Labor Law: Implementing Rules of Labor Code Book III (Rule VII-VIII)

    

         Rule VII

WAGES

SECTION 1. Minimum wages. – 

(a) The minimum wage rates for agricultural and nonagricultural employees shall be as follows, unless otherwise revised by a duly issued wage order or other authoritative issuance by a competent authority:

        (1) Eight pesos a day for nonagricultural workers;

        (2) Four pesos and seventy-five centavos for agricultural employees;

        (3) Six pesos a day for employees of retail or service enterprises that do not regularly employ more than five employees;

        (4) Eight pesos a day for employees of the National government and all government-owned and/or controlled corporations;

        (5) Five pesos a day for employees of provinces, municipalities and cities or the minimum wages being paid to them at the time of the approval of R.A. No. 6129 on 17 June 1970.

The minimum wage rates in industries prescribed by duly issued wage orders shall remain effective unless otherwise revised by competent authority.

(b) The basis of the minimum wage rates prescribed herein is understood to be not more than eight hours of work in a day. [Note: Minimum wage rates are prescribed in wage orders issued periodically by regional wage boards; see R.A. No. 6727, June 9, 1989.]

SEC. 2. Minimum wages in depressed areas. – 

To the extent necessary to relieve serious unemployment situation in welfare areas, such as squatter relocation centers, the Secretary of Labor may, on his own initiative or upon petition of any interested party, authorize the payment of subminimum wages by enterprises and institutions that may be established in such areas to provide employment opportunities to the residents therein. The authorization of the Secretary of Labor shall be subject to such terms and conditions as he may prescribe to insure the protection and welfare of the workers as well as the industries that may be affected thereby.

SEC. 3. Coverage. –

This Rule shall not apply to the following persons:

        (a) Household or domestic helpers (See Kasambahay Law, R.A. No. 10361), including family drivers and persons in the personal service of another; 

        (b) Homeworkers engaged in needlework;

        (c) Workers employed in any establishment duly registered with the National Cottage Industries and Development Authority in accordance with R.A. No. 3470, provided that such workers perform the work in their respective homes;

        (d) Workers in any duly registered cooperative when so recommended by the Bureau of Cooperative Development and upon approval of the Secretary of Labor; Provided, however, That such recommendation shall be given only for the purpose of making the cooperative viable and upon finding and certification of said Bureau, supported by adequate proof, that the cooperative cannot resort to other remedial measures without serious loss or prejudice to its operation except through its exemption from the requirements of this Rule. The exemption shall be subject to such terms and conditions and for such period of time as the Secretary of Labor may prescribe.

Rule VII-A

WAGES

(Memorandum Circular No. 2, November 4, 1992)

SECTION 1. Cash wage. — 

The minimum wage rates prescribed in Section 1 hereof shall be basic, cash wages without deducting therefrom whatever benefits, supplements or allowances which the employees enjoy free of charge aside from the basic pay. An employer may provide subsidized meals and snacks to his employees provided that the subsidy shall not be less than 30% of the fair and reasonable value of such facilities. In such case, the employer may deduct from the wages of the employees not more than 70% of the value of the meals and snacks enjoyed by the employees, provided that such deduction is with the written authorization of the employees concerned.

SEC. 2. Facilities. – 

The term “facilities” as used in this Rule shall include articles or services for the benefit of the employee or his family but shall not include tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the employer’s business.

SEC. 3. Value of facilities. –  

The Secretary of Labor may from time to time fix in appropriate issuances the fair and reasonable value of board, lodging, and other facilities customarily furnished by an employer to his employees both in agricultural and non-agricultural enterprises.

The fair and reasonable value of facilities is hereby determined to be the cost of operation and maintenance, including adequate depreciation plus reasonable allowance (but not more than 5 1/2 % interest on the depreciated amount of capital invested by the employer): provided that if the total so computed is more than the fair rental value (or the fair price of the commodities or facilities offered for sale) the fair rental value shall be the reasonable cost of the operation and maintenance. The rate of depreciation and depreciated amount computed by the employer shall be those arrived at under good accounting practices.

The term “good accounting practices” shall not include accounting practices which have been rejected by the Bureau of Internal Revenue for income tax purposes. The term “depreciations” shall include obsolescence.

SEC. 4. Acceptance of facilities. – 

In order that the cost of facilities furnished by the employer may be charged against an employee, his acceptance of such facilities must be voluntary.

SEC. 5. Payment by results. – 

(a) On petition of any interested party, or upon its initiative, the Department of Labor shall use all available devises, including the use of time and motion studies and consultation with representatives of employers’ and workers’ organizations, to determine whether the employees in any industry or enterprise are being compensated in accordance with the minimum wage requirements of this Rule.

(b) The basis for the establishment of rates for piece, output or contract work shall be the performance of an ordinary worker of minimum skill or ability.

(c) An ordinary worker of minimum skill or ability is the average worker of the lowest producing group representing 50% of the total number of employees engaged in similar employment in a particular establishment excluding learners, apprentices and handicapped workers employed therein.

(d) Where the output rates established by the employer do not conform with the standards prescribed herein, or with the rates prescribed by the Department of Labor in an appropriate order, the employees shall be entitled to the difference between the amount to which they are entitled to receive under such prescribed standards or rates and that actually paid them by the employer.

SEC. 6. Payment by results in government projects. – 

In government projects, payment of wages by results, such as payment on pakiaw, task, or piece work basis, may be used by employers: Provided, however, That the output rates shall be in accordance with the standards prescribed in the immediately preceding Section, whenever applicable, or with such rates as may be established by the Department of Labor.

