Minimum Wage

Summary

▪ The law prescribes a minimum wage required to be observed by the employers.

▪ The minimum wage varies per region as it is set by the Regional Tripartite Wages and Productivity Board (RTWPB)

▪ Violations of minimum wage may result in double indemnity and/or criminal liability.

▪ The RTWPB may provide for exemptions, including those for Barangay Micro Business Enterprises.

▪ Minimum wage earners are exempt from income tax.

1. Concept

A minimum wage is a legal mandate for employers to pay their employees a compensation which should not be less than that prescribed by the Regional Tripartite Wages and Productivity Board (RTWPB) in the different regions.

Hence, every region will have its own minimum wage as several factors are considered in determining the amount, such as cost of living allowance, prices of goods and commodities, and so on.

Further, the same Board prescribes a different minimum wage depending on the industry classification, i.e. non-agricultural, agricultural, retail and service establishments, and manufacturing.

The Board issues Wage Orders containing the prescribed minimum wage at a given time, including the requirements and procedures for exemption thereof. If granted, an establishment may be exempted from complying with the minimum wage for a period of one (1) year.

It is recommended for an employer to inquire with the RTWPB for the prevailing rates.

2. Violatio...

 



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