Facilities vs. Supplements 3. Employee's preference based on Religious grounds (LABOR CODE, Art. 93 (d)).

Q: What are facilities? Q: Do bona fide members of religious groups who reserve worship on a day other
ANS: Facilities include articles or services for the benefit of the employee or his family but than Sunday have any right to choose their own rest days?
shall not include tools of the trade or articles or service primarily for the benefit of the ANS: Yes. The employer, under the law, is required to respect the preference of the
employer or necessary to the conduct of the employer's business (IRR of LABOR CODE, employee if the same is based on religious grounds (IRR of LABOR CODE, Book 1, Rule
Rule VII-A, Sec. 5). They are items of expense necessary for the laborer's and his family's III, Sec. 4).
existence and subsistence so that by express provision of law, they form part of the wage
and when furnished by the employer are deductible therefrom (SLL International Cable Q: If the employer has a well-founded claim that it cannot accommodate the
Specialist v. NLRC, G.R. No. 172161, March 2, 2011). preference of some of its employees without undue detriment to its business, may it
legally refuse to re-schedule the rest day of the employees involved?
Q: What are supplements? ANS: If the employer cannot resort to other remedial measures, it may schedule the rest
ANS: Supplements constitute extra remuneration of special privileges or benefits given to days of the employees involved on the days of their choice for at least 2 days in a month.
or received by the laborers over and above their ordinary earnings or wages Accordingly, The other rest days within the month will have to be taken on days chosen by the employer
they are independent of the wage and not wage deductible. (SLL International Cable (ALCANTARA, supra at 195).
Specialist y NLRC, G.R. No. 172161, March 2, 2011).
Q: Can the employer require its employees to work on a rest day?
Q: What are the requisites for the creditability of facilities? ANS: No. As a general rule, the employer may not require the employees to work on a rest
ANS: The requisites are: (CVF) day. The law, however, recognizes several exceptions (UPECAA):
1. Proof must be shown that such facilities are Customarily furnished by the trade;
2. The provision of deductible facilities must be Voluntarily accepted in writing by the 1. In cases of Urgent work to be performed on the machinery, equipment, or installation;
employee; and 2. To prevent loss or damage to Perishable goods;
3. The facilities must be charged at Fair and reasonable value (Our Haus Realty 3. In case of actual or impending Emergencies caused by force majeure to prevent loss
Development Corporation. Parian, GR. No-204651, August 6, 2014). of life and property or imminent danger to public safety;
4. Where the nature of the work requires Continuous operations and the stoppage of
Weekly Rest Periods work may result in irreparable injury or loss to the employer;
5. In the event of Abnormal pressure of work due to special circumstances, where the
Q: What is a weekly rest day? employer cannot ordinarily be expected to resort to other measures; and
ANS: It is a rest period of not less than 24 consecutive hours after every 6 consecutive 6. Under other circumstances Analogous to the foregoing as determined by the
normal work days (LABOR CODE. Art. 91). Secretary of Labor and Employment (LABOR CODE Art. 92).
Note: All establishments and enterprises may operate or open for business on Sundays and Note: No employee shall be required against his will to work on his scheduled rest day
holidays provided that the employees are given the weekly rest day and the benefits except under circumstances provided in this Section. However, where an employee
provided under the law (IRR of LABOR CODE, Book III, Rule III, Sec. 2). volunteers to work on his rest day under other circumstances, he shall express such desire
in writing subject to the provisions of Section hereof regarding additional compensation
Q: Who determines the employee's weekly rest day? (LABOR CODE, Art. 92).
ANS: The employer determines and schedules the weekly rest period subject to the
following: (CSR) Q: What is the rate of additional compensation for work on a rest day, Sunday or
1. Collective bargaining agreement; holiday?
2. Rules and regulations issued by the Secretary of Labor; and ANS: The rates are as follows:
 Day Rate of Additional Compensation Last Day of the Year December 31(E.O. 292; as amended by
Work on a scheduled rest day 30% of regular wage R.A. o. 9492, Sec.26, pars.(a) and (b), Ch.
