Article 99 of the Labor Code: Regional minimum wages
Status: Amended
Amended
This provision has been amended. The text below is the current version.
- Amended by: Republic Act No. 6727
What does Article 99 say?
The minimum wage rates for agricultural and non-agricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards.
Read the Labor Code on the DOLE website (it uses the article numbers before 2015)
What does it mean in plain language?
Article 99 of the Labor Code says the minimum wage is set region by region. The rates for agricultural and non-agricultural workers in each region are those prescribed by the Regional Tripartite Wages and Productivity Boards. The Boards issue wage orders, and the Labor Code lists the factors they must weigh.
The current wording comes from Republic Act No. 6727, the Wage Rationalization Act, approved on June 9, 1989. The article keeps the same number after the 2015 renumbering of the Labor Code.
How does it work in real life?
Noel: a worker in Region VII
Noel works in a factory in Cebu. His minimum wage is not set by a national law but by the wage order of the Regional Board for his region. A worker in another region may have a different minimum.
Ivy: a supervisor's pay gap
Ivy is a team leader. Her pay used to be well above the pay of new staff. A wage order raises the new staff's pay to almost her level, while hers stays the same. This may be wage distortion under Article 124, which the employer and the union, or the employer and the workers, must try to correct.
What does this mean in practice?
- This page gives no minimum wage amounts. The current rates are in the wage orders of each Regional Board.
- All workers paid by results, such as piece-rate or "pakyaw" workers, must receive not less than the prescribed rates per eight hours of work a day, or a proportion for fewer hours (Article 124).
- Payment of wages must follow the rules on form and time in Article 102 and Article 103.
- Benefits above the minimum that employees already enjoy are protected under Article 100.
- Underpayment is a money claim, filed within three years. See how to file a labor complaint and Free legal help in the Philippines. To see the effect of deductions on a salary, use the take-home pay calculator.
- For an overview of the rules on pay and working time, see wages, hours and pay under the Labor Code.
What does Article 99 say?
The minimum wage rates for agricultural and non-agricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards.
Who are the Regional Boards?
Article 122 creates a Regional Tripartite Wages and Productivity Board in all regions. Its powers include:
(b) To determine and fix minimum wage rates applicable in their regions, provinces or industries therein and to issue the corresponding wage orders, subject to guidelines issued by the Commission;
Each Board is chaired by the DOLE Regional Director, with the Regional Directors of NEDA and DTI as vice-chairmen and two members each from the workers' and employers' sectors. The Boards also act on applications for exemption from prescribed wage rates as provided by law or a wage order. The "Commission" is the National Wages and Productivity Commission, created by Article 120 and attached to the DOLE.
What must the Board consider?
Article 124 says regional minimum wages shall be as nearly adequate as is economically feasible to maintain the minimum standards of living needed for the health, efficiency and general well-being of the employees. It lists the factors the Board considers, among others:
(a) The demand for living wages;
(c) The cost of living and changes or increases therein;
(h) Fair return of the capital invested and capacity to pay of employers;
The full list also includes wage adjustment against the consumer price index, the needs of workers and their families, the need to bring industries to the countryside, improvements in standards of living, prevailing wage levels, effects on jobs and family income, and the fair distribution of income and wealth.
The wages may differ by industry, province or locality when the Board finds the difference proper and necessary.
What is wage distortion?
When a new minimum wage raises the pay of lower positions, it can wipe out the pay gaps between job levels in a company. Article 124 calls this wage distortion:
As used herein, a wage distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.
The employer and the union negotiate to correct it, and unresolved disputes go through the grievance procedure and voluntary arbitration. Where there is no union, disputes go to the National Conciliation and Mediation Board and then to the NLRC. A dispute does not delay the wage increase itself.
In Prubankers Association v. Prudential Bank (1999), the Supreme Court said a wage order that applies in one region but not in others does not by itself create wage distortion. The four elements it listed include an existing hierarchy of positions with their pay rates and a distortion in the same region.
Which Supreme Court rulings are relevant?
Frequently asked questions
Who sets the minimum wage in the Philippines?
Under Article 99 of the Labor Code, as amended by Republic Act No. 6727, the minimum wage rates in each region are those prescribed by the Regional Tripartite Wages and Productivity Boards.
Is there one national minimum wage?
No. Article 99 speaks of minimum wage rates in each and every region. Under Article 124, the wages may also vary by industry, province or locality when the Regional Board finds it proper and necessary.
What does the Regional Board consider when setting the minimum wage?
Article 124 lists factors such as the demand for living wages, the consumer price index, the cost of living, the needs of workers and their families, the prevailing wage levels, the capacity to pay of employers, and effects on employment.
What is wage distortion?
Article 124 defines it as a situation where an increase in prescribed wage rates eliminates or severely reduces the intended differences in pay between employee groups in an establishment, based on skills, length of service or other logical bases.
Where can I find the current minimum wage amounts?
This page does not give amounts. The rates are set in wage orders issued by each Regional Board. The take-home pay calculator on this site works from the salary you enter.
General information, not legal advice. For your case, ask a lawyer, the Public Attorney's Office (PAO) or the agency.
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