Labor Laws and Social Legislation

 remuneration or earnings, however designated,

capable of being expressed in terms of money,
whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of
calculating the same, which is payable by an
employer to an employee under a written or
unwritten contract of employment for work done
or to be done, or for services rendered or to be
rendered
 includes the fair and reasonable value, as
determined by the Secretary of Labor and
Employment, of board, lodging, or other facilities
customarily furnished by the employer to the
employee.
 “No work, no pay” principle
 If there is no work performed by the
employee there can be no wage or pay
unless, of course, the laborer was able,
willing and ready to work but was illegally
locked out, suspended or dismissed, or
otherwise illegally prevented from working.
 Employees holding the same position and
rank are presumed to be performing equal
work.
 The rule applies whether the employee is
hired locally or abroad.
 This presumption is borne by logic and
human experience.
 Commission
 Facilities
 Commodities/supplement
 Direct remuneration received by an agent,
salesman, executor, broker, or trustee
calculated as a percentage on the amount of
his transactions or on the profit to the
principal
 All articles or services for the benefit of the
employee or his family but shall not include
tools of the trade or articles or services
primarily for the benefit of the employer or
necessary to the conduct of the employer’s
business
 Proof must be shown that such facilities are
customarily furnished by the trade;
 Provision of deductible facilities must be
voluntarily accepted in writing by the
employee; and
 Facilities must be charged at fair and
reasonable value
 Employer may deduct from wages not more
than 70% of the value of the meals and
snacks enjoyed by the employees provided
that such deduction is authorized in writing
by the employee
 Remaining 30% of the value has to be
subsidized by the employer
 Considered supplements if they are granted
for the convenience of the employer.
 Extra remuneration or special privileges or
benefits given to or received by laborers over
and above their ordinary earnings
 Facilities Supplements
As to nature
Items of expense necessary for the Items which constitute extra
laborer’s and his family’s existence remuneration or special privileges
and subsistence or benefits given to or received by
laborers over and above their
ordinary earnings
As to deductibility
Part of the wage Independent of the wage
Deductible from wage Not wage deductible
 Gratuity is something freely given or without
recompense to reward employees who have
rendered satisfactory and efficient service to
company. It does not form part of the wage
 Allowances are amounts of money, which are
not part of wages, but are given in
consideration of certain expenses like
transportation and representation.
 Lowest basic wage rate fixed by law that an
employer can pay his employees
 Compensation which is less than such
minimum rate is considered an
underpayment which violates the law
 Employer cannot exempt himself from
liability to pay minimum wages because of
poor financial condition of the company
 Payment of minimum wage is not dependent
on employer’s ability to pay
 Farm tenancy or leasehold
 Household or domestic helpers
 Homeworkers engaged in needle work
 Workers employed in any establishment duly
registered with the National Cottage Industry
Development Authority
 Workers duly registered cooperatives when so
recommended by the Bureau of Cooperative
Development upon approval of the SOLE
 Workers of Barangay Micro Business Enterprise
 Retail/service establishment regularly employing
not more than 10 workers
 Generally, employees have vested right over
existing benefits voluntarily granted to them
by their employer.
 Thus benefits being given to employees
cannot be taken back or reduced unilaterally
by the employer because the benefit has
become part of the contract, written or
unwritten.
1. Practice is consistent and deliberate
2. Diminution or discontinuance is done
unilaterally by the employer
3. The grant of benefit is founded on a policy
or has ripened into a practice over a long
period
4. Practice is not due to error in the
construction or application of a doubtful or
difficult provision of law
 Correction of errors
 Negotiated benefits
 Wage order compliance
 Benefits on reimbursement basis
 Reclassification of position
 Contingent benefits or conditional bonus
 Productivity incentives
 Amount granted or paid to an employee for
his industry and loyalty which contributed to
the success of the employer’s business and
made possible the realization of profits
 Generally, not demandable: management
prerogative
◦ Exception: (1) when promised to be given without
any conditions imposed for its payment (part of the
wage); (2) When it has ripened into practice
 Additional income as provided by P.D. 851
 Included in the definition of wage under Art.
