Fair Day’s Wage for a Fair Day’s

Labor
(“ No Work, No Pay Principle”)
 Equal Pay for Equal Work

Wage or Salary includes:

1. Commission
2. Facilities
3. Commodities/Supplements
 Facilities

- Shall include 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 conduct
the employer’s business.
 Requirements for Deducting Amount
of Facilities
1.Proof must be shown that such facilities are
customarily furnished by the trade;
2. The provision of deductible facilities must be
voluntarily accepted in writing by the employee;
and
3. The facilities must be charged at fair and
reasonable value (Mabeza v. nlrc, GR No.
118506,April 18, 1997)
 Supplements
- Constitute extra remuneration or
special privileges of benefits given to or
received by the laborers over and above
their ordinary earnings or wages.
 ART. 99
Minimum Wage
- lowest basic wage rate fixed by law that
an employer can pay his employees.
 Prohibition Against Elimination or
Diminution of Benefits

When Applicable
1. The grant of the benefits is founded on a policy
or has ripened into a practice over a long period;
2. The practice is consistent and deliberate;
3. The practice is not due to error in the
construction or application of a doubtful or
difficult question of law; and
4. The diminution or discontinuance is done
unilaterally by the employer.
 General Rule:
Nothing in the Labor Code shall be
construed to eliminate or in any way
diminish supplements, or other employee
benefits being enjoyed at the time of
promulgation of this Code.
Exceptions to the Non-Diminution Rule
1.Correction of error
2. Negotiated benefits
3. Wage order compliance
4. Benefits on reimbursement basis
5. Reclassification of position
6. Contingent benefits or conditional bonus
7. Productivity incentives
 General Rule:
Bonus is not demandable as a matter of
right. It is a management prerogative,
given in addition to what is ordinarily
received by or strictly due to the
recipient.
 Exceptions:
1. When it was promised to be given without
any conditions imposed for its payment in
which case it is deemed part of the wage;
2. When it has ripened into practice
13th Month Pay or Its Equivalent
Equivalent to 1/12 of the total
“basic salary” earned by an employee
within a calendar year.
 May be given anytime but not later than
December 24.
 “its Equivalent”: Mid-year bonus and Christmas
bonus.
 A statutory obligation granted to covered
employees and it is demandable as a matter of
right
 ONLY rank-and-file employees are entitled to the
payment of thirteenth month pay as a matter of
right.
 Productivity Incentives
1. Kind of bonus that comes from productivity
gain;
2. Aims to institute productivity at company
level and the sharing of productivity gain
between employers and employees; and
3. Nature of salary bonus is proportionate to
increases in current productivity (R.A. 6971)
 Workers Paid on Piece-Rate Basis
Those who are paid a standard amount for
every piece or unit of work produced that is
more or less regularly replicated, without regard
to the time spent in producing the same.
 Categories of Piece-Rate Workers
A. As to Presence of Control
1. Piece rate worker – works directly under
the supervision of the employer.
2. Pakyaw or Takay – works away from the
employer’s work premises and are not directly
supervised by the employer.
B. As to Rate of Payment
1. Those paid piece rates as prescribed in
Piece Rate Orders by the DOLE.
2. Those paid output rates which are
prescribed by the employer and are not yet
approved by the DOLE.
Employer CANNOT Pay His Workers by
means of
1. Promissory notes;
2. Vouchers;
3. Coupons;
4. Tokens;
5. Tickets;
6. Chits; or
7. Any object other than legal tender
General Rule: Payment by legal tender.
Exceptions: Payment by check or money order
may be allowed if the same is:
1. Customary on the date of effectivity of the LC;
2. Necessary because of special circumstances
as determined by the Secretary of Labor;
3. Stipulated in the CBA; or
4. Where the following conditions are met:
a. There is a bank or other facility for encashment
within a radius of 1 kilometer from the workplace;
b. The employer, or any of his agents or
representatives, does not receive any pecuniary
benefit directly or indirectly from the arrangement;
c. The employees are given reasonable time during
banking hours to withdraw their wages from the
bank which time shall be considered as
compensable hours worked if done during working
hours; and
d. The payment by check is with the written
consent of the employees concerned if the there is
no CBA authorizing the payment of wages by bank
checks
 TIME OF PAYMENT

