Yeddah Marie M. Garzon BSBA -HRM 302 Oct.
30, 2024
LABOR STANDARDS
Discussion Questions: #3
Topic: Wages and Wage Fixing
1. Define wage.
It is the remuneration or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained on a time, task, piece,
or commission basis, or other method of calculating the same, payable by an Er to
an Ee under a written or unwritten contract of employment for work done or to be
done, or for services rendered or to be rendered."
2. Define salary.
A fixed regular payment, typically paid on a monthly or biweekly basis but often
expressed as an annual sum, made by an employer to an employee, especially a
professional or white-collar worker.
3. Is there a distinction between ‘wage’ and ‘salary’ under the concept of Labor
Laws? Explain.
The term "wages" as distinguished from "salary," applies to the compensation for
manual labor, skilled or unskilled, paid at stated times and measured by the day,
week, month, or season, while "salary" denotes a higher degree of employment
and implies a position of office.
4. Explain the concept of ‘’Fair day’s wage for a fair day’s labor’’.
A fair day’s wage for a fair day’s labor is the principle behind no work, no
pay
"If there is no work performed by the employee, without the fault of the Er, there
can be no wage or pay. Burden of economic loss suffered by employee shall not
be shifted to the Er.
5. Explain the concept of ‘’Equal day for equal work’’.
Equal pay for equal work is the concept of labor rights that individuals in the
same workplace be given equal pay. It is most commonly used in the context of
sexual discrimination, in relation to the gender pay gap. Equal pay relates to the
full range of payments and benefits, including basic pay, non-salary payments,
bonuses and allowances.
6. Explain the right to ‘Living wage’. Provide the basis under the 1987 Constitution.
"The minimum wage fixed by law is mandatory; thus, it is non-waivable and
non-negotiable. The enactment is compulsory in nature in order to ensure decent
living conditions." The right to a living wage is guaranteed under Article XIII,
Section 3 of the 1987 Constitution, which states: "The State shall afford full
protection to labor, local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities for all. They shall be
entitled to security of tenure, humane conditions of work, and a living wage.
7. Differentiate Facilities vs. Supplement. Define each.
"Supplements" constitute extra remuneration or special privileges or benefits
given to or received by the laborers over and above their ordinary earnings or
wages. "Facilities", on the other hand, are items of expense necessary for the
laborer’s and his family’s existence and subsistence, so that by express provision
of the law (sec. 2[g]) they form part of the wage and when furnished by the
employer are deductible therefrom, since they are not so furnished, the laborer
would spend and pay for them just the same.
8. What are the requisites for facilities to be considered as an integral part of an
employee wage (deductibility)?
Section 1. Deductibility of the value of facilities. In order that the fair and
reasonable value of the facilities may be deducted from the wages of employees,
the following requisites must concur:
Facilities subject of valuation are customarily furnished by the employer;
Deductibility of the value of the facilities must have been voluntarily
accepted in writing by the employee; and
Facilities must be charged at a fair and reasonable value.
9. What is ‘’worker’s lien’’ as provided under Article 1707 of the New Civil Code?
Article 1707 states: "The laborer or workman’s wages shall be a lien on the goods
manufactured or the work done." This lien ensures that workers have a security
interest in their work or the products they produce until they receive their due
wages.
10. Are wages exempt from Execution and/or Attachment? (See Article 1708 and
Article 1709 of the New Civil Code)
Article 1708 of the New Civil Code states: "The laborer’s wages shall not be
subject to execution or attachment, except for debts incurred for food, shelter,
clothing, and medical attendance."
Article 1709 adds: "The employer shall neither seize nor retain any tool or other
articles belonging to the laborer."
These provisions generally protect wages from being seized for debts, ensuring
workers can maintain their basic needs. However, an exception applies if the debt
is for necessities such as food, shelter, clothing, or medical care, in which case
wages may be used to settle such debts.
11. What are the 4 methods of fixing compensation?
Time-based compensation - Employees are paid based on the amount of time they
work, such as hourly wages or annual salaries.
Piece-rate compensation - Employees are paid based on the quantity of work they
complete, common in manufacturing or agriculture.
Commission-based compensation - Employees earn a percentage of the sales they
generate, often used in sales positions.
Performance-based compensation - Employees are rewarded based on their
performance, which can include bonuses, incentives, and profit-sharing schemes.
12. Who has the power to determine and fix minimum wage rates? (Article 22(b) of
the Labor Code P.D. 442, as amended by R.A. 7641).
Article 22. Mandatory remittance of foreign exchange earnings. It shall be
mandatory for all Filipino workers abroad to remit a portion of their foreign
exchange earnings to their families, dependents, and/or beneficiaries in the
country in accordance with rules and regulations prescribed by the Secretary of
Labor.
13. Who are considered a proper party to file an application for minimum wage
fixing?
Any legitimate organization of workers or employers with substantial interest in
the region, province, or industry determined by the Board and who stands to be
directly affected by the Commission/Board proceedings, orders, decision, or
resolutions are considered proper parties to file an application for minimum wage
fixing.
14. What are the standards/criteria that need to be considered in fixing the
minimum wage?
In determining the level of minimum wages, account should be taken of the
following criteria, amongst others:
(a) the needs of workers and their families;
(b) the general level of wages in the country;
(c) the cost of living and changes therein;
(d) social security benefits;
(e) the relative living standards of other social groups;
(f) economic factors, including the requirements of economic development,
levels of productivity and the desirability of attaining and maintaining a high
level of employment.
15. What are the Advantages and Disadvantages of Minimum wage? Give 6
advantages and 6 disadvantages.
Advantages:
Higher wages can lead to increased productivity, higher quality work, and
reduced turnover rates.
Minimum wages ensure that workers receive a fair wage for their labor. This
helps prevent exploitation and provides a baseline for workers to cover their
basic living expenses.
Minimum wages can help reduce poverty and income inequality. When
workers earn a decent wage, they can better meet their basic needs and those
of their families.
A significant percentage of every paycheck ends up back in the economy, as
employees pay for the necessities as well as the products and services that
they want. The more people earn, the more they are inclined to spend not only
on the basics such as housing and food, but also on entertainment, travel and
consumer goods.It promotes local and regional economic growth.
Minimum wages can lead to improved health, reduced worker exploitation,
and enhanced social cohesion and stability.
Minimum wages can have "spillover" effects on wages above the minimum.
This can happen when employers or workers want to maintain differences in
job status, or higher wages for workers with more seniority or skill.
Disadvantages:
Minimum wages can reduce employment opportunities for entry-level
workers, particularly those who are young, inexperienced, less educated, or
women.
Minimum wages can reduce the availability of on-the-job training
opportunities, which can reduce lifetime income for young workers.
Minimum wages can discourage employers from hiring low-wage, low-skill
workers.
If businesses pass on the cost of minimum wages to consumers, it can lead to
inflation.
Minimum wage laws mandate high wages for low-wage workers, but may not
provide higher earnings for low-income families.
Business owners may find it more cost-effective to hire a higher-paid,
experienced worker or invest in automationThe wage must keep increasing for
it to be relevant.
16. Explain the concept of wage distortion.
Wage Distortion refers to a situation where an increase in the prescribed wage
rates results in the elimination or severe contraction of intentional quantitative
difference in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service or other logical bases of differentiation.
17. What are the elements of wage distortion?
1. An existing hierarchy of positions with corresponding salary rates.
2. A significant change in the salary rate of a lower pay class without a concomitant
increase in the salary rate of a higher one.
3. The elimination of the distinction between the two levels.
4. The existence of the distortion in the same region of the country.
