WAGE PROTECTION PROVISIONS & PROHIBITIONS REGARDING WAGES

ART. 112. Non-interference in disposal of wages. - No employer shall limit or otherwise interfere with
the freedom of any employee to dispose of his wages. He shall not in any manner force, compel, or
oblige his employees to purchase merchandise, commodities or other property from the employer or
any other person, or otherwise make use of any store or services of such employer or any other person.

The employee already owns the wages; ownership carries with it the right to dispose of the wages.

Art. 288 (RPC). Other similar coercions; (Compulsory purchase of merchandise and payment of wages by
means of tokens.) — The penalty of arresto mayor or a fine ranging from 200 to 500 pesos, or both, shall
be imposed upon any person, agent or officer, of any association or corporation who shall force or
compel, directly or indirectly, or shall knowingly permit any laborer or employee employed by him or by
such firm or corporation to be forced or compelled, to purchase merchandise or commodities of any
kind.

The same penalties shall be imposed upon any person who shall pay the wages due a laborer or
employee employed by him, by means of tokens or objects other than the legal tender currency of the
laborer or employee.

If the employer merely encourages the employee to patronize his products, it is not a crime.

ART. 113. Wage deduction. - No employer, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except:

(a) In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium on
the insurance; <due to contract >

(b) For union dues, in cases where the right of the worker or his union to check-off has
been recognized by the employer <in the CBA> or authorized in writing by the individual
worker concerned <if not in the CBA>; and <designed to protect the union because it is
very difficult to compel each employee to give union dues to the union>

(c) In cases where the employer is authorized by law or regulations issued by the
Secretary of Labor and Employment.

ART. 114. Deposits for loss or damage. - No employer shall require his worker to make deposits from
which deductions shall be made for the reimbursement of loss of or damage to tools, materials, or
equipment supplied by the employer, except when the employer is engaged in such trades, occupations
or business where the practice of making deductions or requiring deposits is a recognized one, or is
necessary or desirable as determined by the Secretary of Labor and Employment in appropriate rules
and regulations.
IRR:

SECTION 13. Wages deduction. — Deductions from the wages of the employees may be made by the
employer in any of the following cases:

(a) When the deductions are authorized by law, including deductions for the insurance premiums
advanced by the employer in behalf of the employee as well as union dues where the right to check-off
has been recognized by the employer or authorized in writing by the individual employee himself.

(b) When the deductions are with the written authorization of the employees for payment to the third
person and the employer agrees to do so; Provided, That the latter does not receive any pecuniary
benefit, directly or indirectly, from the transaction.

SECTION 14. Deduction for loss or damage. — Where the employer is engaged in a trade, occupation or
business where the practice of making deductions or requiring deposits is recognized to answer for the
reimbursement of loss or damage to tools, materials, or equipment supplied by the employer to the
employee, the employer may make wage deductions or require the employees to make deposits from
which deductions shall be made, subject to the following conditions:

(a) That the employee concerned is clearly shown to be responsible for the loss or damage;

(b) That the employee is given reasonable opportunity to show cause why deduction should not be
made;

(c) That the amount of such deduction is fair and reasonable and shall not exceed the actual loss or
damage; and

(d) That the deduction from the wages of the employee does not exceed 20 percent of the employee's
wages in a week.

Phil. Cooperative Code of 2008

ART. 58. Instrument for Salary or Wage Deduction. – (1) A member of a cooperative may,
notwithstanding the provisions of existing laws to the contrary, execute an instrument in favor of the
cooperative authorizing his employer to deduct from his/her salary or wages, commutation of leave
credits and any other monetary benefits payable to him by the employer and remit such amount as may
be specified in satisfaction of a debt or other demand due from the member to the cooperative.

"(2) Upon the execution of such instrument and as may be required by the cooperative contained in a
written request, the employer shall make the deduction in accordance with the agreement and remit
forthwith the amount so deducted within ten (10) days after the end of the payroll month to the
cooperative. The employer shall make the deduction for as long as such debt or other demand remains
unpaid by the employee.
"(3) The term "employer" as used in this article shall include all private firms and the national and local
governments and government-owned or controlled corporations who have under their employer a
member of a cooperative and have agreed to carry out the terms of the instrument mentioned in
paragraphs (1) and (2) of this article.

