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June 1, 2022

Wages vs. Salary

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Related article: Payment of salary, and prohibitions regarding wages

According to some accounting articles, the difference between salary and wages lies on the days or hours rendered by a person. The essential difference between salary and wages is that a salaried person is paid a fixed amount per pay period and a wage earner is paid by the hour (The difference between salary ang wages, December 09, 2018, Last Accessed: July 15, 2019). In our jurisdiction, is knowing the difference between Wages and Salary very important? This article seeks to provide its readers the generally accepted difference between wage and salary and the laws and jurisprudence in our legal system regarding wages and salaries.

 Wages and salary may be different in terms of amount of compensation received by the employee and that most of the time, especially in other countries, salary is the term used for the regular payment by an employer to an employee for employment that is expressed either monthly or annually, but is paid most commonly on a monthly basis, especially to white collar workers, managers, directors and professionals. (What is A Salary? MBN Market Business News). This may be true as the provision under Section 13, Rule 39 of the Rules on Civil Procedure provides the properties exempt from execution of judgment, it includes so much of the salaries, wages, or earnings of the judgment obligor for his personal services within the four months preceding the levy as are necessary for the support of his family.

The exemption under the mentioned procedural rule should be read in conjunction with the Civil Code, the substantive law which proscribes the execution of employee’s wages, thus:

ART. 1708. The laborer’s wage shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance.”

Obviously, the exemption under Rule 39 of the Rules of Court and Article 1708 of the New Civil Code is meant to favor only laboring men or women whose works are manual. Persons belonging to this class usually look to the reward of a day’s labor for immediate or present support, and such persons are more in need of the exemption than any other (Gaa vs. Court of Appeals, 140 SCRA 304).

In view of the above, if “salary” is considered as the compensation earned by white collar workers, where it is presumed that they earn more than the wage earners, then their salary may not be immediately exempt from execution.

However, in the case of Avendaño vs. Alikpala 12 SCRA 537, November 28, 1964, the Supreme Court used the term “Salary” in its decision penned by Justice Paredes declaring as null and void the writ of Garnishment, portion of the ruling reads as follows:

“We are of the opinion that the writ of ganishment is illegal. It has been shown by “unrebutted proofs, that the salary of petitioner Marta Avendaño was not sufficient for her expenses and that of her family. Under the Revised Rules, the following, among others, is declared exempt from execution.

(1)          So much of the earnings of the debtor for his personal services within the month preceding the levy as are necessary for the support of his family (Sec. 12, Rule 39).

The salary of Marta Avendaño is P200.00 a month, but her take-home pay after the legal deductions is only P151.50. A summary of her share in the monthly maintenance of the family is in Annex K-1, which indicates that she should at least contribute P220.00. The amount garnished is therefore, much less than what she ought to contribute, and obviously, it is exempt from execution. Being exempt from execution, it should not also be reached by garnishment. Petitioners have pointed out to the respondent judge the matter of exemption of Marta Avendaño’s salary, in spite of which his Honor denied their petition to declare the garnishment illegal. There was, therefore grave abuse of discretion on the part of the, respondent judge in that aspect, and lack or excess of jurisdiction on the part of the Sheriff in suing out the Writ of Garnishment. In the case of Garcia vs. Castillo, 43 Phil. 364, it has been held that the issuance of a writ of execution on P50.00 of the total P65.00 received as monthly salary from the employer, was premature and unlawful.”

Nonetheless, in our jurisdiction, irrespective of the difference between the terms, wages and salary, the important thing to be considered is that the employee is duly paid with his compensation or remuneration from the service he or she performed. Also, only the wage or salary “due” to the judgment debtor is subject to attachment and execution, and only if it is not made to appear by the affidavit of the debtor that such earnings are necessary for the support of his family.


OTHER SOURCES:

  1. The difference between salary ang wages, December 09, 2018, https://www.accountingtools.com/articles/what-is-the-difference-between-salary-and-wages.html, Last Accessed: July 15, 2019
  2. What is A Salary? MBN Market Business News, https://marketbusinessnews.com/financial-glossary/salary-definition-meaning/, Last Accessed: June 16, 2019

Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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