Wednesday, 26 July 2017
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HB 5018 | Raise Penalties for Minimum Wage Violators

HOR COMPLEX, Quezon City (DWDD) – As the country celebrated Labor Day last Monday, the House of Representatives continues to discuss bills that would raise penalties for non-compliance with government prescribed minimum wages and other workers’ benefits when representatives resume session this week.

Rep. Pantaleon D Alvarez 1 Dist Davao Del Norte
Rep. Pantaleon D Alvarez 1 Dist Davao Del Norte
Rep. Randolph Ting 3rd Dist Cagayan
Rep. Randolph Ting 3rd Dist Cagayan

The committee on labor and employment chaired by Rep. Randolph Ting (3rd District, Cagayan) discussed House Bill 5018, authored by Speaker Pantaleon D. Alvarez, seeking to ensure the employees’ right to their wages, including wage-related benefits, and social security and welfare benefits, amending for the purpose Presidential Decree 442, as amended, otherwise known as the Labor Code of the Philippines.

The committee will also discuss House Bill 356, authored by Rep. Emmeline Aglipay-Villar (Party-list DIWA). Her bill seeks to raise the penalties for non-compliance with the government prescribed minimum wages, amending for the purpose Section 12 of Republic Act 6727, otherwise known as the Wage Rationalization Act, as amended.

PaymentThe Speaker said HB 5018 aims to curb the illegal practice of private sector employers of non-compliance with the proper and appropriate payment of minimum wage.

The Speaker said the current penalties are not strong enough to completely stop the unjust and unreasonable conditions suffered by labor workers.

“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. This bill seeks to increase the penalties so as to impose stricter guidelines for the employers. In doing so, this could serve as a deterrent to the non-compliance of payment of prescribed minimum wage rates by unjust employers,” said Alvarez.

When it comes to wages, the Speaker said 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. In the case of NCR for instance, the minimum wage is P481 per day, he said.

“Aside from wages, basic entitlements of employees also include, among others, the right to receive wage-related benefits through coverage under the Social Security System (SSS), Philippine Health Insurance Corp. (PhilHealth), and the Home Development Mutual Fund or PAG-IBIG Fund. These benefits are also essential to ensure the economic and social security of the workers,” said Alvarez.

Aglipay-Villar said 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.

“The minimum wage rates fixed by the different Regional Tripartite Wages and Productivity Boards (RTWPBs) are lower than the ideal living wage. Be that as it may, compliance by employers or establishments of the regional mandated minimum wages has remained a persistent problem. Data culled by the Department of Labor and Employment (DOLE) reveal that one in every five workers is not paid the applicable minimum wage,” said Aglipay-Villar.

Increasing the penalty for non-compliance with the prescribed daily minimum wage rates will thus serve as a deterrent to the commission of wage violations by unscrupulous employers, said Aglipay-Villar.

The Speaker’s HB 5018 seeks to amend PD 442 to include a new Article 97-A titled “Social Security and Welfare Benefits,” providing that “Upon employment, every new employee shall be covered by the SSS, PhilHealth, PAG-IBIG, and other social security and welfare benefits. Notwithstanding any provision of law to the contrary, all premium payments or contributions for such benefits of minimum of wage earners shall be shouldered by the employer.”

The bill also seeks to amend Article 102 of PD 442 titled “Forms of Payment” which provides that “No employer shall pay the wages and benefits of an employee by means of promissory notes, vouchers, coupons, tokens, tickets,chits, or any other object other than legal tender, even when expressly requested by the employee.

Moreover, the payment of the wages and wage-related benefits shall be made through automated teller machines (ATM) of banks.

The bill also includes a new Article 105-A titled “Non-Payment of Articles and Benefits; Penalties, which provides that “Non-payment of the wages of employees, including wage-related benefits, is hereby declared unlawful. Any person, corporation, trust, firm, partnership, association or entity that refuses to pay or fails to pay the wages of an employee for service rendered, or refuses or fails to pay any of the prescribed wages and adjustments in the wage rates made in accordance with prevailing laws shall be punished by a fine of not less than P200,000 nor more than P500,000 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. The payment of indemnity shall not absolve the employer from the criminal liability imposable under the Article.

If the violation is committed by a corporation, trust, firm, partnership, association or other entity, the penalty of imprisonment shall be imposed on the entity’s responsible officers, under the circumstances, which may include, but not limited to, the Human Resources Manager, Finance Manager, the Vice President, President, Chief Executive Officer, General Manager, Managing Director or Partner.

Any alien found guilty shall be summarily deported upon completion of sentence and or payment of the appropriate fine or fines.

Any person convicted under this Act shall not be entitled to the benefits provided for under PD 968, or the Probation Law of 1976.

Lastly, the bill seeks to amend Article 106 of PD 442 titled “Contractor or Sub-Contractor” so that “Whenever a principal employer enters into a contract with another person for the performance of the other’s work, the employees of the contractor and the latter’s sub-contractor, if any, shall be paid in accordance with the provisions of the Labor Code.”

In the event the contractor or sub-contractor fails to pay the wages and wage-related benefits of his employees in accordance with the Labor Code, the principal employer shall be held jointly and severally liable.

Meanwhile, Aglipay-Villar’s HB 356 seeks to amend Section 12 of Republic Act 6727, Otherwise Known As the “Wage Rationalization Act,” as amended by RA 8188.

The amendment provides that “Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates made in accordance with this Act shall be punished by a fine of at least P50,000 but not more than P300,000, plus moral damages or at least P50,000 for each affected worker and the costs of litigation, including attorney’ s fees, 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. Any person convicted under this Act shall not be entitled to the benefits provided for under the Probation Law.”

In cases where a fine is decreed by the DOLE or the National Labor Relations Commission (NLRC), where applicable, against persons who violated the provisions of this Act, and said fine cannot be immediately satisfied because of the unavailability or inadequacy of funds, the assets of the owner, president, or manager of the corporation or any other entity, or fraction thereof, either movable or movable property, estimated to be capable of fully satisfying the imposed fines shall be the subject of a summary forfeiture and garnishment proceeding to be litigated by the said body which imposed the said penalty. CONGRESS / MCAG

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