SECTION 1. Coverage. — The wage increase prescribed under the Act shall apply to all workers and employees in the private sector regardless of their position, designation or status, and irrespective of the method by which their wages are paid, except:
a) Household or domestic helpers, including family drivers and workers in the personal service of another;
b) Workers and employees in retail/service establishments regularly employing not more than 10 workers, when exempted from compliance with the Act, for a period fixed by the Commission/Boards in accordance with Section 4 (c) of the Act and Section 15, Chapter 1 of these Rules;
c) Workers and employees in new business enterprises outside the National Capital Region and export processing zones for a period of not more than two or three years, as the case may be, from the start of operations when exempted in accordance with Section 5 of the Act and Section 15, Chapter I of these Rules;
d) Workers and employees receiving a basic wage of more than P100.00 per day.
SECTION 2. Effectivity. — The Act takes effect on July 1, 1989, 15 days following its complete publication in two newspapers of general circulation on June 15, 1989 pursuant to Section 15 thereof.
SECTION 3. Amount of Minimum Wage Increase. — Effective July 1, 1989, the daily statutory minimum wage rates of covered workers and employees shall be increased as follows:
a) P25.00 for those in the National Capital Region;
b) P25.00 for those outside the National Capital Region, except for the following:
P20.00 for those in plantation agricultural enterprises with an annual gross sales of less than P5 million in the fiscal year immediately preceding the effectivity of the Act;
P15.00 for those in the following enterprises:
1. Non-plantation agriculture
2. Cottage/handicraft
3. Retail/Service regularly employing not more than 10 workers
4. Business enterprises with a capitalization of not more than P500,000 and employing not more than 20 workers.
SECTION 4. When Wage Increase Due Other Workers. — a) All workers and employees who, prior to July 1, 1989, were already receiving a basic wage above the statutory minimum wage rates provided under Republic Act 6640 but not over P100.00 per day shall receive a wage increase equivalent to that provided in the preceding Section.
b) Those receiving not more than the following monthly basic wage rates prior to July 1, 1989 shall be deemed covered by the preceding subsection:
(i) P3,257.50 — where the workers and employees work everyday, including premium payments for Sundays or rest days, special days and regular holidays.
(ii) P3,041.67 — where the workers and employees do not work but considered paid on rest days, special days and regular holidays.
(iii) P2,616.67 — where the workers and employees do not work and are not considered paid on Sundays or rest days.
(iv) P2,183.33 — where the workers and employees do not work and are not considered paid on Saturdays and Sundays or rest days.
c) Workers and employees who, prior to July 1, 1989, were receiving a basic wage of more than P100.00 per day or its monthly equivalent, are not by law entitled to the wage increase provided under the Act. They may however, receive wage increases through the correction of wage distortions in accordance with Section 16, Chapter I of these Rules.
SECTION 5. Daily Statutory Minimum Wage Rates. — The daily minimum wage rates of workers and employees shall be as follows:
Sector/Industry Under Under
R. A. 6640 R. A. 6727
(Effective (Effective
Dec. 14, July 1,
1987) 1989)
A. NATIONAL CAPITAL REGION
Non-Agriculture P64.00 P89.00
Agriculture
Plantation 54.00 79.00
Non-Plantation 43.50 68.50
Cottage/Handicraft
Employing more than 30
workers 52.00 77.00
Employing not more than
30 workers 50.00 75.00
Private Hospitals
With bed capacity of more
than 100 64.00 89.00
With bed capacity of 100
or less 60.00 85.00
Retail/Service
Employing more than 15
workers 64.00 89.00
Employing 11 to 15
workers 60.00 85.00
Employing not more than
10 workers 43.00 68.00
B. OUTSIDE NATIONAL CAPITAL REGION
Non-Agriculture 64.00 89.00
Agriculture
Plantation with annual gross
sales of P5M or more 54.00 79.00
Plantation with annual gross
sales of less than P5M 54.00 74.00
Non-plantation 43.50 58.50
Cottage/Handicraft
Employing more than
30 workers 52.00 67.00
Employing not more
than 30 workers 50.00 65.00
Private Hospitals 60.00 85.00
Retail/Service
Cities w/ population of more
than 150,000
Employing more than
15 workers 64.00 89.00
Employing 11 to 15 workers 60.00 85.00
Employing not more than
10 workers 43.00 58.00
Sugar Mills
Agriculture
Plantation w/ annual gross
sales of P5M or more 48.50 73.50
Plantation w/ annual gross
sales of less than P5M 48.50 68.50
Non-plantation 43.50 58.50
Business Enterprises w/ Capitalization
of not more than P500,000 and
employing not more than 20 workers
Non-Agriculture 64.00 79.00
Agriculture Plantation
Products Other than Sugar 54.00 69.00
Sugar 48.50 63.50
Private Hospitals 60.00 75.00
Retail/Service
Cities w/ population of more
than 150,000
Employing more than
15 workers 64.00 79.00
Employing 11 to 15 workers 60.00 75.00
Municipalities and Cities
w/ population of not more
than 150,000
Employing more than 10
workers 60.00 75.00
SECTION 6. Suggested Formula in Determining the Equivalent Monthly Statutory Minimum Wage Rates. — Without prejudice to existing company practices, agreements or policies, the following formula may be used as guides in determining the equivalent monthly statutory minimum wage rates:
a) For those who are required to work everyday including Sundays or rest days, special days and regular holidays:
Equivalent Applicable daily wage rate (ADR) x 390.90 days
Monthly = ———————————————————
Rate (EMR) 12
Where 390.90 days =
302 days Ordinary working days
20 days 10 regular holidays x 200%
66.30 days 51 rest days x 130%
2.60 days 2 special days x 130%
390.90 days Total equivalent number of days.