Rule VIII

PAYMENT OF WAGES

SECTION 1. Manner of wage payment. – 

As a general rule, wages shall be paid in legal tender and the use of tokens, promissory notes, vouchers, coupons or any other form alleged to represent legal tender is absolutely prohibited even when expressly requested by the employee.

SEC. 2. Payment by check. – 

Payment of wages by bank checks, postal checks or money orders is allowed where such manner of wage payment is customary on the date of the effectivity of the Code, where it is stipulated in a collective agreement, or where all of the following conditions are met:

        (1) There is a bank or other facility for encashment within a radius of one (1) kilometer from the workplace;

        (2) The employer, or any of his agents or representatives, does not receive any pecuniary benefit directly or indirectly from the arrangement;

        (3) The employees are given reasonable time during banking hours to withdraw their wages from the bank which time shall be considered as compensable hours worked if done during working hours; and

        (4) The payment by check is with the written consent of the employees concerned if there is no collective agreement authorizing the payment of wages by bank checks.

SEC. 3. Time of payment. – 

        (a) Wages shall be paid not less often than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days, unless payment cannot be made with such regularity due to force majeure or circumstances beyond the employer’s control, in which case the employer shall pay the wages immediately after such force majeure or circumstances have ceased.

        (b) In case of payment of wages by results involving work which cannot be finished in two (2) weeks, payment shall be made at intervals not exceeding sixteen (16) days in proportion to the amount of work completed. Final settlement shall be made immediately upon completion of the work.

SEC. 4. Place of payment. – 

    (a) As a general Rule, the place of payment shall be at or near the place of undertaking. Payment in a place other than the workplace shall be permissible only under the following circumstances:

        (1) When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions, or by reason of actual or impending emergencies caused by fire, flood epidemic or other calamity rendering payment thereat impossible;

        (2) When the employer provides free transportation to the employees back and forth; and

        (3) Under any other analogous circumstances, provided that the time spent by the employees in collecting their wages shall be considered as compensable hours worked.

(b) No employer shall pay his employees in any bar, night or day club, drinking establishment, massage clinic, dance hall or other similar places or in places where games are played with stakes of money or things representing money except in the case of persons employed in said places.

SEC. 5. Direct payment of wages. – 

Payment of wages shall be made direct to the employee entitled thereto except in the following cases:

    (a) Where the employer is authorized in writing by the employee to pay his wages to a member of his family;

    (b) Where payment to another person of any part of the employee’s wages is authorized by existing law, including payments for the insurance premiums of the employee and union dues where the right to check-off has been recognized by the employer in accordance with a collective agreement or authorized in writing by the individual employees concerned; or

    (c) In case of death of the employee as provided to the succeeding section.

SEC. 6. Wages of deceased employee. – 

The payment of the wages of a deceased employee shall be made to his heirs without the necessity of intestate proceedings. When the heirs are of age, they shall execute an affidavit attesting to their relationship to the deceased and the fact that they are his heirs to the exclusion of all other persons. In case any of the heirs is a minor, such affidavit shall be executed in his behalf by his natural guardian or next of kin. Upon presentation of the affidavit to the employer, he shall make payment to the heirs as representative of the Secretary of Labor.

SEC. 7. Payment of and other monetary claims in case of bankruptcy. – 

In case of bankruptcy or liquidation of the employer’s business, the unpaid wages and other monetary claims of the employees shall be given first preference and shall be paid in full before the claims of government and other creditors may be paid. (As amended by Section 1 of the Rules and Regulations Implementing RA No. 6715, approved by Secretary of Labor and Employment Franklin M. Drilon on May 24, 1989.)

SEC. 8. Attorney’s fees. – 

Attorney’s fees in any judicial or administrative proceedings for the recovery of wages shall not exceed 10% of the amount awarded. The fees may be deducted from the total amount due the winning party.

SEC. 9. Noninterference in disposal of wages. — 

No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages and no employer shall in any manner oblige any of his employees to patronize any store or avail of the services offered by any person.

SEC. 10. Wage deduction. – 

Deductions from the wages of the employees may be made by the employer in any of the following cases:

    (a) When the deductions are authorized by law, including deductions for the insurance premiums advanced by the employer in behalf of the employee as well as union dues where the right to check-off has been recognized by the employer or authorized in writing by the individual employee himself;

    (b) When the deductions are with the written authorization of the employees for payment to a third person and the employer agrees to do so. provided that the latter does not receive any pecuniary benefit, directly or indirectly from the transaction.

SEC. 11. Deductions for loss or damages. – 

Where the employer is engaged in a trade, occupation or business where the practice of making deductions or requiring deposits is recognized, to answer for the reimbursement of loss or damage to tools, materials, or equipment supplied by the employer to the employee, the employer may make wage deductions or require the employees to make deposits from which deductions shall be made, subject to the following conditions:

    (a) That the employee concerned is clearly shown to be responsible for the loss of damage;

    (b) That the employee is given reasonable opportunity to show cause why deduction should not be made;

    (c) That the amount of such deductions is fair and reasonable and shall not exceed the actual loss or damage; and

    (d) That the deduction from the wages of the employee does not exceed 20% of the employee’s wages in a week.

[The following Department Order No. 18-A, Series of 2011 supersedes D.O. No. 18-02 of November 2002.]