FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
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Introduced by Senator Benigno S. Aquino 111 
EXPLANATORY NOTE 
Under the declaration of principles and state policies (Article 11) of the 
1987 Constitution, it is affirmed that labor is a primary social economic 
force and it is mandated that the State shall protect the rights of workers 
and promote their welfare. 
This state policy is reiterated in a succeeding chapter (Article XIII) of 
the Constitution dealing with Social Justice and Human Rights provisions 
which mandates the State to afford full protection to labor and guarantees 
that workers shall be entitled not only to security of tenure and humane 
conditions of work but also a living wage and participation in policy and 
decision- making processes affecting their rights and benefits as may be 
provided by law. 
To stress, the Constitution requires the State to implement a living 
wage which is defined as one that ensures a “decent standard of human 
existence beyond mere subsistence level” in contrast to a minimum wage 
which is the basic pay or daily wage plus cost of living allowance received by 
a worker, not falling under the exemptions as provided under the Wage 
Rationalization Act. (undersco~ng 
supplied) 
Verily, the minimum wage fixed by law is lower than the ideal living 
wage. Still, compliance by corporations and other work establishments has 
remained a persistent problem and it is very disturbing, to say the very 
least. 
In 1995, non-compliance was estimated to be 53%. I t  dropped to 20% 
in 1999 but increased to almost 30% the following year. The succeeding 
years showed a continued resurgence of minimum wage violations which 
DOLE estimated to be 45%, but this data only represents the firms it 
inspected and found to have violated wage regulations. Admittedly, as it 
remains undermanned to conduct consistent monitoring and enforcement 
strategies, the estimates of noncompliance can go as high as 60%, reverting 
to the trends of the mid-l990s, despite a dearth of enforcement and 
compliance studies on this matter. 
With enhanced monitoring by the DOLE and the new teeth that this 
representation has proposed, it is expected that the mantle of protection we 
can stretch for our workers will be much more assured. 


It is in this light that the approval of this measure is earnestly 
requested. 
A 
BENIGN0 s”\.yz 
S. A UINO 111 


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: li .L \,'t", !:3iViV 
FOURTEENTH CONGRESS OF THE 
1 
First Regular Session 
1 
REPUBLIC OF THE PHILIPPINES 
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Introduced by Senator Benigno S. Aquino 111 
AN ACT INCREASING THE PENALTIES FOR NON-COMPLIANCE OF THE 
PRESCRIBED INCREASES AND ADJUSTMENTS IN THE WAGE RATES OF 
WORKERS, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 6727, 
OTHERWISE KNOWN AS THE "WAGE RATIONALIZATION ACT", AND FOR 
OTHER PURPOSES. 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
SECTION 1. Section 12 of Republic Act 6727, as further amended by 
Republic Act 8188, is hereby amended to read as follows: 
"Section 12. 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 [not less than Twenty-five thousand 
pesos (P25,OOO) nor more than One hundred thousand 
pesos (PlO0,OOO)l NOT LESS THAN ONE HUNDRED 
THOUSAND 
PESOS 
(PlOO,OOO.OO) 
PLUS 
MORAL 
DAMAGES NOT EXCEEDING THIRTY THOUSAND PESOS 
(P30,OOO.OO) FOR EACH AFFECTED WORKER AND THE 
COSTS OF LITIGATION INCLUDING ATTORNEY'S FEES 
or imprisonment of not less than two (2) years nor more 
than four (4) years, or both such fine and imprisonment 
at the discretion of the court: Provided, That any person 


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convicted under this Act shall not be entitled to 
the 
benefits provided for under the Probation Law. 
"The employer concerned shall be ordered to pay an 
amount equivalent to double the unpaid benefits owing to 
the employees: Provided, That payment of indemnity shall 
not absolve the employer from the criminal liability 
imposable under this Act. 
"If the violation is committed by a corporation, trust 
or firm, partnership, association or any other entity the 
penalty 
of imprisonment shall be imposed upon the 
entity's responsible officers, including, but not limited to, 
the president, vice-president, chief executive officer, 
general manager, managing director or partner." 
IN CASES WHERE A FINE IS DECREED BY THE 
NATIONAL LABOR RELATIONS COMMISSION (NLRC) 
AGAINST 
PERSON/S 
WHO 
VIOLATED 
THE 
PROVISIONS 
OF THIS 
ACT 
AND 
CANNOT 
BE 
IMMEDIATELY 
SATISFIED 
BECAUSE 
OF 
THE 
REFUSAL 
TO 
PAY, 
OR 
IN 
CASE 
OF 
THE 
UNAVAILABILITY OR INADEQUACY O F  FUNDS, THE 
BANK DEPOSITS, FINANCIAL INTERESTS AND OTHER 
PERSONAL PROPERTY NOT CAPABLE OF MANUAL 
DELIVERY IN THE POSSESSION OR CONTROL OF 
THIRD PARTIES OF THE OWNER IN CASE OF SOLE 
PROPREITORSHIP 
OR 
THE 
ASSETS 
OF 
THE 
CORPORATION, 
ASSOCIATIONS 
OR ANY 
OTHER 
ENTITY, SHALL BE AUTOMATICALLY GARNISHED. IF 


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SUCH PROPERTIES ARE NOT ENOUGH, MOVABLE 
AND IMMOVABLE PROPERTIES MAYBE LEVIED TO 
SATISFY FULLY THE IMPOSED FINES. 
SEC. 2. The penalties provided under this Act shall also be applicable 
in cases involving workers hired by contractors undertaking infrastructure 
projects under R.A. 6685 and in relation to DOLE Order No. 19, with 
respect to any violation in the payment of wages or its appropriate wage 
increases. 
SEC. 3. Separability Clause.- 
If any provision of this Act shall be 
declared unconstitutional, any other provision not affected thereby shall 
remain in full force and effect. 
SEC. 4. Repealing Clause. - All laws, decrees, orders, rules and 
regulations, or parts thereof inconsistent with this Act ate hereby repealed 
or amended accordingly. 
SEC. 5. Effectivity. This Act shall take effect fifteen (15) days after its 
publication in at least two (2) national newspapers of general circulation. 
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Approved,