1. At least once every two weeks; or

2. Twice a month at intervals not exceeding 16
days.
 Exceptions:
1. In case of force majeure or other circumstances
beyond the employer’s control, payment must be
made immediately after such occurrence has ceased.
2. If engaged to perform a task which cannot be
completed in 2 weeks and in the absence of CBA or
arbitration award:
a. Payment shall be made at intervals not
exceeding 16 days in proportion to the amount of work
completed;
b. that final settlement is made upon completion
of the work.
PLACEMENT OF PAYMENT
At or near the place of undertaking.
 Exceptions:
1. When payment cannot be effected at or near
the place of work by reason of deterioration of
peace and order conditions, or by reason of
actual or impending emergencies caused by fire
flood or other calamity rendering payment
thereat impossible;
2. When the employer provides for free
transportation to the employees back and forth;
and
3. Under any other Analogous circumstances.
Requisites for payment thru banks:
1. There must be written permission of the
majority of the employees concerned in the
establishment;
2. The establishment must have 25 or more
employees; and
3. The establishment must be located within one
kilometer radius to the bank
 ART. 105
Wages shall be paid directly to the
workers to whom they are due.
Exceptions:
1. Payment through another person
a. In case of force majeure rendering such
payment impossible provided said person is
under written authority given by the worker for
the purpose;
b. When authorized under existing law, including
payments for insurance premiums of the
employee and union dues where the right to
check-off has been recognized by the employer
in accordance with a CXBA or authorized in
writing by the individual employees concerned.
2. Payment through the Heirs of the Worker
In case the worker has died, employer may pay
wages of the deceased worker to the heirs of
the latter without the necessity of intestate
proceedings.
3. Payment through a family member or the
worker’s family
Where the employer is authorized in writing by
the employee to pay his wages to a member of
his family.
D.O. 174, s. of 2017
Section 5. Labor-only contracting which is totally prohibited, refers to
an arrangement where:
a.) i. The contractor or subcontractor does not have substantial
capital, or
ii. The contractor or subcontractor does not have investments in the
form of tools, equipment, machineries, supervision, work premises,
among others,
and
iii. The contractor’s or subcontractor’s employees recruited and placed
are performing activities which are directly related to the main
business operation of the principal;
or

b.) The contractor and subcontractor does not exercise the right to
control over the performance of the work of the employee.
 Section 6. Other Illicit Forms of
Employment Arrangements.
In addition to Section 5 of these Rules, the following are
hereby declared prohibited for being contrary to the law or
public policy:
a.) When the principal farms out work to a “Cabo”
b.) Contracting out of job or work through an in-house
agency.
c.) Contracting out of job or work through an in-house
cooperative which merely supplies workers to the principal.
d.)Contracting out of a job or work by reason of a strike or
lockout whether actual or imminent.
e.) Contracting out of job or work being performed by union
members and such will interfere with, restrain or coerce
employees in the exercise of their rights to self-organization
as provided by Article 259 of the Labor Code, as amended.
f.) Requiring the contractor’s/subcontractor’s employees to perform
functions which are currently being performed by the regular
employees of the principal.
g.) Requiring the contractor’s/subcontractor’s employees to sign, as a
precondition to employment or continued employment, an
antedated resignation letter, a blank payroll; a waiver of labor
standards including minimum wages and social or welfare benefits;
or a quitclaim releasing the principal or contractor from liability as to
payment of future claims; or require the employee to become
member of a cooperative.
h.) Repeated hiring by the contractor/subcontractor of employees
under an employment contract of short duration.
i.) Requiring employees under a contracting/subcontracting
arrangement to sign a contract fixing the period of employment to a
term shorter than the term of the Service Agreement, unless the
contract is divisible into phases for which substantially different skills
are required and this is made known to the employee at the time of
engagement.
j.) Such other practices, schemes or employment arrangements
designed to circumvent the right of workers to security of tenure.
 Section 14. Mandatory Registration and
Registry of Legitimate Contractors.

It shall be mandatory for all persons or entities acting as

contractors to register with the Regional Office of the
Department of Labor and Employment (DOLE) where
they principally operate. Failure to register shall give rise
to the presumption that the contractor is engaged in
labor-only contracting.
Failure to register shall give rise to the presumption that
the contractor is engaged in labor-only contracting.
Section 19. Registration Fee
Payment of registration fee of
One Hundred Thousand Pesos
(P100,000.00) shall be required upon
approval of the application.
Section 20. Validity of Certificate
of Registration
The Certificate of Registration shall be
effective for two (2) years, unless cancelled
after due process.