Wages- paid to any employee shall mean the renumeration or earnings, however

Renumeration on the work rendered.

In lieu of the reinstatement, separation pay is given.

The employee is prevented from working.

Generally the wage applies to all employees. Subject to exemptions such as:

1. Those who work from farm tenancy or leasehold (because their mode of payment are the
shares of crop profit
2. House hold and domestic helper. House help. Drivers. People for the personal service of another
(because of the technical definition of wages. Payment is under kasambahay law)
3. Homeworkers
4. Workers in duly registered cooperatives- because of the special nature of the job such as start-
up (cooperative may not be able to will not survive); the purpose of building a cooperative may
be hampered if payment of wages shall be imposed
5. Workers of barangay micro business enterprise (provided by special law)\

Facilities- items of expenses necessary for the laborer/ employer to his family existence and subsistence.
These are granted to the employee. It is needed by the employee for their existence. Necessary for
existence. Not included are tools of trade. Example: Housing. For the benefit of the employee and
family. Forms part of the wage. Granted for the benefit of the worker and their families

Example: Includes board and lodging, rice ration, recreational facilities, medical attendance, school
assistance, meals

Supplement- special privileges given to the employee and received by the employee over or above the
ordinary wages. Not included on the computation of wages. Granted for the benefit of the employer.
Necessary for the conduct of the employers’ business. For the benefit of the employer.

Ex. Vacation leave pay, overtime pay in excess of legal minimum, Profit sharing benefits, Christmas
bonus

A wage includes facilities.

Basic wage in the computation of overtime, just the basic monetary wage. Facilities are not included.

Wages-

 usually compensation for manual labor.

 Blue collared workers.
 Lower or less responsible character of employment.
 GR: Not subject to execution. Under exemptions-
 If the debt came from food, shelter and medical
attendance, clothing

Salary-
  paid to white collared workers.
 Denotes higher degree of employment.
 Superior grade of services.
 Subject to execution.

Wage distortion- a situation where an increase in the prescribed wage rate in the company (salary rate)
resorts to the elimination or severe contraction of intentional quantitative difference in wage or
salary rates between and among employee groups in an establishment as effectively obliterated the
distinctions in value in such wage structures based on skills, length of service and other logical basis of
differentiation.

Element of wage distortion:

1. There is an existing hierarchy of positions with corresponding salary rates

2. Significant change of increase of salary rate
3. Elimination of distinction of the two groups
4. And the distinction is in the same region in the country. Wage distortion does not exist when it
is from different regions.

How to adjust the distortion? Minimum salary divided actual salary equal percentage an multiply it to
the prescribed increase equals distortion adjustment
𝑚𝑖𝑛𝑖𝑛𝑢𝑚 𝑠𝑎𝑙𝑎𝑟𝑦
= % × 𝑃𝑟𝑒𝑠𝑐𝑟𝑖𝑏𝑒𝑑 𝑖𝑛𝑐𝑟𝑒𝑎𝑠𝑒 = 𝐷𝑖𝑠𝑡𝑜𝑟𝑡𝑖𝑜𝑛 𝐴𝑑𝑗𝑢𝑠𝑡𝑚𝑒𝑛𝑡
𝑎𝑐𝑡𝑢𝑎𝑙 𝑠𝑎𝑙𝑎𝑟𝑦
With union- through the collective bargaining agreement who shall be the volunteer arbitration who will
be the voluntary arbitrators.

No union - National consolation and mediation board shall mediate the wage distortion dispute. Then to
NLRC.

Evidence of wage distortion shall be based on salary grade.

Wage order- identifying the new minimum wage of the region

What is minimum wage- under RA 6727 the statutory minimum wage set by the regional wage board;
lowest rate that an employer can pay to a wage worker

Criteria for minimum wage

1. Needs for workers and families

2. Capacity to pay of the employers
3. Wage levels to other provinces/region

Can wages be waived? No. Because minimum wage is granted by law. Under civil law, waiver of wages is
against public policy because the set of minimum wage was factored all criteria by law. Law consider
that the employee will be allowed to improve his standard of living. Minimum wage is standard even if
there is waiver. Even if there is a waiver, such waiver is not valid. Non-waivable and non negotiable.
Higher than minimum wage is allowed.

How is the wage of domestic worker is paid? It should be paid on time, directly in person, in cash at least
once a month. Not by means of promissory note. If there are cash advances, there must be a written
consent that it shall be deducted in the salary. Copies of payslip must be kept by the employer in 3 years
for future reference or conflicts. Money claims should be filed within one year.

Withholding of wages shall be unlawful either directly or indirectly

If a domestic worker leaves for no justifiable reason, any unpaid salary of not exceeding 15 days shall be
forfeited. The employer shall not induce the employee to give up any part, diminution, the wage by any
other means whatsoever.

Commission are compensation considered as a reward for the sale or extra service. Example broker,
salesman, agent. Based on a percentage.

Commission is not always included in the computation of the 13th month pay. There are salaries that
commissions are part of the basic pay.

13th month pay is computed on the basic salary.

On probationary employee is still entitled to minimum wage. All statutory benefits are still entitled.

What commissions that are part of the salary:

 Sales commission earned by salesman

GR: Deductions are strictly prohibited

Exemptions:

 Insurance payment with written consent

 Union dues with written consent
 Allowable deductions authorized by law
o Loss and damages Art. 114
o Agency fee - accepted the benefit of the CBA because of the Union dues