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The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Knowing whether you are receiving the right salary means understanding both the legal minimum wage and the actual value of your work. By staying informed about government wage laws, reviewing your job responsibilities, and checking for mandatory benefits, you can better protect your rights and ensure fair compensation.
Fair wages are not just a legal requirement, they are essential to maintaining dignity, fairness, and economic security for every worker.
In the Philippines, the government sets the minimum wage for different regions. This means your salary can’t be lower than the minimum amount set for your region..
But determining if you are getting the right salary goes beyond just checking if you meet the minimum. Here’s how to know whether you are being compensated fairly, and what laws protect your right to fair wages.
Republic Act No. 6727, also known as the Wage Rationalization Act, mandates that the State shall rationalize the fixing of minimum wages and to promote productivity-improvement and gain-sharing measures to ensure a decent standard of living for the workers and their families; to guarantee the rights of labor to its just share in the fruits of production; to enhance employment generation in the countryside through industry dispersal; and to allow business and industry reasonable returns on investment, expansion and growth. The State shall promote collective bargaining as the primary mode of settling wages and other terms and conditions of employment; and whenever necessary, the minimum wage rates shall be adjusted in a fair and equitable manner, considering existing regional disparities in the cost of living and other socio-economic factors and the national economic and social development plans.
The National Wages and Productivity Commission (NWPC) was created pursuant to Article 120 of the Labor Code, as amended by the Wage Rationalization Act. The NWPC is tasked, among others, to formulate policies and guidelines on wages, incomes, and productivity improvement at the enterprise, industry and national levels, as well as, prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional, provincial or industry levels.
Article 124 of the Labor Code, as amended by the Wage Rationalization Act, states that the regional minimum wage to be established by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program. In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors, consider the following:
- The demand for living wages;
- Wage adjustment vis-à-vis the consumer price index;
- The cost of living and changes or increases therein;
- The needs of workers and their families;
- The need to induce industries to invest in the countryside;
- Improvements in standards of living;
- The prevailing wage levels;
- Fair return of the capital invested and capacity to pay employers;
- Effects on employment generation and family income; and
- The equitable distribution of income and wealth along the imperatives of economic and social development.
These criteria ensure that wage decisions balance the needs of workers, employers, and the overall economy.
In order to check if you are receiving the Right Salary, you must check the following:
1. Verify the Minimum Wage in Your Region
You can check whether your salary meets the regional minimum wage rate by checking the National Wages and Productivity Commission website or by visiting your regional Regional Tripartite Wages and Productivity Board office.
2. Understand Your Job Description
Your compensation should match your job’s responsibilities. If you perform duties beyond your official job title, the law requires that you be compensated accordingly. This may mean higher pay, allowances, or reclassification of your position.
In the case of Mindanao International Container Terminal Services, Inc. v. Mindanao International Container Terminal Services, Inc. Labor-Union-Federation of Democratic Labor Organization, G.R. No. 245918, November 29, 2022, the Supreme Court held that a supervisor who has more responsibilities is justified to receive a higher salary than a rank-and-file employee, even though such rank-and-file employee may have a longer length of service than such supervisory employee. However, if both employees are rank-and-file and they undertake the same nature of work, the employer may be justified in imposing different salaries on such employees based on reasonable factors, such as length of service, seniority, competence, or incentive.
3. Check for Mandatory Benefits
Aside from wages, you must also receive government-mandated benefits such as:
- Overtime pay [Article 87, Labor Code]
- Night shift differential [Article 86, Labor Code]
- Holiday pay [Article 94, Labor Code]
- 13th month pay
- SSS (Republic Act No. 11199), PhilHealth (Republic Act No. 11223), and Pag-IBIG contributions (Republic Act No. 9679)
- Service Incentive Leave, if applicable [Article 95, Labor Code]
If any of these are missing or incorrectly computed, your salary may not be compliant with the law.
4. Assess Industry and Company Standards
Research the standard wage for your position in the industry. This helps you determine whether you are being compensated competitively.
5. Review Your Employment Contract
Check whether your actual work matches with your job description, and whether your salary corresponds to what was agreed upon. Any inconsistencies or issues should be clarified with your employer.
6. Consider Seniority, Skills, and Performance
Employees with greater skills, experience, or tenure may rightfully receive higher pay. Employers often base compensation on these factors in addition to performance and productivity.
If you find that you are not receiving the right salary, you may first discuss the matter to your Human Resources (HR) department or with your employer to clarify any errors or misunderstandings in your salary. If this does not resolve the issue, you may resort to your company’s grievance procedure.
You may also seek assistance from the Department of Labor and Employment by contacting their regional office where your office or work is located or by filing a complaint.
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.
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