97
 Equivalent to one-twelfth of the total “basic
salary” earned by an employee within a
calendar year
 Basic salary includes all remunerations or
earnings paid by an employer to an employee
for services rendered including COLA
 Rank-and-file employees in the private sector
regardless of their position, designation,
employment status, and irrespective of the
method by which their wages are paid,
provide that they have worked for at least one
month during the calendar year
 May be given anytime but not later than
December 24
 Midyear bonus and Christmas bonus
 Statutory obligation, demandable as a matter
of right
 Only rank and file are entitled
 An employee who has resigned or whose
services were terminated at anytime before
the payment of 13th month pay is entitled to
this monetary benefit in proportion to length
of time he work during the year reckoned
from the time of his resignation or
termination from service.
 X worked for 6 months prior to resignation.
He received a monthly salary of P 7,500.00.
X’s 13th month pay will be computed as
follows:
◦ Monthly salary x months worked)/12 = Pro-rated
13th Month Pay
◦ (7,500x6)/12 = P 3750
 Prohibited forms of payment
◦ Vouchers
◦ Promissory notes
◦ Any object other than legal tender
◦ Coupons
◦ Chits
◦ Tokens
◦ Tickets
 Any other form alleged to represent legal
tender is absolutely prohibited even when
expressly requested by employee
 At least once every two weeks
 Twice a month at intervals not exceeding 16 days
 Exceptions:
◦ If on account of force majeure or circumstances beyond
the employer’s control, payment of wages on or within
the time herein provided cannot be made, the employer
shall pay the wages immediately after such force
majeure or circumstances have ceased.
◦ The payment of wages of employees engaged to perform
a task which cannot be completed in two (2) weeks shall
be subject to the following conditions, in the absence of
a collective bargaining agreement or arbitration award:
 That payments are made at intervals not exceeding sixteen
(16) days, in proportion to the amount of work complete
 That final settlement is made upon completion of the work.
 Payment of wages shall be made at or near
the place of undertaking, except as otherwise
provided by such regulations as the Secretary
of Labor and Employment may prescribe
under conditions to ensure greater protection
of wages.
 Exceptions:
◦ Deterioration of peace and order conditions; actual
or impending emergencies
◦ Free transportation back and forth
◦ Analogous circumstances
 No employer shall pay his employees in any
bar, night or day club, drinking
establishment, massage clinic, dance hall, or
other similar places or in places where games
are played with stakes of money or things
representing money except in the case of
persons employed in said places
 Payment of wages shall be made direct to the
employee entitled thereto except in the following
cases:
◦ Where the employer is authorized in writing by the
employee to pay his wages to a member of his family;
◦ Where payment to another person of any part of the
employee's wages is authorized by existing law,
including payments for the insurance premiums of the
employee and union dues where the right to check-off
has been recognized by the employer in accordance with
a collective agreement or authorized in writing by the
individual employees concerned; or
◦ In case of death of the employee
 Coverage: establishments collecting service
charges such as hotels, restaurants, lodging
houses, night clubs, cocktail lounge, massage
clinics, bars, casinos and gambling houses, and
similar enterprises, including those entities
operating primarily as private subsidiaries of the
Government
 Distribution rate: 85% for the employees and
15% for the management.
◦ The 85% shall be distributed equally among the covered
employees.
◦ The 15% shall be for the disposition by management to
answer for losses and breakages and distribution to
managerial employees at the discretion of the
management in the latter case.
 With Employee’s Consent in Writing
◦ SSS Payments
◦ Philhealth payments
◦ Pag-Ibig Contributions
◦ Payment to third persons with consent
◦ Value of meals and other facilities
◦ Deductions for unpaid absences
 Without Employee’s Consent
◦ Union dues where right to check-off has been
recognized
◦ Withholding taxes
 Authorized by law
◦ Deposit for loss/breakage (practice)
◦ Due and demandable indebtedness
◦ Court judgment: food, shelter, clothing, and
medical attendance