National Minimum Wage Act

TWENTIETH CONGRESS OF THE ) First Regular Session 25 JUL - 3 P5:48 S.B. No. — NICE SENATE 11 Introduced by SENATOR IMEE R. MARCOS AN ACT ESTABLISHING A NATIONAL MINIMUM WAGE FOR PRIVATE SECTOR WORKERS, IMPOSING STRICTER PENALTIES FOR VIOLATIONS THEREOF, AND AMENDING FOR THIS PURPOSE PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE "LABOR CODE OF THE PHILIPPINES" EXPLANATORY NOTE Article XIII Section 3 of the 1987 Constitution states that workers, "shall be entitled to security of tenure, humane conditions of work, and a living wage." Article XV Section 3 further says that the State shall defend the right of the family to a living wage. The enactment of Republic Act No. 6727, also known as the "Wage Rationalization Act" in 1989 resulted in the abandonment of legislating national minimum wage and established the mechanism of regionalized wage setting and wage increases via regional wage boards. However, instead of the decentralizing growth to the countryside, the system preserves the economic inequality between the poor regions and Metro Manila and resultantly perpetuates the poverty of these poor regions and their workers. This measure seeks to establish a national minimum wage rate and abolish the Regional Tripartite Wages and Productivity Boards, to eliminate the difference in the minimum wage between regions. The National Wages and Productivity Board will be tasked with determining the proper minimum wage for the country through the issuance of wage orders, subject to annual review. Given the abovementioned, the immediate passage of this measure is earnestly sought. MEER. MÁRCOS

TWENTIETH CONGRESS OF THE ) First Regular Session JUL -3 P5:48 SENATE ...- S.B. No. 111 Introduced by SENATOR IMEE R. MARCOS AN ACT ESTABLISHING A NATIONAL MINIMUM WAGE FOR PRIVATE SECTOR WORKERS, IMPOSING STRICTER PENALTIES FOR VIOLATIONS THEREOF, AND AMENDING FOR THIS PURPOSE PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE "LABOR CODE OF THE PHILIPPINES" Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

SECTION 1. This Act shall be known as the "National Minimum Wage Act."

SEC. 2. Article 99 of the Labor Code, as amended, is hereby amended to read

as follows: "ART. 99. [Regional] NATIONAL Minimum Wage[s]. - The NATIONAL minimum wage [rates] for agricultural and non-agricultural employees and workers 7 across the country shall be [those] PRESCRIBED BY THE NATIONAL WAGES 8 AND PRODUCTIVITY BOARD (NWPB) [the Regional Tripartite Wages and Productivity Boards]."

SEC. 3. Creation of the National Wages and Productivity Board. - Articles 120

and 121 of the Labor Code, as amended, are hereby further amended to read as follows: "ART. 120. Creation of the National Wages and Productivity [Commission] BOARD. - There is hereby created a National Wages and Productivity [Commission] BOARD, hereinafter referred to as the [Commission] BOARD, which

shall be attached to the Department of Labor and Employment (DOLE) for policy and program coordination." "ART. 121. Powers and Functions of the [Commission] BOARD. - The [Commission] BOARD shall have the following powers and functions: "(a) To act as the national consultative and advisory body to the President of the Philippines and Congress on matters relating to wages, incomes and productivity; "(b) To formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise, industry and national levels; "(c) To prescribe rules and guidelines for the determination of THE appropriate minimum wage and productivity measures at the [regional, provincial or industry] NATIONAL level[S]; "(D) TO ANNUALLY DETERMINE AND PRESCRIBE ADJUSTMENTS, WHENEVER NECESSARY, TO THE NATIONAL MINIMUM WAGE; "[(d) To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in accordance with prescribed guidelines and national development plans; 1 "[(e)] (E) To undertake studies, researches and surveys necessary for the attainment of its functions and objectives, and to collect and compile data and periodically disseminate information on wages and productivity and other related information, including, but not limited to, employment, cost-of-living, labor costs, investments and returns; ['(f) To review plans and programs of the Regional Tripartite Wages and Productivity Boards to determine whether these are consistent with national development plans;] ["(g) To exercise technical and administrative supervision over the Regional Tripartite Wages and Productivity Boards;] "[h)] (F) To [call, from time to time,] CONVENE a national tripartite conference of representatives of government, workers and employers for the consideration of measures to promote higher wages and improved standards of living. The national tripartite conference on wages shall be convened on an annual basis, or as the situation demands it;

