DoLE urges employers to correct wage distortion

MANILA, Philippines—The Department of Labor and Employment (DoLE) has urged establishments covered by new wage orders to quickly adjust their wage structures to correct any wage distortions.

“RA 6727 or the Minimum Wage Fixing Law provides for methods for correcting wage distortions, and companies and establishments should readily avail of these methods to avoid unnecessary disputes,” a statement of the DoLE said.

The provision for correcting wage distortions is also stipulated in all wage orders being issued by the Regional Tripartite Wages and Productivity Boards (RTWPBs), it added.

The DoLE cautioned that if the “distortion” in the salary rates of workers is not corrected, it could lead to demoralization that, in turn, could disrupt the harmonious work relationships between and among workers and employers in the establishments. This could then affect productivity in the workplace.

The National Wages and Productivity Commission (NWPC) has suggested formulas to address wage distortion. One of the suggested formulas is by computing the previous minimum wage over the worker’s current daily rate multiplied by the amount of the latest mandated wage increase.

Wage “distortion” occurs when the usual differentials in wage rates between groups of employees in an establishment are drastically reduced or eliminated due to mandated wage increases. This means that the differences in wage structure based on skills, length of service, or other logical bases of differentiation may be eliminated if the other employees already receiving more than the minimum wage will not also have a corresponding increase in their salaries. Restoring a substantial or significant gap, as against the historical wage differentials, is allowed under existing jurisprudence.

In unionized firms, the employer and the union should negotiate to correct the distortion using the grievance procedures in the collective bargaining agreement or CBA or, if the dispute remains unresolved, through voluntary arbitration

To date, the minimum wages have been adjusted in eight regions, namely, NCR (Metro Manila) and in Regions VI (Western Visayas); VII (Central Visayas); IX (Zamboanga Peninsula ); X (Northern Mindanao; XI ( Southern Mindanao ); XIII (Caraga); and in the Autonomous Region in Muslim Mindanao. –INQUIRER.net

For more details on wage distortion, please contact the NWPC at 527-5522 or 527-5139 and www.nwpc.gov.ph.