"(4) The provisions of this article shall apply to all similar agreements referred to in paragraph (1) and
were enforced prior to the approval of this Code.

"(5) Notwithstanding the provisions of existing laws to the contrary, the responsibilities of the employer
as stated in paragraphs (1) and (2) of this article shall be mandatory: Provided, That in the case of
private employer, the actual and reasonable cost deducting and remitting may be collected.

ART. 115. Limitations. - No deduction from the deposits of an employee for the actual amount of the
loss or damage shall be made unless the employee has been heard thereon, and his responsibility has
been clearly shown.

ART. 116. Withholding of wages and kickbacks prohibited. - It shall be unlawful for any person, directly
or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of
his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s
consent.

ART. 117. Deduction to ensure employment. - It shall be unlawful to make any deduction from the wages
of any employee for the benefit of the employer or his representative or intermediary as consideration
of a promise of employment or retention in employment. <There is consent by the employee but it is
unlawful because it is contrary to public policy because only those with money will be able to get a job.
Objective = to level the playing field>

ART. 118. Retaliatory measures. - It shall be unlawful for an employer to refuse to pay or reduce the
wages and benefits, discharge or in any manner discriminate against any employee who has filed any
complaint or instituted any proceeding under this Title or has testified or is about to testify in such
proceedings.

ART. 119. False reporting. - It shall be unlawful for any person to make any statement, report, or record
filed or kept pursuant to the provisions of this Code knowing such statement, report or record to be
false in any material respect.

Art. 1705. The laborer's wages shall be paid in legal currency.

Art. 1706. Withholding of the wages, except for a debt due, shall not be made by the employer. (also
known as compensation under civil law)

Art. 1707. The laborer's wages shall be a lien on the goods manufactured or the work done.
Reason: By virtue of this new lien, the laborers who are not paid by an unscrupulous and irresponsible
industrialist or manager may by legal means have the goods manufactured thru the sweat of their brow
sold, and out of the proceeds get their salary, returning the excess, if any [Report Code Commission,
p.14]

Goods Manufactured or the work done

 Refers to personal property, not real property. And even here, the lien is allowed the laborer only if
he was directly employed or engaged by the owner. The rule does not apply if a contractor, with
men under him, had undertaken the job.

Art. 1708. The laborer's wages shall not be subject to execution or attachment, except for debts
incurred for food, shelter, clothing and medical attendance.

THIS IS THE TIME WHEN THE SUPREME COURT MADE A DISTINCTION BETWEEN WAGE AND
SALARY.

General Rule: Wages are not subject to execution.

Exception: Debts incurred for support such as food, shelter, clothing, medical attendance.

 The rule applies even when the wages are still in the possession of the employer whose properties
may have been attached.

Salaries due to government employees cannot be garnished before they are paid to the employees
concerned because:

1. The incentive for work would be lost

2. Generally, the state cannot be sued; and
3. Finally, technically, before disbursements, the money still belongs to the government.

Art. 1709. The employer shall neither seize nor retain any tool or other articles belonging to the laborer.

PRINCIPLE OF ‘NON-DIMINUTION OF BENEFITS’

ART. 100. Prohibition against elimination or diminution of benefits. - Nothing in this Book 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. <no need for proof of the length of time that the employees
enjoyed these benefits as long as they were enjoying these benefits at the time of the promulgation of
the Code at May 1, 1974>

 it essentially means that benefits being given to employees cannot be taken back or reduced
unilaterally by the employer because the benefit has become part of the employment contract,
written or unwritten.

THE RULE AGAINST DIMINUTION OF SUPPLEMENTS OR BENEFITS IS APPLICABLE IF IT IS SHOWN THAT:

1. The grant of the benefit is based on an express policy or has ripened into a practice over a long
period of time;
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.
4. The diminution or discontinuance is done unilaterally by the employer.

Exceptions to the nondiminution rule:

1. Correction of error
2. Negotiated benefits
3. Wage order compliance
4. Benefits on reimbursement basis
5. Reclassification of position from rank-and-file to supervisory
6. Contingent benefits or conditional bonus
7. Productivity incentives

ART. 127. Non-diminution of benefits. - No wage order issued by any regional board shall provide for
wage rates lower than the statutory minimum wage rates prescribed by Congress. (As amended by
Republic Act No. 6727, June 9, 1989).