Work on Sunday when it is his 30% of regular wage 7, Book I).
established rest day
Work on special holiday 30% of regular wage Note: For movable holidays, the President is mandated under R.A. No. 9492, otherwise
Work on special holiday falling on 50% of regular wage known as an Act Rationalizing the Celebration of National Holidays, to issue a proclamation
scheduled rest day on the specific date that should be declared as a non-working day, at least 6 months prior
Work on regular holiday falling on 260% of regular wage (IRR OF THE LABOR to the holiday concerned (E.O. 292, as amended by R.A. No. 9492, Sec. 26 par. (c), Ch. 7,
scheduled rest day CODE, Art.93). Book 1).

Note: The employees and employer, however, may stipulate in their collective agreement Q: Who are excluded from the payment of holiday pay?
the payment for overtime work at rates higher than those provided by law (IRR OF THE ANS: The following are not entitled to holiday pay (GMF-Dom-Staff-10):
LABOR CODE, Art. 93, (b)). 1. Government employees;
2. Managerial employees;
Holidays 3. Field personnel;
4. Domestic helpers, persons in the personal service of another;
Q: What are the legal holidays? 5. Officers or members of a managerial Staff (2017 Handbook on Workers' Statutory
ANS: Under the Administrative Code of 1987 or E.O. No. 292, as amended by R.A. No. Monetary Benefits, p. 12); and
9849, unless otherwise modified by law, order or proclamation, the following are the regular 6. Employees of retail and service establishments regularly employing not more than
holidays in a year: 10 workers (IRR of LABOR CODE, Book III, Rule IV, Sec. 1).
Regular Holidays
New Year’s Day January 1 Q: What is holiday pay?
Maundy Thursday Movable Date ANS: Holiday pay refers to the payment of the regular daily wage for any unworked regular
Good Friday Movable Date holiday (2017 Handbook on Workers' Statutory Monetary Benefits).
Eid’lFitr Movable Date
Q: What is the rationale of holiday pay?
Eid’lAdha Movable Date
ANS: The purpose of the holiday pay is to prevent diminution of the monthly income of the
Araw ng Kagitingan Monday nearest April 9
workers on account of work interruptions. In other words, although the worker is forced to
Labor Day Monday nearest May 1
take a rest, he earns what he should earn, that is, his holiday pay. (Asian Transmission
Independence Day Monday nearest June 12
Corporation, G.R. No. 144664, March 15, 2004).
National Heroes Day Last Monday of August
Bonifacio Day Monday nearest November 30 Q: X works as a manicurist in the D'Style Barbershop which has 20 barbers and
Christmas Day December 25 manicurists. She is paid P5 per manicure that she performs. Sometimes she earns
Rizal Day Monday nearest December 30 P90 per day, but there are also occasions when there are no customers. Is she entitled
to holiday pay? Explain.
Nationwide Special Holidays ANS: Yes. X is an employee who is paid by results in a service establishment employing
Ninoy Aquino Day Monday nearest August 21 more than 10 persons. She is entitled to holiday pay which shall not be less than her average
All Saint’s Day November 1 daily earnings for the fast 7 actual working days preceding the regular holiday and in no case
shall be less than the applicable statutory minimum wage rate (IRR of LABOR CODE, B66k 1. NOT entitled to payment of holiday pay because they are paid only for work actually
Ill, Rule NV, Sec. 8, par. (b)). done. Since regular holidays are known to both school and faculty members as "no
class days," certainly the latter do not expect payment for said unworked days, and
Q: X a daily rate of P300 and is entitled to holiday pay. If he works for eight hours on this was clearly in their minds when they entered into the teaching contracts.
National Heroes Day, which falls on a Sunday, his scheduled rest day, what will be 2. However, entitled to their regular hourly rate on days declared as special holidays or
X's total compensation for such work? when classes are called off or shortened on account of typhoons, floods, rallies, and
ANS: X will get 200% of his daily rate of P300 or P600, plus 30% thereof, or a total of P780. the like because the faculty member, although forced to take a rest, does not earn
This is the following the rule that if the holiday work falls on the scheduled rest day of an what he should earn on that day (Jose Rizal College v. NLRC, G.R. No. 65482,
employee, he shall be entitled, for work not exceeding 8 hours, to an additional premium pay December, 1997)
of at least 30% of his regular holiday rate of 200% based on his regular wage rate (IRR of
CODE, Book III. Rule IV, Sec. 4). Q: What are the rules in case two regular-holidays fall on the same day?
