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DOLE XI: Employers have power to prevent wage distortion

A DEPARTMENT of Labor and Employment Region  (DOLE) XI official said employers bear the responsibility of adjusting the salaries of their workers to avoid distortion in light of the proposed P100 wage hike bill in the Senate.

During the Habi at Kape forum last April 24, DOLE XI regional director Randolf Pensoy said they would follow the wisdom of the Senate and Congress if the proposed bill becomes law.

“The secretary also [said that] if there [are] any changes coming from the Senate or the House of Representatives, we will abide with the law. DOLE will abide and implement it,” Pensoy said.

Pensoy also addressed the concern about possible wage distortion brought by the bill between minimum wage and above-minimum wage workers.

“[If there is] wage adjustment, the employer has this kind of system [or] prerogative [as to] how they would adjust the wage adjustment that would somehow affect any distortion as to rank, as to seniority and as to the kind of engagement the employer or employee [has],” he said.

Pensoy suggested the employer has to design ways to reward those who have been in the company longer such as additional benefits, promotions, or more vacation time so the wage adjustment will also benefit them and not just the minimum earners.

Wage distortion, according to Article 124 of the Labor Code, is a situation where an increase in prescribed wage rates results in the elimination or severe contraction of differences in wage between employee groups in an establishment which obliterates the distinctions in such wage structure based on skills, length of service, or other logical bases of differentiation.

Pensoy explained, “The wage distortion would speak that it would somehow abolish or diminish the point of comparison. Kung kinsa na to’y dugay ug karong bag-o, murag pareha [na], wa na sila’y distinction.”

It was stated under Senate Bill No. 2534 or the proposed P100 Daily Minimum Wage Increase Act of 2024 that in case of wage distortion, it is the employer and the union, or the employer and the workers, in the absence of a union, shall negotiate to correct the distortion.

In addition, the proposed law shall not prevent the Regional Tripartite Wages and Productivity Board from granting additional increases to the workers and employees based on the Wage Rationalization Act.

As reported last May 1, labor groups assembled during the Labor Day Rally called for a P150 increase in the daily minimum wage, demanding the Marcos administration urgently certify the pending wage hike bill rather than pushing for Charter Change.

The bill was approved on the third and final reading in the Senate last February and is currently pending in the House of Representatives.

“The changes of wage adjustment also affect those who have been receiving above the minimum wage,” Pensoy said.


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