Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

TWENTIETH (20") CONGRESS
First Regular Session

HOUSE BILL NO. __ 94

Introduced by KAMANGGAGAWA Partylist
Representative ELIJAH R. SAN FERNANDO

EXPLANATORY NOTE

The right of every worker to receive a just and living wage is enshrined in the 1987
Philippine Constitution. Article XIII, Section 3 mandates the State to “afford full
protection to labor” and to “guarantee the rights of all workers to...a living wage.”
However, the current wage-setting framework, as outlined in Presidential Decree No.
442, as amended, also known as the Labor Code of the Philippines, has led to the
institutionalization of wage inequality.

Currently, the country maintains a fragmented regional wage system, administered by
the Regional Tripartite Wages and Productivity Boards (RTWPBs), under Republic Act
No. 6727. This system authorizes the RTWPBs to set minimum wage levels based on
regional economic conditions. While well-intentioned, this approach has led to legalized
wage disparities where workers performing the same tasks receive different

compensation solely based on geographic location.

For example, a minimum-wage earner in Metro Manila is entitled to P645 per day, while
their counterpart in Bicol may only receive P435 for identical work and working hours.
These discrepancies are not a result of differences in labor productivity. Instead, it stems
from a governance structure that fragments wage floors and undermines the principle of
wage justice.

One of the central objectives of this proposed legislation is the abolition of provincial
wage rates as a basis for determining minimum wages. The continued existence of
location-based wage differentiation perpetuates systemic inequity among workers and
reinforces regional economic disparities. By eliminating provincial wage tiers, this
measure promotes the constitutional principle of equal protection and affirms that every
Filipino worker, regardless of geographic location, deserves equal pay for equal work.

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This bill seeks to amend the Labor Code to establish a National Minimum Wage System
based on the principle of “Equal Pay for Equal Work.” The proposed reform has three
major pillars, to wit:

1. Adoption of a Statutory National Minimum Wage: A single, nationwide
minimum wage shall be determined through tripartite consultations and
socioeconomic assessments, to serve as the statutory wage floor for all workers
across the country.

2. Convergence and Transition Mechanism: A structured five-year convergence
period will allow regional wages to gradually align with the National Minimum
Wage through annual increments. By the sixth year, all regional disparities in
legislated minimum wages will be eliminated.

3. Abolition of Regional Wage Boards: Upon full implementation of the national
wage system, the RTWPBs shall be abolished. Their regulatory and policy
functions will be transferred to the National Wages and Productivity Commission
(NWPC), which will be strengthened to perform nationwide enforcement and
policy oversight.

This amendment modernizes the Philippines’ wage policy in line with constitutional
mandates and international labor standards. It fosters equity, administrative efficiency,
and labor mobility while preserving market-based wage flexibility above the national
floor.

In solidarity with the working class, the passage of this bill is earnestly sought.

ELIA AN FERNANDO
Represbasttive
KAMANGGAGAWA Pagrvust

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH (20) CONGRESS
rst Regular Session

House BILLNo,_94

Introduced by KAMANGGAGAWA Partylist
Representative ELIJAH R. SAN FERNANDO

AN ACT
INSTITUTING A NATIONAL MINIMUM WAGE SYSTEM, AMENDING FOR THE
PURPOSE PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS THE
“LABOR CODE OF THE PHILIPPINES,” AS AMENDED

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

SECTION 1. Short Title. - This Act shall be known as the “National Minimum Wage
Act.”.

SEC. 2. Declaration of Policy. ~ It is the policy of the State to uphold the principle of
equal pay for equal work, regardless of geographic location. The State shall ensure that
minimum wage standards are equitable, transparent, and based on national
socioeconomic indicators.

The State affirms labor as a primary socioeconomic force. In keeping with the State's
obligation to protect the rights of workers and promote their welfare,
government-imposed wage disparities based solely on regional location shall be
eliminated through the establishment of a National Minimum Wage applicable to all
workers nationwide.

SEC. 3. Definition of Terms. - For the purpose of this Act, the following terms shall
mean:

(a) Enterprise refers to any organized business activity—whether a_ single
proprietorship, cooperative, partnership, or corporation—engaged in industry,
agribusiness, or services. Under Republic Act No. 9501 (Magna Carta for MSMEs,
as amended), enterprises are classified based on total assets (excluding land
where business premises are situated) into:

1. Micro: up to P3million
2. Small: 3,000,001 — P15 million
3. Medium: P15,000,001 — P100million

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(b) Equal pay for equal work refers to the principle that all workers performing the
same tasks, with equivalent responsibilities, skills, and working conditions, must
receive the same minimum compensation, regardless of geographic location.