ANS: For instance, when Araw ng Kagitingan falls on the same day as Maundy Thursday
Q: If X, whose daily rate is P300, works for over eight hours on National Heroes falls or Good Friday, covered employee is entitled to at least two hundred percent (200%) of
on a Sunday, his scheduled rest day, how much will he get for such work? his/her daily wage even if said day is unworked. Where the employee is required to work on
ANS: X will get, for each tour in excess of 8 hours, P75 which is his hourly rate for the first that day, he/she is entitled to an additional 100% of the daily wage (2018 Handbook on
8 hours plus 30% thereof or a total of P97.50. The rules provide that for work performed in Workers' Statutory Monetary Benefits 15).
excess of eight hours on a regular holiday rest day, the employee shall be paid an additional
compensation for the overtime work equivalent to his regular holiday rest day rate for the Q: What are the effects of business closure on holiday pay?
first 8 hours plus 30% thereof (IRR of LABOR CODE, Book III, Rule IV, Sec. 5). ANS: These are:
1. If it is merely a temporary or periodic shutdown and temporary cessation of work of
Q: What are the rules on holiday pay of teachers, piece workers, seafarers, seasonal an establishment-the regular holidays falling within the period shall be compensated;
workers, etc.? and
ANS: The following are the rules: 2. If the cessation of operation of an enterprise was due to business reverses as
authorized by the Secretary of Labor the regular holiday may not be paid by the
1. Private school teachers, including faculty members of colleges and universities, may employer (IRR of LABOR CODE-Book, Rule IV, Sec. 7).
not be paid for the regular holidays during semestral vacations. They shall, however,
be paid for the regular holidays during Christmas vacation; Service Charge
2. Where a covered employee is paid by results or output, such as payment on piece
work, his holiday pay shall not be less than his average daily earnings for the last Q: How are service charges/collected by, hotels, restaurants and similar
seven (7) actual working days preceding the regular holiday. Provided, however, that establishments distributed?
in no case shall the holiday pay be less than the applicable statutory minimum wage ANS: It is distributed as follows:
rate; 1. 85% for all covered employees to be equally distributed among them;
3. Seasonal workers may not be paid the required holiday pay during off-season when 2. 15% for disposition by management to answer for losses and breakages and at the
they are not at work; and discretion of the management, distribution to managerial employees (IRR of the
4. Workers who have no regular working days shall be entitled to the benefits provided LABOR CODE, Book III, Rule VI, Sec 3); and
in this Rule (IRR of LABOR CODE, Book III, Rule IV, Sec. 8). 3. The shares referred to herein shall be distributed and paid to employees not less
than once every two (2) weeks or twice a month at intervals not exceeding 16 days
Q: What is the rule on holiday pay of teaching personnel paid per lecture hour? (IRR of the LABOR CODE, Book III, Rule VI, Sec. 4).
ANS: Faculty members paid by the hour by virtue of their teaching contracts:
Q: Who are covered? allowances and monetary benefits which are not considered, or integrated, as part of the
ANS: All employees of establishments collecting service charges are covered, regardless regular, or basic, salary such as the cash equivalent of unused vacation and sick leave
of their position, designation, employment status, irrespective of the method by which their credits, overtime, premium night differential and holiday pay (Q&A on 13th Month Pay, From
wages are paid, except managerial employees (IRR of LABOR CODE, Book III, Rule VI, the Department of Labor and Employment's Bureau of Working Conditions, Official Gazette,
Sec. 2). November 14, 2014).
Note: However, these salary-related benefits should be included as part of the basic salary
Q: What are the establishments required to award service charges to their in the computation of the 13th month pay if, by individual or collective agreement or company
employees? practice or policy, the same are treated as part of the basic salary of the employees (Id.).
