as a stay unless specifically ordered by the Court, and no stay exists unless the person complaining files an undertaking with surety satisfactory to the Court for payment to affected employees of the amount by which entitled compensation exceeds compensation actually received while stay is in effect.
Section 8 authorizes the Secretary of Labor or the Wage Board chairman to:
- administer oaths;
- take or cause depositions of witnesses; and
- require by subpoena the attendance and testimony of witnesses and production of books, records, and other evidence.
Section 8 provides enforcement for subpoena failures: on application, the proper court of First Instance must compel obedience through contempt proceedings, consistent with contempt for disobedience to court-issued subpoenas.
Section 8 gives the Secretary or chairman power to certify to official acts.
Section 8 prohibits refusing to attend, testify, or produce records on self-incrimination grounds, but it provides protection: no person so testifying shall be prosecuted or subjected to penalty or forfeiture for the compelled transactions or matters, except for perjury committed in the testimony.

Learners, handicapped workers, and wage payment rules

Section 9 authorizes the Secretary of Labor and/or authorized representatives, by regulations or orders necessary to prevent curtailment of employment opportunities, to provide:
- the employment of learners or apprentices under special certificates with wages not lower than 75 per cent of the applicable minimum, subject to limitations on period, number, proportion, and length of service not more than one year per certificate; and
- the employment of individuals whose earning capacity is impaired by physical or mental deficiency or injury at wages not lower than 50 per cent of the applicable minimum for the period fixed in special certificates.
Section 9 provides an exemption from compensation: employment of learners or apprentices who are students or graduates of authorized nautical schools, in vessels of Philippine registry, may be permitted without compensation.
Section 10 requires that wages payable in money be paid in legal tender of the Philippines and makes it unlawful to pay wages in the form of promissory notes, vouchers, coupons, tokens or any other form alleged to represent legal tender.
Section 10 allows payment by bank check, postal check, or money order in cases where customary or necessary due to special circumstances, under regulations the Secretary prescribes.
Section 10 requires direct payment of wages to the employee to whom they are due, including retroactive wages, except in the enumerated exceptions:
- where the employee consents to insurance by the employer, the employer may deduct premiums paid for insurance;
- where force majeure renders payment impossible;
- where the employee’s right to check-off has been recognized by the employer or authorized in writing by the individual employees.
Section 10 authorizes payment of wages of a deceased employee to heirs without intestate proceedings, using an affidavit procedure and distribution supervised by a Secretary of Labor representative as referee, and it provides that such payment absolves the employer of further liability for that amount.
Section 10 prohibits employer actions that interfere with an employee’s freedom to dispose of wages and prohibits compelling employees to use employer-operated or third-party store/services.
Section 10 prohibits wage deductions except as authorized by law, and prohibits requiring employee deposits for reimbursement of loss or damage unless the employer first obtains Secretary authorization based on a finding that the practice is recognized in the trade or occupation or is necessary/desirable.
Section 10 sets conditions for permitted deductions/reimbursements, including:
- employee information of extent and conditions of deductions in the manner prescribed by the Secretary;
- clear showing the employee is responsible for loss or damage;
- reasonable opportunity for the employee to show cause;
- deduction amount being fair and reasonable, not exceeding actual loss/damage, and not exceeding twenty per cent of wages for that week.
Section 10 prohibits coercive or unauthorized wage withholding: it is unlawful for any person to make deductions or withhold any amount from wages or induce employees to give up any part through force, intimidation, threat, procuring dismissal, or any other manner.
Section 10 requires wage frequency:
- wages must be paid not less often than once every two weeks or twice a month at intervals not exceeding sixteen days;
- if task work completion requires more than a fortnight and no collective agreement or arbitration award otherwise fixes intervals, the employer must pay on account not less often than once every two weeks or twice a month at intervals not exceeding sixteen days, and must make a final settlement within two weeks after task completion.
Section 10 requires payment at or near the place of undertaking, except as otherwise provided by Secretary regulations.
Section 10 imposes contractor payroll responsibility:
- when an employer contracts with another person for performance of the employer’s work, the contract must provide contractor and subcontractor employees are paid according to the Act, and if the contractor or subcontractor fails to pay, the employer becomes civilly liable to those employees to the extent the work is performed under the contract as if directly employed by the employer;
- the same rule applies to a non-employer “Indirect Employer” contracting with a contractor.
Section 10 authorizes bond requirement by employer or indirect employer in contractor arrangements: they may require a contractor bond equal to the cost of labor under the contract on condition the contractor pays wages in accordance with the Act.
Section 10 requires wage condition notification at hiring for all employees to whom a minimum wage applies under the Act, including those paid higher than the applicable minimum, including notice of:
- the rate of wages payable;
- the method of calculation;
- periodicity and the day, hour and place of payment; and
- any changes to these items.