"[i)] (G) To exercise such powers and functions as may be necessary to implement this Act. "The [Commission] BOARD shall be composed of the Secretary of Labor and Employment as ex-officio chairman, the Director-General of the National Economic and Development Authority (NEDA) as ex-officio vice-chairman, and two (2) members each from workers and employers sectors upon recommendation of the Secretary of Labor and Employment to be made on the basis of the list of nominees submitted by the workers and employers sectors, respectively, and who shall serve for a term of five (5) years. The Executive Director of the [Commission] BOARD shall also be a member of the [Commission] BOARD. "The [Commission] BOARD shall be assisted by a Secretariat to be headed by an Executive Director and two (2) Deputy Directors, who shall be appointed by the President of the Philippines, upon the recommendation of the Secretary of Labor and Employment. "The Executive Director shall have the same rank, salary, benefits and other emoluments as that of a Department Assistant Secretary, while the Deputy Directors shall have the same rank, salary, benefits and other emoluments as that of a Bureau Director. The members of the [Commission] BOARD representing labor and management shall have the same rank, emoluments, allowances and other benefits as those prescribed by law for labor and management representatives in the Employees' Compensation Commission."

SEC. 4. Abolition of the Regional Tripartite Wages and Productivity Board. -

Articles 122 and 123 of the Labor Code, as amended, are hereby repealed.

SEC. 5. Standards for National Minimum Wage Fixing. - Article 124 of the

Labor Code is hereby amended and renumbered to read as follows: "ART. [124] 122. - The [regional] NATIONAL minimum wage[s] to be established [by the Regional Board] shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program. In the determination of such

[regionall NATIONAL minimum wage[s], [the Regional Board] the NWPB shall, among other relevant factors, consider the following: (a) The [demand for] RIGHT TO living wage; (b) THE COST FOR PROVIDING THE FOOD, CLOTHING, SHELTER, EDUCATION, HEALTH MAINTENANCE AND OTHER NON-FOOD NECESSITIES FOR RAISING THE FAMILY OF A WORKER; (c) [Wage adjustment vis-a-vis the consumer price index] THE PHYSIOLOGICAL, SOCIAL AND OTHER RELATED NEEDS OF THE WORKERS AND THEIR FAMILIES; (d) [The cost of living and changes or increases therein] MOVEMENTS IN THE CONSUMER PRICE INDEX (CPI); (e) The [needs of workers and their families] COST OF LIVING EXPENSES; [(e) The need to induce industries to invest in the countryside;] [(f)] (F) Improvements in standards of living; AND [(g) The prevailing wage levels;] [(h) Fair return of the capital invested and capacity to pay of employers;] [(F) Effects on employment generation and family income; and] [(G)] (G) The equitable distribution of income and wealth along the imperatives of economic and social development. [The wages prescribed in accordance with the provisions of this Title shall be the standard prevailing minimum wages in every region. These wages shall include wages varying with industries, provinces or localities if in the judgment of the Regional Board, conditions make such local differentiation proper and necessary to effectuate the purpose of this Title.] Any person, company, corporation, partnership or any other entity engaged in business shall file and register annually with the appropriate [Regional Wage Boards, Commission] REGIONAL OFFICE OF THE DEPARTMENT OF LABOR 29 AND EMPLOYMENT and the [National Statistics Office] PHILIPPINE STATISTICS AUTHORITY (PSA), an itemized listing of their labor component, specifying the names of their workers and employees below the managerial level, including learners, apprentices and disabled/handicapped workers who were hired

under the terms prescribed in the employment contracts, and their corresponding salaries and wages.