ANS: The establishments required to award service charges are those which collect service
charges such as hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage Q: When shall 13th month pay be paid?
clinics, bars, casinos, and gambling houses, and similar enterprises, including those entities ANS: As a general rule, it should be paid not later than December 24 of every year. The
operating primarily as private subsidiaries of the government (IRR of LABOR CODE, Book exceptions are as follows: (½-CA)
III, Rule VI, Sec. 1). 1. The employer may give to his employees ½ of the required 13th month pay before
the opening of the regular school year and the other half on or before the 24th of
Q: What happens when the service charge is abolished? December of every year (DOLE Labor Advisory No. 12, Series of 2013);
ANS: In case the service charge is abolished, the share of the covered employees shall be 2. If otherwise provided in the CBA; or
considered integrated in their wages. The basis of the amount to be integrated shall be the 3. If otherwise provided in any other Agreement, ie., employment contract.
average monthly share of each employee for the past 12 months immediately preceding the
abolition or withdrawal of such charges (IRR of LABOR CODE, Book 1, Rule VI, Sec. 5). Q: What is the formula in computing for 13th month pay?
ANS: The formula is as follows:
Thirteenth Month Pay Total basic salary earned during the year
= 13𝑡ℎ 𝑚𝑜𝑛𝑡ℎ 𝑝𝑎𝑦
12 𝑚𝑜𝑛𝑡ℎ𝑠
Q: What is thirteenth (13th) month pay?
ANS: Thirteenth-month pay shall mean one twelfth (1/12) of the basic salary of an employee (2018 Handbook on Workers' Statutory Benefit, p. 39)
earned within a calendar year (13th Month Pay Law or P.D. No. 851 (Requiring All
Employers to Pay their Employees a 13-month pay Sec. 2, par. (a)). Q: Who are excluded from the coverage of the 13th month pay?
ANS: The following are excluded from the coverage of the 13 Month Pay Law (D-GEE)
Q: What is the nature of 13th month pay?
ANS: The payment of 13th month pay is statutory grant, and compliance therewith is 1. Distressed employers such as:
mandatory. This benefit is deemed written into every Collective Bargaining Agreement (PAL a. Those which are currently incurring substantial losses; or
v. NLRC, G.R. No 114280, GR. No 115224, July 26, 1996). Hence, benefits in the form of b. In the case of non-profit institutions and organizations, where their income has
food or free electricity are not proper substitutes for the 13th month pay. So also, year-end consistently declined by more than 40% of their normal income for the last two years;
rewards for loyalty and service and other non-monetary benefits cannot be considered as Note: Under Section 7 of the IRR of P.D. No. 851, distressed employers shall qualify
payment in lieu of 13th month pay (Francis. Minister of Labor, G.R Nos. 72616-17 March 6, for exemption from the requirement only upon prior authorization by the Secretary of
1989). Labor (Central Azucarera de Tarlac v. Central Azucarera de Tarlac Labor Union-NL
GRAND 188949 July 26, 2010)
Q: What does "basic salary" include for purposes of computing the 13th month pay? 2. The Government and any of its political subdivisions including GOCCs, except those
ANS: Basic salary includes a remunerations or earnings paid by an employer to an corporations operating essentially as private subsidiaries of the Government;
employee for services rendered including cost-of-living allowances. It does not include
 3. Employer already paying their employees 13th pay or more in a calendar year of its (representing 1/12 of the 13th month pay) and the cash equivalent of not more than five days
equivalent at the time of this issuance: of service incentive leaves or a total of 22.5 days' salary (IRR of the Retirement Pay Law,
Note: Its equivalent includes: Rule II, Sec. 5.2; Capitol Wireless, Inc. v. Confesor, G.R. No. 117174, November 13, 1996).
a. Christmas bonus,
b. Midyear bonds; B. WAGES
c. Profit-sharing payments, and d. Other cash bonuses not less than 1/12 of
the basic salary (P.D. No. 851 Sec. 3) Q: What is basic wage?
