Primer on Wage Order No. NCR-19 (15-Peso Increase in Minimum Wage)

The Regional Tripartite Wages and Productivity Board-NCR (RTWPB-NCR) has approved Wage Order No. NCR-19 (full text), providing that all private sector minimum wage workers and employees in the National Capital Region (NCR) shall receive an increase in the existing Basic Wage in the amount of FIFTEEN PESOS (P15.00) per day. The new daily minimum wage rates of covered workers in the private sector in the NCR are as follows:

Sector/Industry Basic Wage Basic Wage Increase
New Basic Wage COLA New  Wage Rates
Non-Agriculture P451.00 P15.00 P466.00 P15.00 P481.00
Agriculture (Plantation and Non-Plantation) P414.00 P15.00 P429.00 P15.00 P444.00
Private Hospitals with bed capacity of 100 or less P414.00 P15.00 P429.00 P15.00 P444.00
Retail/Service Establishments employing 15 workers or less P414.00 P15.00 P429.00 P15.00 P444.00
Manufacturing Establishments regularly employing less than 10 workers P414.00 P15.00 P429.00 P15.00 P444.00

Who are covered by the Wage Order?

The wage rates per day prescribed in the Wage Order apply to all minimum wage earners in the private sector in the NCR, regardless of their position, designation or status of employment and irrespective of the method by which they are paid.

Any party aggrieved by the Wage Order may file an appeal to the National Wages and Productivity Commission (NWPC), through the (RTWPB-NCR), in three (3) printed copies, not later than ten (10) days from the publication of the Wage Order.

Who are not covered by the Wage Order?

Government employees are obviously not covered by the Wage Order. Also, the Wage Order covers the following: (1) kasambahay/domestic workers; (2) persons in the personal service of another, including family drivers; and (3) workers of duly registered Barangay Business Enterprises (BMBEs) with Certificates of Authority pursuant to Republic Act 9178, as amended.

Can certain employers be exempted?

Certain employers may be exempted from the payment of minimum wage, provided: (1) the employer applied for exemption with the Wage Board and the Wage Board approved the application; and (2) the employer belongs to certain classifications. The following may be exempted from the applicability of the Wage Order:

a. Distressed establishments;

b. Retail/Service establishments regularly employing not more than ten (10) workers; and

c. Establishments adversely affected by natural calamities.

It’s interesting to note that one exemption provided in the previous Wage Order was removed: Establishments whose Total Assets (ETA) including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, are not more than P3 Million.

Does the Minimum Wage apply to contractors?

Yes. In the case of contracts for construction projects and for security, janitorial and similar services, the wage rates prescribed in this Order shall be borne by the principals or clients of the service contractors and the contract shall be deemed amended accordingly. In the event, however, that the principals or clients fail to pay the prescribed wage rates, the service contractor shall be jointly and severally liable with his principal or client.

How does the Minimum Wage apply to private schools?

In the case of private educational institutions, the share of covered workers and employees in the increase in tuition fees for School Year 2015-2016 shall be considered as compliance with the wage rates prescribed herein. However, payment of any shortfall in the wage increase set forth herein shall be covered starting School Year 2016-2017.

Private educational institutions which have not increased their tuition fees for School Year 2015-2016 may defer compliance with the wage rates prescribed herein until the beginning of School Year 2016-2017.

In any case, all private educational institutions shall implement the wage rates prescribed herein starting School Year 2016-2017.

How does the Minimum Wage apply to workers paid by results?

All workers paid by result (including those who are paid on piecework, “takay”, “pakyaw” or task basis) shall be entitled to receive not less than the prescribed wage rates per eight (8) hours work a day, or a proportion thereof for working less than eight (8) hours.

What if the employees are receiving higher wages?

The higher wages shall be maintained. Nothing in the Wage Order shall be construed to reduce any existing wage rates, allowances and benefits of any form under existing laws, decrees, issuances, executive orders and/or under any contract or agreement between the workers and employers.

What if the employees recently received a wage increase?

A recent wage increase may or may not be credited as a compliance with the Wage Order, depending on the time period when the increase was granted.

Any increase granted by an employer in an organized establishment (with an accredited union) within three (3) months prior to the effectivity of the Wage Order shall be credited as compliance with the prescribed increase set forth herein, provided that an agreement to this effect has been forged between the parties or a collective bargaining agreement provision allowing creditability exists. In the absence of such an agreement or provision in the CBA, any increase granted by the employer shall not be credited as compliance with the wage rates prescribed in this Order.

In unorganized establishments (without a union), any increase granted by the employer within five (5) months prior to the effectivity of this Order shall be credited as compliance therewith.

In case the increases given are less than the prescribed wage rates, the employer shall pay the difference. Such increases shall not include anniversary increases, merit wage increases and those resulting from the regularization or promotion of employees.

Does the Minimum Wage does away with the freedom to bargain?

No. The Wage Order shall not be construed to prevent workers in particular firms or enterprises or industries from bargaining for higher wages with their respective employers.

Can the courts enjoin the payment of minimum wage?

No preliminary or permanent injunction, or temporary restraining order may be issued by any court, tribunal or other entity against any proceedings before the Board.

Are there penalties for violations?

Failure to comply with the prescribed minimum wage opens the employer to a complaint for non-payment of minimum wage. In case of a finding of underpayment of wages, the judgment includes the payment of an amount equivalent to double the unpaid benefits owing to the employees, plus, if warranted by the circumstances, damages and attorney’s fees.

There is also a criminal penalty associated with non-payment of the minimum wage. Wage Order No. NCR-19 provides that “any employer who refuses or fails to comply with this Order shall be subject to penalties specified under RA 6727, as amended by R.A. No. 8188.” This is a criminal case, involving a fine and/or jail time. The amount of fine should not less than P25,000 nor more than P100,000. The imprisonment should not be less than two (2) years nor more than four (4) years. 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.

6 thoughts on “Primer on Wage Order No. NCR-19 (15-Peso Increase in Minimum Wage)

  1. teresita

    What if the employee is receiving more than the minimum wage, is he/she still covered of the P15.00 increase?

    Reply
  2. Lovely Jan

    I just want to asked regarding the cola what if it is in Private Sector like call center, because before I’m receiving a COLA of 652.50/month last Nov. 2012 – May 25 2015 but last June 10 2015 they decrease my COLA to Php326.25/month , My basic pay is 10,806.64 included my increase for the annual appraisal last april 25 2015 but before 10,391. Is it right to decrease my COLA?

    Reply

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