FOURTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
) 
FIRST REGULAR SESSION 
) 
S E N A T E  
1 
S.B. No. 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
This bill seeks to set the criteria for determining a living wage to ensure that the 
wages received by workers in the country are able to provide for their basic needs. 
Section 3 Article XI11 of the 1987 Philippine Constitution provides that the State 
shall guarantee the right of all workers to security of tenure, humane conditions of 
work and a living wage. 
The definition of living wage has been open to many interpretations. In a 2001 
National Wages and Productivity Commission study titled "Development of Methodology 
for Esfimating fhe Living Wage," living wage is defined as "the amount of family income 
needed to provide for the family's food and non-food expenditures with sufficient 
allowance for savings/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 physiological, social and other needs." The 
current family living wage assumes ;hat a family has six members on the average and 
that two family members are earning. On the other hand, according to the Employer's 
Confederation of the Philippines (ECOP), this definition is inaccurate because of the 
assumption that family income is sourced from two wage and salary earners, when 
statistically, there is less than one wage earner in the family. Also the study based 
family size on 6 members, when the average size is 5 based on the 2000 census. 
t 
Evidently, there is a need for a legislation that would clearly define what a living 
wage is. Considering it is one of the ten criteria that the Regional Tripartite Wages and 
Productivity Boards should consider in determining minimum wages under Republic 
Act No. 6727 otherwise known as the Wage Regionalization Act, there is need to arrive 
at a definition that will uphold the right of workers to earn a living that would enable 
them to provide for the basic needs of their family, while at the same time recognizing 
the need of employers to sustain their business or trade. 
' This proposed measure aims to accomplish that by enumerating the factors to 
consider in determining living wage, to wit: 
1. 
Balanced diet 
2. 
Decent clothing 
3. 
Hygiene and sanitation 
4. 
Health and Medicare 
5. 
Basic education 
6. 
Basic durables, i.e. radio, TV, electric fan 


7. 
Leisure and recreation 
8. 
Observance of vital personal and social events 
Under this bill, the living wage shall be determined by the Regional Tripartite 
Wage and Productivity Board in accordance with the provisions of Republic Act 6727. 
The living wage as specified in this proposed Act shall not be synonymous and is 
distinct with the meaning of minimum wage provided under labor laws, rules and 
regulations. 
Finally, this bill provides for a penalty in case any person, corporation, trust firm 
partnership, association or entity refuses or fails to pay any of the prescribed increase or 
adjustment in the living wage rates made in accordance with this Act. 
In view of the foregoing, immediate passage of this bill is earnestly requested. 
-+ 
Senator 


FOURTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
) 
FIRST REGULAR SESSION 
S E N A T E  
S.B. No. 
93 
Introduced by Senator Loren Legarda 
AN ACT 
DEFINING A LIVING WAGE FOR EMPLOYEES IN THE PUBLIC AND PRIVATE 
SECTORS, ESTABLISHING THE MECHANISM AND PROPER STANDARDS 
THEREFOR, 
APPROPRIATING FUNDS THEREFOR 
AND 
FOR 
OTHER 
PURPOSES 
Be it enacted by the Senate and the House of Representatives of tke Philippines in 
Congress assembled: 
SECTION 1. Title. - This Act shall be known as the "Living Wage Act of 2007" 
SECTION 2. Declaration of Policy - it is hereby declared the policy of, the State 
to ensure the constitutional rights of workers to a living wage and to their just share in 
the fruits of production in order to afford them and their families a decent standard of 
living, to enhance the country's global competitiveness through a strongly motivated 
and highly productive working force, and to strengthen the partnership between the 
government and the private sector in uplifting labor towards national developtnent. 
SECTION 3. Living Wage Coverage. - All workers and employees in the public 
and private sector, regardless of their position, designation or status and irrespectively 
of the method by which their wages are paid and all workers and employees in private 
agriculkral and non-agricultural sectors, shall receive, subject to the provisions of 
Section 4, a living wage equivalent to the cost of living for a family of six based on the 
following minimum standards of living: 
1. 
Balanced diet I 
2. 
Decent clothing 
3. 
Hygiene and sanitation 
4. 
Health and Medicare 
5. 
Basic education 
6. 
7. 
Leisure and recreation 
8. 
Basic durables, i.e. radio, TV, electric fan 
Observance of vital personal and social events 
The living wage shall be determined by the Regional Tripartite Wage and 
Productivity Board in accordance with the provisions of Republic Act 6727, ,Provided 


that the living wage as specified in this section shall not be synonymous and is distinct 
with the meaning of minimum wage provided under labor laws, rules and regulations. 
SECTION 4. Price Regulation and Tax Relief. - In case of failure to grant the full 
amount of the living wage, the State shall, without delay, carry out price regulation and 
discount measures, subsidy and tax reform including, but not limited to, exemption of 
workers receiving wage less than the cost of living from the payment of withholding tax 
and value added taxes and the employee’s counterpart of the Government Service 
Insurance System (GSIS)/Social Security System (SS), Phil health and PAG-IBIG 
contributions. The employers are likewise encouraged, through tax credits and such 
other incentives as may be provided by law, to provide employees with non wage 
benefits to cover the diffeience between the minimum wage and living wage levels. 
SECTION 5. Penalties. - Any person, corporation, trust firm partnership, 
association or entity which refuses or fails to pay, subject to the provision of Section 4, 
any of the prescribed increase or adjustment in the living wage rates made in 
accordance with this Act, shall be punished by a fine not less than twenty thousand 
(P20,OOO.OO) but not more than One Hundred Thousand Pesos (PlO0,OOO.OO) and/or 
imprisonment of not less than six (6) months but not more than one (1) year; provided, 
that any person convicted under this Act shall not be entitled to the benefits ‘provided 
for under the Probation Law. 
If the violation is committed by a corporation, trust, firm, pxtnership, 
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. If the offender is 
an alien, he shall, after service of sentence, be deported immediately without further 
proceeding in the Bureau of Immigration (BI).And shall be banned permanently from 
reentering the country. If the offender is a public officer or employee, the Court shall, in 
addition to the penalties hereinabove provided, order his dismissal from the 
government service. 
SECTION 6. Implementing RuIes and Regulations. - The Department of Labor 
and Employment in coordination with the representatives from organized employees 
and labor sectors shall promulgate the necessary rules and regulations to implement the 
provisions of this Act. 
SECTION 7. Separability Clause. - If any part, section or provision of this Act is 
declared invalid or unconstitutional, the other parts or provisions thereof nqt affected 
thereby shall remain in full force and effect. 
SECTION 8. Repealing Clause. - All laws, acts, presidential decrees, executive 
orders, administrative orders, rules or regulations inconsistent with or contrary to this 
Act are deemed amended, modified or repealed accordingly. 
SECTION 9. Nondiminution of Wages, Allowances and Benefits. - Nothing in 
this Act shall be construed to reduce any existing wages rates, allowances and benefits 


of any form under existing wage rates, allowances and benefits of any form under 
existing laws, decrees, executive orders, issuances, and/or under any contract or 
agreement between the workers and their employees. 
SECTION 10. Effectivity Clause - This Act shall take effect fifteen (15) days after 
completion of its publication in at least two (2) newspapers of general circulatim. 
Approved,