Two-tiered wage system in the offing

The Philippines is now in a transition to a two-tiered wage system with the effectivity of the wage order of the Regional Tripartite Wage and Productivity Board-Region IV-A (Southern Tagalog), according to Labor Secretary Rosalinda Baldoz.

“The Philippines is definitely in a transition to a two-tiered wage system, which offers better protection to minimum wage earners,” the labor chief said.

Baldoz said a productivity-based wage system is central to the wage rationalization law, adding that even Barangay Micro Business Enterprises (BMBEs) will benefit from the two-tiered system.

The two-tiered wage system consists of a fixed floor wage or entry-level wage for new entrants and low-skilled workers, and a flexible wage above the floor based on workers’ productivity and industry or enterprise performance, which may be negotiated between the employer and the workers.

The wage reforms seek to upgrade the existing minimum wage- setting in the country, Baldoz said. The reforms are meant to minimize the unintended outcomes of mandated minimum wages, improve the coverage of the vulnerable sectors, and promote productivity improvement and gain-sharing, she said.

The National Tripartite Industrial Peace Council endorsed and supported the reforms.

The Wage Order 15 in Southern Tagalog set the regional floor wage at P255, with a conditional temporary productivity allowance (CTPA) of P12.50 for workers already receiving more than P255.

Under the new wage order, the adjustments in current minimum wage level shall be as follows:

(a) In non-agriculture sector, the lowest minimum wage level of P253 in 2011 will increase to P255 in 2012;

(b) In agriculture sector, from P213 to P250 to a range of P231 to P255; and,

(c) In retail and service establishments with 10 workers or less, from P165 to P232 to a range of P183 to P208. –Vito Barcelo, Manila Standard Today