4. Employers of those who are paid on: ANS: Basic wage means all remuneration or earnings paid by an employer to a worker for
a. Purely commission basis; services rendered on normal working days and hours but does not include cost-of-living
b. Boundary basis; allowances, profit sharing payments premium payments, 13th month pay or other monetary
c. Task basis, or benefits which are not considered as part of or integrated into the regular salary of the
d. A fixed amount for performing a specific work, except where the workers are paid workers on the date the Act became effective (IRR of LABOR CODE, Rule VIl, Book III, Sec.
on piece-rate basis in which case the employer shall be covered by this issuance 1(n)).
insofar as such workers are concerned (P.D. No. 851, Sec. 3).
Q: What is statutory minimum wage?
Q: Are extras, casual, and seasonal workers entitled to 13th month pay? ANS: Statutory Minimum Wage is the lowest wage fixed by law that an employer can pay
ANS: Yes. All rank-and-file employees regardless of their designation or employment status, his workers (IRR of LABOR CODE, Rale VII, Book III, Sec (0)).
irrespective of the method by which their wages are paid, are entitled to 13th month pay,
provided that they have worked for at least one month during a calendar year. They are Q: What are the attributes of wage?
entitled to the proportionate 13 month pay (In Re: Bagong Pilipino World's Fashion Workers ANS: Wage paid to any employee has the following attributes:
Union, Opinion of the Bureau of Working Conditions, December 19, 1987, citing P.D. No. 1. It is the remuneration or earnings, however designated, for work done or to be done
851 as amended by Memorandum Order No. 28). for services rendered or to be rendered;
2. Capable of being expressed in terms of money, whether fired or ascertained on a
Q: Discuss commissions vis-à-vis 13th month pay. time, task piece, or commission basis or other method of calculating the same;
ANS: In remunerative schemes consisting of a fixed or guaranteed wage plus commission, 3. Which is payable by an employer to an employee under a written or unwritten
the fixed or guaranteed wage is patently the "basic salary" for this is what the employee contract of employment for work come to be done or for services rendered or to be
receives for a standard work period. Commissions are given for extra efforts exerted in rendered; and
consummating sales or other related transactions. They are, as such, additional pay, which 4. Includes the fair and reasonable value, as determined by the Secretary of Labor, of
this Court has made clear do not form part of the "basic salary" (Boie Takeda Chemicals, board, lodging, or other facilities customarily furnished by the employer to the
Inc. v. de la Serna, G.R. No. 92174 December 10, 1993; Philippine Fuji Xerox Corporation employee (LABOR CODE, Art. 97, par. (1)
v. Trajano and Philippine Fuji Xerox Employees Union, G.R. No. 102552, December 10, Note: Fair and reasonable value shall not include any profit to the employer, or to any person
1993). affiliated with the employer

Q: Is 13th month pay part of the retirement benefits? Q: What is cash wage?
ANS: Yes. Thirteenth month pay is included as part of the retirement benefits that a retiring ANS: The minimum wage rates shall be basic, cash wages without deducting therefrom
employee is entitled to under Article 287 of the Labor Code. It is provided therein that a whatever benefits, supplements or allowances which the employees enjoy free of charge
retiring employee is entitled to a retirement pay equivalent to ½ months' salary for every year aside from the basic pay (IRR of LABOR CODE, Sec. 4, Rule VII-A).
of service, at least six (6) months being considered as one whole year. The same article
provides that the term "1/2-month salary” shall mean the salary for 15 days plus 2.5 days
Q: Who are excluded from the coverage of the Title on Wages of the Labor Code? ANS: In view of RA. No. 7277, the wage rate of qualified handicapped worker is 100% of
ANS: The following persons are excluded from the coverage of Title II, Book III of the Labor the applicable minimum wage. A qualified-disabled employee shall be subject to the same
Code: (HN-CCF) terms and conditions of employment and the same compensation, privileges, benefits, fringe
1. Household or domestic helpers, including family drivers and persons in the personal benefits, Incentives or allowances as qualified able bodied person (Sec. 5. Title RA 727 or
service of another; the Magna Carta Yon Disabled Persons). Wage Orders issued by the Regional Boards
2. Home workers who are engaged in Needlework; normally reflect this principle. For instance, as shown in Section 7 of Wage Order No. NCR-
3. Workers employed in Cottage industries duly registered in accordance with law who 18 quoted above, the full amount of the minimum wage rate prescribed thereunder is granted
perform their work in their homes; to a PWD. Moreover, the employment agreements with persons with disability are deemed
4. Workers in duly registered Cooperatives as recommended by the Bureau of automatically modified insofar as their wage clauses are concerned to reflect the said legally
Cooperative Development upon the approval of the Secretary of Labor; and mandated increases.