Regulations, enforcement machinery, and employee protections

Section 11 authorizes the Secretary of Labor to make, issue, amend, and rescind regulations and orders necessary or appropriate to carry out the Act.
Section 11 authorizes regulations/orders to define terms, set terms and conditions (including industrial home work rules), prevent circumvention or evasion, safeguard standards in wage orders, and provide reasonable valuation of board, lodging, or similar services furnished by employers.
Section 11 allows industrial homework regulations/orders to restrict such work or establish piece rates that yield to the average employee the minimum wage applicable to the industrial homeworkers involved.
Section 11 requires notice and public hearing before regulations/orders relating to industrial homework are issued.
Section 11 requires regulation/order effect upon publication in newspapers of general circulation and other means reasonably calculated to give general notice.
Section 11 subjects regulations/orders to court review under the same procedure as Section 7.

Administration structure and employer record-keeping

Section 12 creates the Wage Administration Service in the Department of Labor under a Chief compensated at seven thousand two hundred pesos per annum.
Section 12 abolishes the Wage Claims Division of the Bureau of Labor and transfers its functions, records, equipment, unexpended appropriation, and personnel directed by the Secretary to the Wage Administration Service.
Section 12 authorizes the Secretary to appoint necessary employees for the Service subject to civil service laws and to fix their compensation in accordance with law.
Section 12 authorizes the Secretary to arrange use of existing national, provincial, or local agencies and voluntary and uncompensated services as needed.
Section 12 authorizes delegation: the Secretary may delegate any or all powers to the Chief, who may act personally or through duly authorized representatives.
Section 12 imposes the Chief’s duty to enforce provisions of the Act and the orders and regulations issued thereunder unless otherwise provided.
Section 12 requires every employer to keep a printed abstract of the law and a copy of any minimum wage order applicable to them, conspicuously posted in or about the premises where covered employees are employed.
Section 12 requires employer records to include name, address, occupation, and the amount paid each pay period or workweek, plus other information for periods as the Secretary prescribes.
Section 12 grants the Secretary or authorized representatives access to records to copy them, question employees, and investigate facts and conditions to determine violations and aid enforcement.

Prohibitions: discrimination and false reporting

Section 13 prohibits unlawful discrimination after the Act’s effective date: no person may discharge or discriminate against an employee because the employee filed a complaint, instituted proceedings under or related to the Act, testified or is about to testify, or served or is about to serve on a Wage Board.
Section 14 prohibits false reporting: after the Act’s effective date, no person may make statements, reports, or records filed or kept under the Act or regulations/orders knowing they are false in a material respect.

