Minimum wage for employees: What’s your work worth?

[Atty. Karen Jimeno hosts CNN Philippines’ Legal Help Desk every Tuesdays at 9:30 p.m. She is a practicing attorney licensed in the Philippines and in New York. She is also a professor of law. For legal advice, you may send your questions to legalhd@cnnphilippines.com.]

May 1 is Labor Day in the Philippines, a holiday dedicated to recognize the importance and contribution of workers. In other countries like the United States, Labor Day is meant to recognize the economic and social achievements of workers.

The value of workers is also recognized through entitlements and benefits which Philippine labor laws grant to employees.

Basic entitlements of employees in the Philippines include, among others, the right to be paid wages and the right to receive benefits through coverage under the Philippine Social Security System, Philippine Health Insurance Corp/, and the Home Development Mutual Fund (also known as the PAG-IBIG Fund).

When it comes to wages, employees in the Philippines must be paid no less than the minimum wage imposed by the applicable Regional Tripartite Wages and Productivity Board (or the Regional Wage Boards) in their respective regions.

For instance, the current minimum wage in the National Capital Region is P481 per day.

Bert, an employee from Pampanga, called Legal Help Desk (a current affairs program on CNN Philippines) to seek legal advice.

As an operations manager for a company, Bert was receiving a salary of P6,000 per month. In Pampanga, the current minimum wage is P349 per day (if the employer has assets worth P30 million or more) or P342 per day (if the employer has assets less than P30 million).

Obviously, Bert’s salary rate was below minimum wage — averaging only P230 per day for 26 working days per month, or P272 per day for 22 working days per month. Bert recently resigned from his company because his monthly salary was inadequate to support himself and his family.

Bert’s employer may be held liable for underpayment of wages. Even if Bert voluntarily resigned from his company, he may still claim from his employer the difference between the actual amount he received as salaries and the amount which he should have received under the applicable minimum wage in his region.

Employees receiving less than the mandatory minimum wage may file a claim with the regional director of the Department of Labor and Employment (DOLE) of the region where their workplace is located.

The DOLE regional director has jurisdiction if the money claim does not exceed P5,000 and if the claim does not involve”illegal dismissal” (i.e., if the employee was dismissed or fired from the job without just cause).

Employees must file their claim with a labor arbiter of the National Labor Relations Commission (NLRC) if the claim exceeds P5,000 or, regardless of the amount, if the claim involves illegal dismissal.

Bert mentioned his employment in Pampanga lasted for about one year. Assuming that Bert worked for 12 months, his claim against his former employer would approximately amount to P35,000. This means that even if Bert’s case does not involve illegal dismissal because he voluntarily resigned, he should file his claim with a Labor Arbiter of the NLRC.

An important point to remember here is that an employee may still file claims against an employer even after their employer-employee relationship has ended. Furthermore, belated claims will not defeat the right of an employee to receive the deficiency.

The Supreme Court has ruled in previous cases that an employee who previously received salaries lower than the minimum wage without objection is not precluded from suing for the difference. Employees who accept lower wages than the minimum set by law are entitled to receive the deficiency.

What if an employer cannot afford to pay the minimum wage?

Just as in shopping at a store with a fixed price, there is no room for a discount. Employers are not excused from paying lower wage rates because of their inadequate financial condition. The Supreme Court stated in a case that the payment of the minimum wage is a mandatory obligation that is not dependent upon one’s ability to pay.

Employers are exempted from paying the mandatory minimum wage only with respect to certain types of employees, such as:

household or domestic helpers, including family drivers (household helpers or kasambahays are covered by the minimum wage rates prescribed under the Kasambahay Law)
homeworkers engaged in needlework
workers employed in establishments registered with the National Cottage Industries and Development Authority
workers of registered cooperatives as approved by the Secretary of DOLE
Wage Orders of the Regional Wage Boards may also provide for other exemptions.

Failure to pay the required minimum wage entails serious penalties. The employer may be punished with a fine of at least P25,000 to P100,000 and/or imprisonment of at least two years to four years.

In addition, the employer will be ordered to pay double the amount due to the employee. The payment of the deficient amount to the employee will not absolve the employer from criminal liability.

If the violating employer is a corporation, partnership, or other type of entity, the responsible officers (such as the president, vice-president, chief executive officer, or general manager) may be imprisoned.

Businesswoman Anne Mulcahy said “employees are a company’s greatest asset.” Logic dictates that we shouldn’t underpay for a good asset, but Philippine labor laws ensure that employees are not underpaid or undervalued. This is not only good business sense, but, more importantly, a recognition of the invaluable worth of laborers as human beings. –Karen Jimeno, for CNN Philippines