House vows stiffer penalties to straighten minimum wage offenders

“Labor workers are ‘a company’s greatest asset’ according to businesswoman Anne Mulcahy, and these assets should receive the right wages and benefits they so rightfully deserve,” Alvarez said. (Photo: Philippine News Agency)

MANILA–On Labor Day, the House of Representatives vowed to curb the illegal practice of non-compliance of employers with the prescribed minimum wage rates.

As Congress reconvenes this week, the House committee on labor and employment will tackle pertinent House bills that seek to uphold workers’ right to their wages and to impose stiffer penalties for minimum wage offenders.

Speaker Pantaleon Alvarez has filed House Bill 5018, which seeks to amend the Labor Code of the Philippines, to ensure the employees’ right to their wages, including wage-related benefits, and social security and welfare benefits.

Meanwhile, HB 356, authored by DIWA Partylist Rep. Emmeline Aglipay-Villar, seeks to increase the penalties for non-compliance with the government prescribed minimum wages.

Alvarez, in his explanatory note of HB 5018, said the current penalties do not serve as effective deterrents to “stop the unjust and unreasonable conditions” by “unjust employers”.

“Labor workers are ‘a company’s greatest asset’ according to businesswoman Anne Mulcahy, and these assets should receive the right wages and benefits they so rightfully deserve,” Alvarez said.

HB 5018 proposes stiffer penalties so as to impose stricter guidelines for the employers.

The Regional Tripartite Wages and Productivity Board or the Regional Wage Board imposes the minimum wage in their respective regions and employees in the Philippines. It must be paid no less than the specified rates.

The bill will also uphold the economic and social security of workers by providing basic entitlements to wage-related benefits such as the Social Security System (SSS), Philippine Health Insurance Corp. (PhilHealth), and the Home Development Mutual Fund or PAG-IBIG Fund.

“Upon employment, every new employee shall be covered by the SSS, PhilHealth, Pag-IBIG, and other social security and welfare benefits,” the bill read.

The bill also mandates the payment of the wages and wage-related benefits through automated teller machines (ATM) of banks.

Employers who fail to pay the prescribed wages, including wage-related benefits, shall be meted a fine of “not less than PHP200,000 nor more than PHP500,000, and or imprisonment of not less than four years nor more than six years or both such fine and imprisonment at the discretion of the court.”

Moreover, the employer concerned shall be ordered to pay an amount equivalent to double the unpaid wages owing the employee.

On the other hand, HB 356 seeks to protect private sector minimum wage earners by increasing the penalty imposed on employers for non-compliance with the applicable minimum wage rates.

Aglipay-Villar stressed the minimum wage rates set by the Regional Wage Board are lower than the ideal living wage, or the “amount of family income needed to provide for the family’s food and non-expenditures with sufficient allowance for savings and investments”.

According to Department of Labor and Employment data, one in every five workers is not paid the applicable minimum wage.

HB 356 seeks to amend Section 12 of Republic Act 6727, Otherwise Known As the “Wage Rationalization Act”.

HB 356 proposes a fine of at least PHP50,000 but not more than PHP300,000, plus moral damages or at least PHP50,000 for each affected worker and the costs of litigation, and or imprisonment of not less than two years nor more than four years, or both such fine and imprisonment at the discretion of the court.