5. Farm tenancy or leasehold (LABOR CODE, Art. 98).
Q: What is a "commission"?
Payment of Wages ANS: Commission is the recompense, compensation, or reward of an employee, agent,
salesman, executor, trustee, receiver, factor, broker or bailee, when the same is calculated
Q: What is the minimum wage of "workers paid by results'? as a percentage on the amount of his transactions or on the profit of the principal (PH
ANS: All workers paid by results, including those who are paid on piecework, takay, pakyaw, Agricultural Commercial & Industrial Workers Union [PACIWU]-TUCP v. NLRC, G.R. No.
or task basis, shall receive not less than the applicable statutory minimum wage rates 107994, August 14, 1995).
prescribed under the Act for the normal working hours which shall not exceed 8 hours work
a day, or a proportion thereof for work of less than the normal working hours (IRR of RA No. Q: What commissions are not deemed part of salary?
6727, otherwise known as Wage Rationalization Act, Sec. 9) ANS: Profit-sharing or bonus type commissions may be excluded when determining the
"basic salary." An example of which are commissions paid to or received by medical
Q: What is the basis for determining rates for piece, output, or contract work? representatives or by rank-and-file employees as productivity bonuses (Boie-Takeda
ANS: The basis for the establishment of rates for piece, output or contract work is the Chemicals, Inc. v. Dela Sema, G.R. No. 92174, December 10, 1993; PH Fuji Xerox Corp. v.
performance of an ordinary worker of minimum skill or ability. An ordinary worker of minimum Trajano, G.R. No. 102552, December 10, 1993).
skill or ability is the average worker of the lowest producing group representing 50% of the
total number of employees engaged in similar employment in a particular establishment, Prohibitions Regarding Wages
excluding learners, apprentice and persons with disability employed therein (IRR of LABOR
COD Book III, VII-A, Sec.5) Q: May an employer make any deduction from the wages of his employees?
ANS: As a general rule, wage deduction is strictly prohibited. However, there are allowable
Q: What is the minimum wage of apprentices and learners? deductions as provided: (IUA-LA-UWMP-WWJC)
ANS: Wages of apprentices and learners shall in no case be less than 75% of the applicable
statutory minimum wage rates (IRR of RA 6727 or the Wage Rationalization Act, Sec 10). 1. Worker's Insurance premium advanced by the employer with the consent of the
employee;
Q: What is the wage rate of a learner or an apprentice? 2. Union dues, where the right to check-off has been recognized by the employer; and
ANS: The wage rate of a learner or an apprentice is 75% of the statutory minimum wage 3. Cases where the employer is Authorized by law or regulations issued by the
rate (IRR FRA No 6727, Sec. 10) Secretary of Labor (LABOR CODE, Art. 113);
4. Deductions for Loss or damage under Article 114 of the Labor Code;
Q: What is the wage rate of a person with disability (PWD)? 5. Deductions made for Agency fee from non-union members who accept the benefits
of deduction under the CBA negotiated by the recognized or certified bargaining
 unions. This form of deduction does not require the written authorization of the non- Q: What is wage distortion?
union member concerned (LABOR CODE. Art 259, par. (e)); ANS: It is a situation where an increase in prescribed wage rates results in the elimination
6. Union service fee; or severe contraction of intentional quantitative differences in wage or salary rates between
7. When the deductions are with the Written authorization of the employee for payment and among employee groups in an establishment as to effectively obliterate the distinctions
to a third person and the employer agrees to do so, provided that the latter does not embodied in such wage structure based on skills, length of service, or other logical bases of
receive any pecuniary benefit, directly or indirectly, from the transaction; differentiation (LABOR CODE, Art. 124).
