Wage Theft Prevention Act

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session 25 JUL -3 P4:03 SENATE RIS - - S. No. 81 Introduced by Senator Raffy T. Tulfo PENALZZING THE ACT OF WAGE THNA BY AMENDING FOR THIS PURPOSE ARTICLES 87 AND 116 OF PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES EXPLANATORY NOTE Once employees rendered work, employers are mandated by law to give just compensation. The employees should receive what is owing to them by their employers. While there are many employers who do not willfully take their employees' hard earned wages, there are unscrupulous employers who take employees' time without proper pay. I receive hundreds of complaints everyday and wage theft is one of the most common. Thus, in coordination with the Department of Labor and Employment (DOLE), we personally conducted company ocular inspections. Out of 11 companies we inspected, ten of them have violations on wage payments. To help rectify this situation, it is about time that the employees who have less in life be given a stronger means of penalizing abuses in law. By making the withholding and taking of their proper remuneration as an imprisonable offense, there will be created a deterrent for the employers to breach their legal obligation to provide proper remuneration to those who they employ. This bill intends to combat intentional exploitation against vulnerable workers, many of which are minimum wage workers by providing stiffer penalties for wage theft. This bill clearly sets out the punishments by adopting the penalties under Article

309 of the Revised Penal Code, as amended, whereby it ranges from arresto mayor to prision mayor, depending on the subject amount of the wage theft. In view of the foregoing, the urgent passing of this bill is earnestly sought.

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session 25 JUL -3 P4:03 SENATE ------ S. No._ Introduced by Senator Raffy T. Tulfo AN ACT PENALIZING THE ACT OF WAGE THEFT BY AMENDING FOR THIS PURPOSE ARTICLES 87 AND 116 OF PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Title. - This Act shall be known as the "Wage Theft Prevention Act".

Sec. 2. Declaration of Policy. - It is the policy of the State to not only ensure

3 workers" right to a living wage and to a humane working condition, but full protection 4 to all the rights legally due to a worker. To promote and ensure full protection of a workers' wage against unlawful act 6 of wage theft, the State adopts and institutionalizes the legislation of penalizing the 7 act of wage theft that can possibly be committed against honest and hardworking 8 workers of both the public and private sectors, locally and abroad.

Sec. 3. Definition of Terms. - As used in this Act:

a) Wage Theft refers to the act of depriving or withholding an employee of the wages, other earnings, and benefits to which the employee is legally entitled to as stated in the contract or agreement entered by both the employer and employee of the private sector, locally or abroad. The act may be in the form of, but is not limited to: 1. non-payment or incorrect payment of wage, including minimum wage, overtime premium, holiday/rest day pay, night shift differential, among others; 2. tip theft or failure to award the amount of tips honestly earned by a worker;

•. i i 3. failure to pay bonuses granted to each employee as stated in their contract or agreement; 4. off-the-clock work, wherein employees are required to perform work-related tasks before clocking in or after clocking out, essentially working for free and losing overtime pay; and 5. discrimination on the classification of employees from other earnings and benefits.

Sec. 4. Article 87 of the Labor Code of the Philippines is hereby amended to

read as follows: "ART. 87. Overtime Work. - Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday of rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. IT SHALL BE UNLAWFUL FOR ANY EMPLOYER TO DISCRIMINATE ANY EMPLOYEE BY CLASSIFYING THOSE WHO CAN EXCLUSIVELY RENDER OVERTIME WORK ON THE BASIS OF SEXUAL ORIENTATION, ETHNIC ORIGIN, RELIGIOUS BELIEF, DISABILITY, EDUCATIONAL ATTAINMENT AND OTHER FORMS OF DISCRIMINATION."

Sec. 5. - Article 116 of the Labor Code of the Philippines is hereby amended

to read as follows: "ART. 116. Withholding of Wages and Kickbacks Prohibited. - It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages, OTHER EARNINGS AND BENEFITS SUCH AS OVERTIME COMPENSATION, TIPS, 13TH MONTH PAY, REIMBURSEMENTS DONE ON THE COURSE OF THEIR DUTY, HOLIDAY PAY, BONUSES, AMONG OTHERS ON THE AGREED RELEASE DATE OF SUCH WAGE, OTHER EARNINGS AND BENEFITS of a worker or induce him to give any part of his wages by

force, stealth, intimidation, threat or by any other means whatsoever without the workers' consent."

Sec. 6. Penalties. - Employers who fail to comply with this Act shall be criminally

liable in accordance with paragraphs 1 to 6 of Article 309 of the Revised Penal Code, as amended, and other existing laws, rules, and regulations. In cases where the employee who is subject to wage theft is employed by a corporation, the person criminally liable shall be the person directly responsible for the release of wages or, in the absence thereof, the beneficial owner of the corporation. In cases of partnerships, all partners shall be liable, and in cases of sole proprietorship, the sole proprietor shall be liable. Furthermore, if proven that the violating entity has been withholding workers' wages, other earnings and/or other benefits, suspension or cancellation of business permits will be as follows: a) First Offense: suspension of three (3) months to six (6) months; b) Second Offense: suspension of six (6) months to 1 year; c) Third Offense: cancellation of business permit.

Sec. 7. Implementing Rules and Regulations. - In coordination with the

representatives of the public and private sectors, and other concerned government agencies, the Secretary of Labor and Employment shall promulgate the necessary rules and regulations to implement the provisions of this Act.

Sec. 8. Separability Clause. - If any provision of this Act is declared invalid or

unconstitutional, the other provisions not affected by such declaration shall remain in full force and effect.

Sec. 9. Repealing Clause. - All laws, executive orders, administrative orders,

and rules and regulations inconsistent with this Act are hereby repealed or amended accordingly.

Sec. 10. Effectivity Clause. - This Act shall take effect fifteen (15) days after its

complete publication in the Official Gazette or in a newspaper of general circulation. Approved,