Workers in private establishments in Region IV-A will get an increase in their prevailing minimum wage (Tier 1) and productivity-based pay (Tier 2) starting 15 May 2012, following a two-tiered wage order issued by the Regional Tripartite Wage and Productivity Board, Secretary Rosalinda Dimapilis-Baldoz said.
The new wage order grants an adjustment in the basic pay of minimum wage earners by as much as P18 per day, especially those whose minimum wage rates fall below the prescribed floor wage of P255 per day.
With the new wage order, the highest minimum wage will be set at P349.50 per day in non-agriculture establishments.
For those in the retail/service establishments employing not more than 10 workers, the increase will be P18 per day, while those working in the agriculture sector, will get an increase of P5-18 per day.
“The wage adjustments is in keeping with the policy of uplifting the standards of living of workers to the level of a set floor wage, a wage level that takes into account the region’s poverty threshold, average wages, and related socio-economic parameters,” said Baldoz.
The wage order also provides a productivity allowance of P12.50 per day for workers receiving more than the floor wage of P255 per day. Most of the workers who will receive this are working in non-agriculture establishments.
The P12.50 productivity allowance is a transitory productivity-based increase.
A worker may be entitled to higher productivity-based pay depending on the amount that will be determined by the Productivity Improvement and Incentives Committee (PIIC) to be created in every establishment within a three-month period from the effectivity of the wage order.
The advisory guidelines on productivity-based pay, while it is voluntary in nature, recommends a percentage range of productivity-based pay increase from 5.6 percent to 10.9 percent of the basic wage of the worker.
“The creation of a PIIC in every establishment is expected to set the mode for a more deliberate productivity initiatives, better performance of workers, and profitability and competitiveness of the enterprise,” Baldoz observed.
“The provision of productivity-based pay will make both the workers and the enterprise a winner,” she added, saying that the Productivity Incentives Act of 1990 allows establishments to avail of tax incentives under the law as a special deduction from the gross income equivalent to 50 percent of the total amount distributed as productivity based pay.
For workers, she said that under BIR Regulation No. 10-2008, other benefits, like productivity-based pay not exceeding P30,000 per annum are excluded from gross income hence, not subject to tax.
The new wage order does not allow exemption from compliance of its mandatory provisions.
The order covers all workers in the private sector, including workers of legitimate contractors or sub-contractors deployed in “user enterprises” regardless of the manner by which they are paid," said DOLE-Region IV-A regional director Alex V. Avila.
To pave for its smooth implementation, Avila said tripartite bodies like the RTWPB and the Tripartite Industry Councils will be ready to provide technical assistance to companies in the establishment and operation of PIICs at the enterprise level.
Finally, Secretary Baldoz said all the other regional wage boards should study the RTWPB-4A model of the two-tier wage system towards formulating their own two-tier wage systems using as basis the parameters set by the National Wages and Productivity Commission.
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