b) For those who do not work but considered paid on rest days, special days and regular holidays:
ADR x 365 days
EMR = ————————
12
Where 365 days =
302 days Ordinary working days
51 days Rest days
10 days Regular holidays
2 days Special days
365 days Total equivalent number of days
c) For those who do not work and are not considered paid on Sundays or rest days:
ADR x 314 days
EMR = ———————
12
Where 314 days =
302 days Ordinary working days
10 days Regular holidays
2 days Special days (If considered
paid; If actually worked,
this is equivalent to 2.6 days)
314 days Total equivalent number of days
d) For those who do not work and are not considered paid on Saturdays or rest days:
ADR x 262 days
EMR = ———————
12
Where 262 days =
250 days Ordinary working days
10 days Regular holidays
2 days Special days (If considered paid; If actually
worked, this is equivalent to 2.6 days)
262 days Total equivalent number of days
Note: For workers whose rest days fall on Sundays, the number of rest days in a year is reduced from 52 to 51 days, the last Sunday of August being a regular holiday under Executive Order No. 201. For purposes of computation, said holiday, although still a rest day for them, is included in the ten regular holidays. For workers whose rest days do not fall on Sundays, the number of rest days is 52 days, as there are 52 weeks in a year.
Nothing herein shall be considered as authorizing the reduction of benefits granted under existing agreements or employer practices/policies.
SECTION 7. Basis of Minimum Wages Rates. — The statutory minimum wage rules prescribed under the Act shall be for the normal working hours, which shall not exceed eight hours work a day.
SECTION 8. Creditable Wage Increase. —
a) No wage increase shall be credited as compliance with the increases prescribed under the Act unless expressly provided under collective bargaining agreements; and, such wage increase was granted not earlier than April 1, 1989 but not later than July 1, 1989. Where the wage increase granted is less than the prescribed increase under the Act, the employer shall pay the difference.
b) Anniversary wage increase provided in collective agreements, merit wage increase, and those resulting from the regularization or promotion of employees shall not be credited as compliance thereto.
SECTION 9. Workers Paid by Results. —
a) All workers paid by results, including those who are paid on piecework, takay, pakyaw, or task basis, shall receive not less than the applicable statutory minimum wage rates prescribed under the Act for the normal working hours which shall not exceed eight hours work a day, or a proportion thereof for work of less than the normal working hours.
The adjusted minimum wage rates for workers paid by results shall be computed in accordance with the following steps:
1) Amount of increase in AMW - Previous AMW x 100 = % Increase;
2) Existing rate/piece x % increase = increase in rate/piece;
3) Existing rate/piece + increase in rate/piece = Adjusted rate/piece.
Where AMW is the applicable minimum wage rate.
b) The wage rates of workers who are paid by results shall continue to be established in accordance with Article 101 of the Labor Code, as amended and its implementing regulations.
SECTION 10. Wages of Special Groups of Workers. — Wages of apprentices, learners and handicapped workers shall in no case be less than 75 percent of the applicable statutory minimum wage rates.
All recognized learnership and apprenticeship agreements entered into before July 1, 1989 shall be considered as automatically modified insofar as their wage clauses are concerned to reflect the increases prescribed under the Act.
SECTION 11. Application to Contractors. — In the case of contracts for construction projects and for security, janitorial and similar services, the prescribed wage increases shall be borne by the principals or clients of the construction/service contractors and the contract shall be deemed amended accordingly. In the event, however, that the principal or client fails to pay the prescribed wage rates, the construction/service contractor shall be jointly and severally liable with his principal or client.
