In Region 10, workers to receive P12 daily wage increase

Labor and Employment Secretary Rosalinda Dimapilis-Baldoz announced that the Regional Wage and Productivity Board (RTWPB) of Region 10 has approved a wage order mandating a P12 daily wage increase for all private sector minimum wage earners in the region.

Citing a report of DOLE Regional Office No. 10 Regional Director and RTWPB chairperson Raymundo G. Agravante, Baldoz said the new minimum wage increase will take effect on 3 July after the RTWPB published the new minimum wage order on 18 June. “This is the 18th wage increase in Region 10 since R.A. 6727, or The Wage Rationalization Act, became a law on 9 June 1989,” Baldoz said.

Agravante said in his report the new wage order, Wage Order RX-18, raises the minimum wage in the region to P318 for workers in the non-agriculture sector and to P306 for workers in the agricultural sector under the Category I, which covers the cities of Cagayan de Oro and Iligan and the municipalities of Tagoloan, Villanueva, and Jasaan, Misamis Oriental.

It also ups the minimum wage rate to P313 for workers in the non-agriculture sector and P301 for workers in the agricultural sector under Category II, which covers the cities of Malaybalay, Valencia, Gingoog, El Salvador, and Ozamiz and the municipalities of Maramag, Quezon, and Manolo Fortich.

In Category III, the new minimum wage rate of P308 applies for workers in the non-agricultural sector and P296 for the agricultural sector in the cities of Oroquieta and Tangub and the municipalities of Lugait, Opol, and Mambajao. Included in this category are all the establishments employing ten workers or less. For other areas not covered by the three categories, hence falling under Category IV, establishments shall now pay a new minimum wage rate of P303 to workers in the non-agricultural sector and P291 to workers in the agricultural sector.

Agravante informed the Secretary that in Region 10, all the minimum wage rates are already above the poverty threshold, a key goal of the DOLE this 2015.

“Under the second-tier of the two-tier minimum wage system reform, the RTWPB has already issued an Advisory on the Implementation of Productivity-Based Incentive Scheme for the Bus Transport Industry which shall serve as guidelines for private establishments to set the range of productivity bonuses and incentives that an enterprise or industry may provide based on the agreement between workers and management,” Agravante reported.

The two-tiered wage system, initiated by Secretary Baldoz in 2012, is a wage reform where the first tier is the mandated minimum wage, or floor wage, set by RTWPBs, while the second-tier is the non-mandatory component that provides workers’ pay increases and benefits based on productivity-based formulas contained in advisories also issued by the RTWPBs. The advisories guide industries in developing and implementing productivity improvement programs, productivity-based incentives, and profit- or gain-sharing schemes that workers and employers agree as basis for additional pay or incentives.

Under the reform, the minimum wage is viewed as a social safety net, as it is, to protect the most vulnerable sectors, while the productivity-based pay is regarded as the more appropriate mechanism of rewarding workers’ productivity as their progressive contribution to enterprise growth and competitiveness.

In issuing a new minimum wage order, Director Agravante said the RTWPB—composed of representatives of labor, management, and the government, specifically the Department of Trade and Industry, National Economic Development Authority, and the DOLE—took into thorough consideration several factors, including the erosion in the minimum wage, inflation rate, possible impact of the minimum wage adjustment on prices of goods and services, as well as on employment; movements in the consumer price index, the current economic condition in the region, employers’ ability to pay, and the results of its continuing studies, sectoral consultations, and public hearings.

“The decision of the RTWPB-10 to adjust the minimum wage was consistent with the government’s policy of granting regular, moderate, and predictable minimum wage adjustments, taking into consideration the needs of workers and their families, as well as the need to maintain stability in the business environment within the framework of the two-tiered wage system reform,” Director Agravante said.

He added that the P12 increase in the minimum wage will directly benefit some 30,800 minimum wage earners in Region 10, or based on the 2014 Labor Force Survey, 70 percent of 44,000 new labor force entrants every year who are considered wage earners and who also continue to be exempted from paying income tax on their wage and on their hazard pay, holiday pay, night shift differential, and overtime pay.

“The minimum wage earners will also enjoy a higher 13th month pay and increased social security coverage,” Agravante said.

Baldoz instructed Agravante to disseminate information on the new wage order, raise public awareness and understanding, and educate workers and employers to encourage voluntary compliance. With regards this directive, Agravante said he had already mobilized the region’s labor laws compliance officers and had instructed the RTWPB to schedule wage clinics in the provinces. (DOLE)