8. Deductions for value of Meal and other facilities; Note: Wage distortion presupposes an increase in the compensation of the lower pay class
9. Deductions from Premiums for SSS, PhilHealth, Employees' compensation and in an office hierarchy without a corresponding raise for high level employees in the same
PAG-IBIG; region of the country, resulting in the elimination or severe diminution of the distinction
10. Withholding tax mandated under the National Internal Revenue Code; between the two groups or classes (Prubankers Ass'n. v. PBTC, G.R. No.131247, January
11. Withholding of wages because of the employee's debt to the employer, which is 25, 1999).
already due;
12. Deductions made pursuant to a court Judgment against the worker under the Q: What are the elements of wage distortion?
circumstances where the wages may be the subject or attachment or execution but ANS: These are: (SHED)
only for debts incurred for food, clothing, shelter and medical attendance When 1. A Significant change or increase the salary rate of a lower pay class without a
deductions from wages are ordered by the court; and corresponding increase in the salary rate of a higher one;
13. Salary deduction of a member of a legally established Cooperative (CHAN. supra at 2. An existing Hierarchy of positions with corresponding salary rates;
661) 3. The Elimination of the distinction between the two groups or classes; and
4. The Distortion exists in the same region of the country (Alliance Trade Unions v.
Q: Can the employer Interfere with the disposition of the domestic worker's wage? NLRC/GR. NO 140689, February 17, 2004)
ANS: No. It shall be unlawful for the employer to interfere with the freedom of any domestic
worker to dispose of the latter's wages. The employer shall not force, compel or oblige the Q: What is the formula in determining "distortion adjustment"?
domestic worker to purchase merchandise, commodities, or other properties from the ANS: Any formula may be agreed upon and used by the parties seeking to cure the wage
employer or from any other person, or otherwise make use of any store or services of such distortion The Court however approved of the following formula as a good formula to use in
employer or any other person (R.A. No. 10361, otherwise known as the Batas Kasambahay, the case of Metropolitan Bank & Trust Company Employees Union-ALU-TUCP v. NLRC
Sec. 27). (G.R. No 102636, September 10, 1993).

Q: Can the employer withhold the wages of the domestic worker? 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 𝑅𝑎𝑡𝑒
ANS: No. It shall be unlawful for an employer, directly or indirectly, to withhold the wages of 𝐷𝑖𝑠𝑡𝑜𝑟𝑡𝑖𝑜𝑛 𝐴𝑑𝑗𝑢𝑠𝑡𝑚𝑒𝑛𝑡 = 𝑥 𝑃𝑟𝑒𝑠𝑐𝑟𝑖𝑏𝑒𝑑 𝐼𝑛𝑐𝑟𝑒𝑎𝑠𝑒
𝐴𝑐𝑡𝑢𝑎𝑙 𝑅𝑎𝑡𝑒 𝑜𝑓 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑒
the domestic worker, except that if the domestic worker leaves without any justifiable reason,
any unpaid salary for a period not exceeding 15 days shall be forfeited. Likewise, the Illustration: X receives P350 per day. The applicable minimum wage for is position is P280.
employer shall not induce the domestic worker to give up any part of the wages by force, The Regional Board prescribed a/P25 for a lower pay class.
stealth, intimidation, threat or by any other means whatsoever (R.A. No. 10361, Sec. 8).
