RECEIVED
oar L JUL 2013

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 125

Introduced by Emmeline Y. Aglipay

Explanatory Note

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imposed on employers for non-compliance with the applicable minimum wage rates.

seeks to protect private sector minimum wage earners by increasing the penalty

Preliminarily, the important role played by labor is underscored by its vinculum to the
fundamental law. Section 18, Article I! (Declaration of Principles and State Policies) of the
Constitution affirms labor as a primary social economic force and mandates the State to protect
the rights of workers and promote their welfare. Corollarily, Section 3, Article XIII (Social
Justice and Human Rights) directs the State to afford full protection to labor and guarantees that
workers shall be entitled to, among others, a “living wage,” in recognition of the right of labor to
its just share in the fruits of production. The term “living wage,” in turn, has been defined by the
National Wages and Productivity Commission as “the amount of family income needed to
provide for the family’s food and non-food expenditures with sufficient allowance for savings
and investments for social security, so as to enable the family to live and maintain a decent
standard of human existence beyond mere subsistence level, taking into account all of the

family’s psychological, social and other needs.”

Certainly, the minimum wage rates fixed by the different Regional Tripartite Wayes 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 reveal that one in every five
workers is not paid the applicable minimum wage. The compliance rates for the past three (3)

years may be summarized as follows


Establishments
Year Inspected Compliance Rate
2007 24,581 80.8%
2008 26,169 82.3%
2009 4,670 78.7

It should be emphasized, however, that these compliance rates were based solely on the
number of establishments inspected nationwide. For instance, only 26,169 establishments (out
of a total of 761,409, or 3.44%) were inspected in 2008. Admittedly, as the Department of Labor
and Employment is undermanned to conduct consistent monitoring and enforcement strategies,

the actual non-compliance rate may in fact be higher.

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.
‘The approval of this measure is earnestly requested.

Emmeline 4 wea

Representative
DIWA Party-list



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 125

Introduced by Emmeline Y. Aglipay

AN ACT
INCREASING THE PENALTIES FOR NON-COMPLIANCE WITH THE
GOVERNMENT PRESCRIBED MINIMUM WAGES, AMENDING FOR THE
PURPOSE SECTION. 12 OF REPUBLIC ACT NO. 6727, OTHERWISE KNOWN AS
‘THE WAGE RATIONALIZATION ACT, AS AMENDED BY REPUBLIC ACT NO. 8188,
AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Section 12 of Republic Act 6727, as amended, is hereby further amended

to be 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 OF AT LEAST [twenty-five thousand pesos (25,000.00) FIFTY
THOUSAND PESOS BUT NOT MORE THAN [ONE HUNDRED
THOUSAND PESOS] THREE HUNDRED THOUSAND PESOS, PLUS
MORAL DAMAGES OF AT LEAST FIFTY THOUSAND PESOS FOR
EACH AFFECTED WORKER AND THE COSTS OF LITIGATION
INCLUDING ATTORNEY'S FEES and/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 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 on

~ 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
DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) OR THE
NATIONAL LABOR RELATIONS COMMISSION (NLRC), WHERE
APPLICABLE, AGAINST PERSON/S WHO VIOLATED THE
PROVISIONS OF THIS ACT, AND SAID FINE CANNOT BE
TMMEDIATELY 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
IMMOVABLE PROPERTY, ESTIMATED TO BE CAPABLE OF FULLY
SATISFYING THE IMPOSED FINES SHALL BE THE SUBJECT OFA
SUMMARY FORFEITURE AND GARNISHMENT PROCEEDING TO
BE LITIGATED BY THE SAME BODY WHICH IMPOSED THE SAID
PENALTY.

SECTION 2. 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.

SECTION 3. Repealing Clause. - All laws, decrees, orders, rules and regulations, or
parts thereof inconsistent with this Act are hereby repealed or amended accordingly.

SECTION 4. Effectivity. - This Act shall take effect fifteen (15) days after is

publication in at least two (2) national newspapers of general circulation.

Approved