Criminal penalties and civil recovery of unpaid minimum wage

Section 15 provides criminal penalties for willful violations:
- a fine of not more than two thousand pesos;
- and on second conviction, imprisonment of not more than one year;
- or both fine and imprisonment at the court’s discretion.
Section 15 provides corporate liability: if a corporation, trust, partnership or association commits the violation, the manager responsible at the time of violation is liable; for a government corporation, the managing head is liable unless the violation is due to an act/commission of another person over whom the managing head has no control.
Section 15 authorizes the Secretary to supervise payment of unpaid minimum wages or wages found owing.
Section 15 authorizes the Secretary to sue in a competent court to recover wages owing, with legal interest, and it provides that recovered sums are held in a special deposit account and paid directly by order of the Secretary to the employee(s).
Section 15 provides disposition for unreachable employees: sums not paid because an employee cannot be located within three years are covered into the Treasury as miscellaneous receipts.
Section 15 imposes employer civil liability for underpayment: any employer who underpays is liable to the affected employee in the amount of unpaid wages with legal interest.
Section 15 grants standing for civil recovery: the action to recover underpayment may be maintained in any competent court by anyone or more employees on behalf of themselves.
Section 15 mandates attorney’s fees in civil recovery: the court shall allow a reasonable attorney’s fee not exceeding ten per cent of the amount awarded to plaintiffs, unless the amount awarded is less than one hundred pesos, in which case the fee may be ten pesos, but not exceeding that amount.
Section 15 provides payment procedure for awards: payment to plaintiffs must be made directly to plaintiffs in the presence of a Secretary or Court representative; if payment is witnessed, the Secretary must be notified within ten days of payment.
Section 15 prohibits interception of underpayment: no employer, attorney, or other person besides the employee(s) to whom underpayment is due may receive any part of the underpayment; no attorney may receive any fee beyond the maximum limits specified.
Section 15 provides the commencement rule for limitation periods: an individual claimant’s action is considered commenced on the date the complaint is filed if the claimant is specifically named as a party plaintiff; otherwise, it is commenced on the subsequent date his name is added as a party plaintiff.

Court jurisdiction and wage disputes handling

Section 16 grants the Court of First Instance jurisdiction to restrain violations of the Act.
Section 16 provides that actions by the Secretary or by affected employees to recover underpayment may be brought in any competent court, and the decision must be rendered within fifteen days from submission for decision.
Section 16 provides that appeals from these decisions follow applicable law.
Section 16 authorizes the Court of Industrial Relations to decide minimum wage disputes in appropriate instances where the dispute involves minimum wages above the applicable statutory minimum and no wage order exists for the industry or locality.
Section 16 restricts Secretary fixing in single-enterprise/sole employer scenarios: the Secretary shall not undertake to fix the minimum wage for an industry or branch involving only a single enterprise or a single employer.
Section 16 provides the strike-related minimum wage process:
- when minimum wage demands involve an actual strike, the matter is submitted to the Secretary for conciliation attempts;
- if no settlement is effected within fifteen days, the Secretary indorses the matter to the Court of Industrial Relations, which acquires jurisdiction over the case including the minimum wage issue;
- the court decides after a hearing where the Secretary’s views are given;
- the decision is rendered within fifteen days after submission for determination;
- fact findings are conclusive if supported by substantial evidence; and
- the decision is subject only to appeal by certiorari.

Time limits, civil service safeguards, and contract limits

Section 17 establishes a three-year statute of limitations for actions to enforce causes of action under the Act, counted from when the cause of action accrued, and it provides that actions are forever barred unless commenced within three years.
Section 18 protects administration and enforcement personnel: all persons appointed or assigned to Government service in administration/enforcement must serve under Civil Service rules and regulations.
Section 18 prohibits conflict of interest and representation:
- no person engaged in administration/enforcement may be an employer or an officer/representative/agent of an employer or employers’ association, an association of employees, or a Communist;
- no such person may act as attorney or agent for parties to a labor dispute or have financial interest in such dispute.
Section 18 provides removability for delegated officials on sustaining charges of malfeasance or nonfeasance in office.
Section 18 mandates summary dismissal and criminal action for bribery: any person engaged in administration/enforcement who accepted any bribe from or on behalf of a party in interest is summarily dismissed and criminal action is instituted.
Section 19 preserves employee rights under other labor laws and practices: nothing in the Act deprives employees of the right to seek fair wages, shorter working hours, and better working conditions, and it does not justify reducing wages previously paid in excess of the minimum wage or reducing supplements furnished on the date of enactment.
Section 20 forbids waiver of minimum wage rights: no worker or organization of workers may waive any rights established under the Act, and any agreement or contract accepting a lower wage or less than any required benefit under the Act is invalid.

Secretary’s reporting, appropriations, repeal, separability, effectivity

Section 21 requires the Secretary of Labor to submit annually in January a public report to the President and Congress covering administration/enforcement activities during the preceding year and including information, data, and recommendations for amendments or further legislation.
Section 22 authorizes appropriation of one hundred fifty thousand pesos or so much thereof as may be necessary for salaries, per diems, travelling expenses, purchase of materials and equipment, and other necessary sundry expenses; expenses for succeeding fiscal years are provided in