SECTION 12. Application to Private Educational Institution. — Private educational institutions which increased tuition fees beginning school year 1989-1990 shall comply with the P25.00 per day wage increase prescribed under the Act effective as follows:
a) In cases where the tuition fee increase was effected before the effectivity of the Act, the wage increase shall take effect only July 1, 1989.
b) In cases where the tuition fee increase was effected on or after the effectivity of the Act, the wage increase shall take effect not later than the date the school actually increased tuition but in the latter case, such wage increase may not be made retroactive in July 1, 1989.
Beginning school year 1990-1991, all schools shall implement the wage increase regardless of whether or not they have actually increased tuition fees.
SECTION 13. Mobile and Branch Workers. — The statutory minimum wage rates of workers, who by the nature of their work have to travel, shall be those applicable in the domicile or head office of the employer.
The minimum wage rates of workers working in branches or agencies of establishments in or outside the National Capital Region shall be those applicable in the place where they are stationed.
SECTION 14. Transfer of Personnel. — The transfer of personnel to areas outside the National Capital Region shall not be a valid ground for the reduction of the wage rates being enjoyed by the workers prior to such transfer. The workers transferred to the National Capital Region shall be entitled to the minimum wage rate applicable therein.
SECTION 15. Exemptions. —
a) The following establishments may be exempted from compliance with the wage increase prescribed under the Act:
1) Retail/Service establishments regularly employing not more than 10 workers upon application with and as determined by the appropriate Board in accordance with applicable guidelines to be issued by the Commission.
2) New business enterprises that may be established outside the National Capital Region and export processing zones from July 1, 1989 to June 30, 1993, whose operation or investments need initial assistance may be exempted for not more than three years from the start of operations, subject to guidelines to be issued by the Secretary in consultation with the Department of Trade and Industry and the Department of Agriculture.
New business enterprises in Region III (Central Luzon) and Region IV (Southern Tagalog) may be exempted for two years only from start of operations, except those that may be established in the provinces of Palawan, Oriental Mindoro, Occidental Mindoro, Marinduque, Romblon, Quezon and Aurora, which may also be exempted for not more than three years from the start of operations.
b) Whenever an application for exemption has been duly filed with the appropriate office in the Department/Board, action by the Regional Office of the Department on any complaints for alleged non-compliance with the Act shall be deferred pending resolution of the applicant for exemption.
c) In the event that the application for exemption is not granted, the workers and employees shall receive the appropriate compensation due them as provided for under the Act plus interest of one percent per month retroactive to July 1, 1989 or the start of operations whichever is applicable.
SECTION 16. Effects on Existing Wage Structure. — Where the application of the wage increase prescribed herein results in distortions in the wage structure within an establishment which gives rise to a dispute therein, such dispute shall first be settled voluntarily between the parties. In the event of a deadlock, such dispute shall be finally resolved through compulsory arbitration by the regional arbitration branch of the National Labor Relations Commission (NLRC) having jurisdiction over the workplace.
The NLRC shall conduct continuous hearings and decide any dispute arising from wage distortions within twenty calendar days from the time said dispute is formally submitted to it for arbitration. The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of the increases in the wage rates prescribed under the Act.
Any issue involving wage distortion shall not be a ground for a strike/lockout.
SECTION 17. Complaints for Non-Compliance. — Complaints for non-compliance with the wage increases prescribed under the Act shall be filed with the Regional Offices of the Department having jurisdiction over the workplace and shall be the subject of enforcement proceedings under Articles 128 and 129 of the Labor Code, as amended.
SECTION 18. Conduct of inspection by the Department. — The Department shall conduct inspections of establishments, as often as necessary, to determine whether the workers are paid the prescribed wage rates and other benefits granted by law or any Wage Order. In the conduct of inspection in unionized companies, Department inspectors shall always be accompanied by the president or other responsible officer of the recognized bargaining unit or of any interested union. In the case of non-unionized establishments, a worker representing the workers in the said company shall accompany the inspector.
The worker's representative shall have the right to submit his own findings to the Department and to testify on the same if he does not concur with the findings of the labor inspector.
SECTION 19. Payment of Wages. — Upon written petition of the majority of the workers and employees concerned, all private establishments, companies, businesses and other entities with at least twenty workers and located within one kilometer radius to a commercial, savings or rural bank, shall pay the wages and other benefits of their workers through any of said banks, within the period and in the manner and form prescribed under the Labor Code as amended.
SECTION 20. Duty of Bank. — Whenever applicable and upon request of concerned worker or union, the bank through which wages and other benefits are paid issue a certification of the record of payment of said wages and benefits of a particular worker or workers for a particular payroll period.