Note: If the employer does so, he/she may be held liable for economic abuse, Economic 𝑃280
abuse refers to the withholding of the Kasambahay's wage or a part of it or any act which 𝐷𝑖𝑠𝑡𝑜𝑟𝑡𝑖𝑜𝑛 𝐴𝑑𝑗𝑢𝑠𝑡𝑚𝑒𝑛𝑡 = 𝑥 𝑃25 = 0.8 𝑥 𝑃25 = 𝑃20
𝑃350
induce the Kasambahay to give up any part of the wage by force, stealth, intimidation, threat
or by any other means whatsoever (Sec. 2(d), Rule X. IRR of Batas Kasambahay). New Rate of X = Former Rate + Distortion Adjustment
=P350+P20
Wage Distortion =P370
 which recognize the right of employees to benefits which were voluntarily given by the
Q: How are wage distortions resolved? employer and which ripened into company practice (Arco Metal Products, Inc. v. Samahan
ANS: Wage distortions are resolved as follows: ng mga Manggagawa sa Arco-Metal NAFLU, G.R. No. 170734, May 14, 2008)

Unionized establishment Non-unionized establishment Q: What are the exceptions to the non-diminution rule?
Employer and the union shall negotiate to Employer and the workers shall endeavor ANS: These are (CorN-WaRe-PCI):
correct the distortions using the grievance to correct the wage distortion. If the 1. Correction of error;
machinery procedure in the collective negotiation fails, any dispute arising 2. Negotiated benefits;
bargaining agreement. therefrom shall be settled through the 3. Wage order compliance;
National Conciliation and Mediation Board 4. Benefits on Reimbursement basis;
(NCMB). 5. Reclassification of Position;
If it remains unresolved, it shall be decided If it remains unresolved for 10 calendar 6. Contingent benefits or Conditional bonus; and
through voluntary arbitration within 10 days of conciliation, the dispute shall be 7. Productivity Incentives (Mabeza v. NLRC, G.R. No. 118506, April 18, 1997).
calendar days from the time the dispute referred to the appropriate branch of the
was referred for voluntary arbitration. NLRC which shall conduct continuous Q: What are the requisites of diminution of benefits?
hearings and decide the matter within ANS: It must be shown that: (CUP-E)
twenty (20) calendar days from the time it 1. The practice is Consistent and deliberate;
was submitted for compulsory arbitration 2. The discontinuance is done Unilaterally by the employer;
(IRR of R.A. No. 6727, Chapter III, Sec.7). 3. The grant or benefit is founded on a policy or has ripened into a Practice over a long
period; and
Note: The pendency of the dispute arising from a wage distortion shall not in any way delay 4. The practice is not due to Error in the construction or application of a doubtful or
the applicability of any wage increase prescribed pursuant to the provisions of law or Wage difficult question of law (TSPIC Corp v. TSPIC Employees Union, G.R. No. 163419,
Order (IRR of R.A. No. 6727, Chapter III, Sec. 7). February 13, 2008)

Non-Diminution of Benefits Q: What are the criteria that may be used to determine the existence of company
practice?
Q: Is diminution of benefits allowed? ANS: To be considered as a regular company practice, the employee must prove the
ANS: As a general rule, it is prohibited. Nothing in the Labor Code shall be construed to following by substantial evidence:
eliminate or in any way diminish supplements, or other employee benefits being enjoyed at 1. That the giving of the benefit is done over a long period of time;
the time of promulgation of this Code (LABOR CODE, Art. 100). Benefits being given to 2. That it has been made consistently and deliberately (Vergara v. Coca-Cola Bottlers
employees cannot be taken back or reduced unilaterally by the employer because the PHL, Inc., G.R. No. 176985, April 1, 2013); and
benefit has become part of the employment contract, written or unwritten. 3. The act should not be a product of erroneous interpretations or construction of a
doubtful or difficult question of law or provision in the CBA (National Sugar Refineries
Q: What is the basis of the principle of non-diminution of benefits? Corporation v. NLRC, G.R. No. 74156, June 29, 1988).
ANS: The principle of non-diminution of benefits is founded on the Constitutional mandate Note: Jurisprudence gives credence to the regularity and deliberateness of the grant of
to "protect the rights of workers and promote their welfare," and "to afford labor full benefits over a period of time (Vergara v. Coca-Cola Bottlers PHL, Inc., supra).
protection." Said mandate in-turn is the basis of Article 4 of the Labor Code which states that
"all doubts in the implementation and interpretation of this Code, including its implementing
rules and regulations shall be rendered in favor of labor Jurisprudence is replete with cases