Philippine Minimum Wage Law RA 602

Law Summary

Definitions

Person: individual, partnership, corporation, business trust, legal representative, or organized group.
Employer: includes any person acting on behalf of an employer, including government and government corporations.
Employee: any individual employed by an employer.
Agriculture: farming operations excluding manufacturing or processing of certain farm products.
Industry: trade, business, or branch where individuals are gainfully employed.
Employ: to suffer or permit work.
Wage: monetary remuneration payable under contract inclusive of board, lodging, or facilities excluding profits.
Fair and reasonable value: value without profit to employer that would reduce wage below minimum.
Facilities: benefits to employee or family, excluding tools or items for employer’s benefit.
Hired farm labor: laborers employed on farm excluding operator and immediate family.
Farm enterprise: all land under one management engaged in farming operations.

Minimum Wage Provisions

Employers must pay minimum daily wages depending on location and industry.
Non-agricultural enterprises in Manila: minimum P4/day.
Non-agricultural enterprises outside Manila: minimum P3/day for one year then P4/day.
Agricultural enterprises with more than 12 hectares: minimum wages phased from P1.75 to P2.50/day over years with cash wage floors.
Government employees included in wage rates from July 1952.
Exceptions: retail/service enterprises with 5 or fewer employees, farm tenancy, domestic servants.
Crew of domestic vessels subject to Manila minimum wages.
Valuation of meals and housing provided.
Wage Board may recommend delayed wage application in industry.
Secretary of Labor investigates compliance with wage standards, including piece-work.

Wage Investigation and Appointment of Wage Boards

Secretary of Labor must investigate wages and living conditions upon petition.
If insufficient wages found, Wage Board appointed to fix minimum wages.
Minimum wage must be economically feasible and maintain health and well-being.
Factors considered: cost of living, comparable wages, voluntary standards, fair return on capital.
Rules for Wage Board appointment, hearings, and procedures to ensure due process.
New Wage Boards may be appointed for same industry.

Composition and Powers of the Wage Board

Consists of five members: one public chairman, two employee representatives, two employer representatives.
Majority vote needed for recommendations.
Compensation limited to per diems and travel expenses.
Secretary of Labor provides evidence and calls witnesses.
Wage Board submits minimum wage recommendations within 30 days.
Recommendations cannot go below statutory minimum or prevailing wage.
Wage variation by locality allowed if justified.
Special treatment for part-time, industrial homeworkers, and home industries.

Wage Orders Issuance and Effect

Secretary of Labor conducts public hearings and decides to approve/reject wage recommendations.
No modification allowed by Secretary; rejection triggers further board reports.
Approved wage orders define industries affected, terms of wage enforcement.
Orders take effect 15 days after publication.
Employers must comply; wages less than minimum wage prohibited.

Review of Wage Orders

Aggrieved persons may file Supreme Court petition within 15 days.
Review limited to legal questions; factual findings with substantial evidence are conclusive.
Employees exempt from filing fees and may file typewritten pleadings.
Court may stay order upon undertaking for payment to affected employees.

Powers to Administer Oaths, Subpoenas, and Evidence

Secretary of Labor/Wage Board Chair can administer oaths, take deposition, subpoena witnesses, and require documents.
Failure to comply results in contempt proceedings.
No refusal to testify on self-incrimination grounds but protects against prosecution except for perjury.

Special Provisions for Learners, Apprentices, and Handicapped Workers

Learners/apprentices may be employed at no less than 75% of minimum wage for up to one year under certificates.
Handicapped workers may be employed at no less than 50% of minimum wage.
Nautical learners/apprentices may work without compensation.

Payment of Wages

Wages must be paid in legal Philippine tender.
Payment by bank check or postal money order allowed where customary or necessary.
Direct payment to employees, except for approved insurance premium deduction, force majeure, or authorized union check-offs.
Wages of deceased employees payable to heirs upon affidavit, with Secretary’s representative as referee.
Employers prohibited from compelling use of their stores or services.
Deductions limited and regulated – require prior Secretary approval and must be fair, reasonable, and justified.
Strict prohibition against wage kickbacks or withholding by any person.
Wages paid at least bi-monthly; special rules for piece-rate workers.
Employer responsible for contractors’ payroll compliance and may require bonds.
Employers must notify employees of wage conditions at hiring and changes thereof.

Regulatory Powers of the Secretary of Labor

May issue, amend, or rescind regulations/orders to implement the Act.
Regulations to prevent evasion, define terms, and address industrial homework.
Public hearing required for regulations on industrial homework.
Regulations effective upon publication and subject to court review.

Administration and Enforcement

Creation of the Wage Administration Service under Department of Labor.
Transfer of functions from Wage Claims Division to new service.
Secretary may appoint employees as needed.
Use of government agencies and voluntary services authorized.
Chief of Wage Administration Service enforces Act and orders.
Employers must post abstracts of law and wage orders.
Employers must keep detailed wage and employment records.
Authorized representatives may inspect records and interview employees.

Protection Against Discrimination

Unlawful to discharge or discriminate against any employee filing complaints, testifying, or serving on Wage Board.

False Reporting

Penalizes knowingly false statements or reports related to the Act.

Penalties and Wage Recovery

Fines up to P2,000 and/or imprisonment up to one year for willful violations.
Responsibility extends to managers or persons in charge.
Secretary authorized to supervise unpaid wages and bring recovery actions.
Recovered sums held in special account and paid to employees.
Employer liable for wage underpayments with interest and reasonable attorney’s fees.
Court-supervised payment and restrictions on attorney’s fees.

Jurisdiction of Courts

Courts of First Instance can restrain violation and hear wage recovery cases.
Decisions must be rendered within 15 days.
Court of Industrial Relations may hear wage disputes lacking wage orders.
Procedures for strikes involving minimum wage issues outlined.
Court decisions based on substantial evidence and subject to certiorari appeal.

Statute of Limitations

Actions under the Act must be commenced within three years after cause of action accrues.

Protection of Government Personnel

Government enforcement personnel appointed under Civil Service rules.
Restrictions on employment and affiliations during tenure.
Summary dismissal and criminal action for bribery.
Removability upon malfeasance or nonfeasance.

Relation to Other Labor Laws

Does not eliminate rights to fair wages, shorter hours, or better conditions.
Does not justify violation of other labor laws or reduction of existing wages above minimum.

Supersession of Agreements

Workers or organizations cannot waive rights or accept lower wages or benefits than Act requires.

Reporting and Appropriations

Secretary of Labor must submit annual report to President and Congress.
Appropriation of P150,000 initially for implementation costs, with subsequent allocations yearly.

Repeal and Separability

Prior inconsistent laws are repealed.
Invalid provisions do not affect remaining parts of the Act.

Effective Date

Act takes effect 120 days after enactment.
Personnel appointment and administrative preparations may begin immediately.