Businesses can afford new wage rates – DOLE

THE Department of Labor and Employment (DOLE-6) assured that businesses would not be forced to downsize as they can afford the new daily minimum wage rates in Western Visayas which take effect today, July 12, 2018.

More or less 3,000 private firms are expected to comply with Wage Order No. 24, which imposes daily salaries of P295 and P365 for minimum wage earners, as approved by the Regional Tripartite Wages and Productivity Board (RTWPB-6).

DOLE-6 regional director and RTWPB-6 chairperson Johnson Cañete said they have two considerations in approving the rate adjustments – the poverty threshold and average wage in the region.

Poverty threshold means that workers should not earn below P289.

“If you look at our new wage order, none of the salaries is below P289,” he said.

He added that the new rates are below the average wage in the region which is P400 based on data from the Philippine Statistics Authority (PSA).

“So with that, we are more comfortable that the new rates can be afforded by the employers because they are below the average wage of P400. Some companies are even giving more than that,” Cañete said.

RTWPB-6 approved a P13.50 to P41.50 wage increase with a cost of living allowance (COLA) component on the daily minimum pay of workers in the private sector.

Workers of non-agricultural, industrial, and commercial firms employing more than 10 employees will receive P365 daily, up from P323.50. It is derived from the P26.50 hike plus P15 COLA.

Workers in non-agricultural, industrial, and commercial companies employing less than 10 workers will have a basic salary of P295 from P271.50, after an increase of P18.50 plus P5 COLA.

For the agricultural sector, the minimum salary for plantation workers was increased from P281.50 to P295, (P8.50 hike plus P5 COLA).

For non-plantation workers, the new rate is P295 from the previous P271.50 after an increase of P18.50 and P5 COLA.

The Iloilo Business Club earlier said the new wage order might result in the downsizing of companies and mass layoffs.

The club, representing about 350 businesses in Iloilo City and Province, strongly opposed the wage order, citing that “the employees will have fewer chances of absorbing spikes in the operating cause of business warranting the downsizing in the number of employees to prevent losses.”

But Cañete stressed that other companies in the region are even paying their workers with more than P400.

“Can the Iloilo Business Club and the Chamber of Commerce in Panay afford to pay P365? Yes, because the average wage here is P400,” he said.

He said that when Wage Order No. 23 was passed last year, he could not recall a single company that downsized or terminated its employee due to the wage increase.

“I will have to check. But I will take my one centavo guess that no companies downsized because of the new wage order. Remember, it is business, so you can continue existing surely,” he said.

He added that under the law, a company should submit an establishment report to DOLE 30 days prior to termination effective retrenchment, downsizing, or redundancy.

“That is part of the due notice requirement. That you will inform your employee that you will terminate them either through redundancy or economic losses,” he said.

But he said that firms that are aggrieved or feel that they are affected by the approved rates have 10 days upon the effectivity of the wage order to file for an exemption.

To note, two firms have applied for exemptions last year but were denied by the wage board.

Cañete clarified that those covered by the wage order are minimum earners who work eight hours daily and have employee-employer relationships.



Cañete said they also have a set of inspectors who will monitor the compliance of the private companies.

He also encouraged employees to file a complaint, which will be treated with confidentiality, if their company fails to implement the rate adjustment.

Non-compliance could lead to criminal cases, he said.



Meanwhile, the RTWPB-6 said it would delay the implementation of the wage hike in Boracay Island in Malay, Aklan in consideration of the effects of the six-month closure.

Cañete said the new salary rates would apply three months after the opening of Boracay Island on October 26.

“So if it will re-open in October, the wage order will take effect on January 26,” he said.

He noted that the effectivity will be on the actual reopening of the island, not of the establishments as the Boracay Inter-Agency Task Force agreed that only compliant businesses will be allowed to operate.

A moratorium is also in force in Aklan province as the new wage order will take effect in November, or one month after the reopening.

“The board took into consideration that the province is also collaterally damaged by the closure,” Cañete said.

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