SEC. 6. Amount of National Minimum Wage (NMW). - Upon effectivity of this

Act, the daily statutory minimum wages of private sector workers in both agricultural and non-agricultural enterprises nationwide shall be those prescribed by the Regional Tripartite Wages and Productivity Board in the National Capital Region on the date this Code takes effect. Provided, that the wage increases arising from the new national minimum wage should not prejudice other wage increases through collective bargaining agreements. The national minimum wage shall be adjusted on an annual basis or whenever a supervening event arises such as extraordinary increase in prices of basic goods and services.

SEC. 7. Terms of Service of the Secretariat of RTWPB. - The terms of service

of the members of the secretariat of each of the regional tripartite wages and productivity board (RTWPB) shall cease upon the effectivity of this Act. The affected personnel hired on a permanent basis and with appointments attested to by the CSC shall be entitled to retirement benefits and separation incentives subject to existing laws and regulations.

SEC. 8. Non-Diminution of Benefits. - Nothing in this Act shall be construed

as to diminish or discontinue existing benefits currently enjoyed whether or not these are granted under collective bargaining agreements (CBA) or present laws.

SEC. 9. Penalties. - Section 12 of Republic Act 6727, which was amended by

Section 1 of Republic Act 8188, is hereby further amended to read as follows:

"Section 12. Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay [any of the prescribed] THEIR WORKERS THE NATIONAL MINIMUM WAGE SET HEREIN AND ANY OF THE SUCCEEDING LEGISLATED WAGE increases or adjustments [in the wage rates] made in accordance with this Act shall be punished by a fine [not less than Twenty-five

thousand pesos (P25,000.00) nor more than One-hundred thousand pesos 2 (P100,000.00)] WHICH SHALL BE FIXED AT ONE HUNDRED PERCENT (100%) OF THE TOTAL AMOUNT OF THE WAGE INCREMENT DUE THE EMPLOYEES TO BE MULTIPLIED BY THE NUMBER OF WORKING DAYS THE WAGE INCREMENT HAS BEEN UNPAID TO THE EMPLOYEES or imprisonment 6 of not less than [two (2)] THREE (3) years nor more than [four (4)] FIVE (5) 7 years, or both such fine and imprisonment at the discretion of the court. Provided, 8 That any person convicted under this Act shall not be entitled to the benefits 9 provided for under the Probation Law. The employer concerned shall be ordered to PAY THE EMPLOYEES MORAL DAMAGES OF FIFTY THOUSAND PESOS (P50,000.00) EACH EMPLOYEE PLUS an amount equivalent to double the unpaid benefits owing to the employees: Provided, That payment of indemnity shall not absolve the employer from the criminal liability imposable under this Act. FURTHERMORE, THE BUSINESS PERMIT OF THE VIOLATING ENTITY SHALL BE SUSPENDED FOR ONE (1) MONTH TO THREE (3) YEARS FOR THE SECOND OFFENSE; FOR THIRD OFFENSE, THE BUSINESS PERMIT OF THE OFFENDER SHALL BE REVOKED. If the violation is committed by a corporation, trust or firm, partnership, association or any other entity the penalty of imprisonment shall be imposed upon the entity's responsible officers, including, but not limited to, the president, vice- president, chief executive officer, general manager, managing director or partner.

SEC. 10. Implementing Rules and Regulations. - The Department of Labor

and Employment (DOLE) shall, within sixty (60) days after the effectivity of this Act, formulate the necessary rules and regulations for its effective implementation.

SEC. 11. Separability Clause. - Should any provision of this Act be declared

invalid or unconstitutional, the validity of the other provisions shall not be affected thereby.

SEC. 12. Repealing Clause. - All laws, orders, issuances, rules and

regulations or parts thereof inconsistent with the provisions of the Act are hereby repealed, amended or modified accordingly.

SEC. 13. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in two (2) newspapers of general circulation. Approved,