(0) Industry refers to a classification of enterprises engaged in similar economic
activities, such as the production of goods, extraction of natural resources, or
provision of services. These classifications are systematically further defined and
organized under the Philippine Standard Industrial Classification (PSIC).

SEC. 4, Amendment of Article 99 of the Labor Code. — Article 99 of the Labor Code, as
amended, is hereby further amended to read as follows:

“ART. 99 [Regional Minimum Wages] NATIONAL MINIMUM WAGE. -
The minimum wage rates for agricultural and non-agricultural employees and
workers in [each and every region] ALL REGIONS of the country shall be those
prescribed by the [Regional] NATIONAL Wages and Productivity [Boards]
COMMISSION (NWPC), IN COORDINATION WITH THE DEPARTMENT OF
LABOR AND EMPLOYMENT (DOLE) WHICH SHALL DETERMINE THE
INITIAL NATIONAL MINIMUM WAGE THROUGH A_ TRIPARTITE
CONSULTATION AND ECONOMIC ASSESSMENT. THE NATIONAL
MINIMUM WAGE SHALL BE FULLY IMPLEMENTED NOT LATER THAN
THE FIFTH YEAR FROM THE EFFECTIVITY OF THIS ACT.

ONE (1) YEAR AFTER THE EFFECTIVITY OF THIS ACT, THE NWPC
SHALL BEGIN IMPLEMENTING A CONVERGENCE PROCESS TO
GRADUALLY ALIGN ALL CURRENT REGIONAL MINIMUM WAGES WITH
THE NATIONAL MINIMUM WAGE.

IN EVERY YEAR OF THE TRANSITION PERIOD, EVERY REGION
SHALL INCREASE ITS MINIMUM WAGE BY NOT LESS THAN TWENTY
PERCENT (20%) OF THE GAP BETWEEN ITS CURRENT REGIONAL
MINIMUM WAGE AND THE NATIONAL MINIMUM WAGE.

AFTER THE TRANSITION PERIOD, VARIATIONS IN ACTUAL WAGES
ACROSS REGIONS, INDUSTRIES, OR ENTERPRISES MAY STILL OCCUR:
PROVIDED, THAT SUCH DIFFERENCES SHALL ARISE SOLELY FROM
LEGITIMATE ECONOMIC FORCES OR VOLUNTARY
EMPLOYER-EMPLOYEE AGREEMENTS, INCLUDING FACTORS SUCH AS
DIFFERENCES IN LOCAL LABOR MARKET SUPPLY AND DEMAND,
ENTERPRISE PROFITABILITY, SECTORAL PRODUCTIVITY, AND
COLLECTIVE BARGAINING OUTCOMES. UNDER NO CIRCUMSTANCES
SHALL GOVERNMENT AUTHORITIES ISSUE NEW WAGE ORDERS OR
ADMINISTRATIVE MANDATES THAT WOULD ESTABLISH OR
REINTRODUCE REGION-SPECIFIC WAGE FLOORS BELOW THE NATIONAL
MINIMUM WAGE BEYOND THE TRANSITION PERIOD.

WHERE WAGE VARIATIONS EMERGE AS A RESULT OF ECONOMIC
FORCES, THE NATIONAL WAGES AND PRODUCTIVITY COMMISSION
(NWPC) SHALL ISSUE REGION- OR SECTOR-SPECIFIC ADVISORY

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GUIDELINES THAT SHALL PROMOTE WAGE EQUITY AND LABOR
MARKET STABILITY THAT MAY INCLUDE:

(A)RECOMMENDED WAGE RANGES BASED ON PREVAILING
MARKET CONDITIONS;

(B) SECTOR-SPECIFIC PRODUCTIVITY-BASED PAY SCHEMES; AND

(C)MECHANISMS RECOGNIZING AND SUPPORTING COLLECTIVE
BARGAINING AGREEMENTS THAT GO BEYOND THE NATIONAL
FLOOR.

THE COMMISSION SHALL ALSO MONITOR THESE VARIATIONS TO
ENSURE THAT THEY DO NOT LEAD TO NEW FORMS OF WAGE
DISCRIMINATION OR EXPLOITATION, AND SHALL RECOMMEND
CORRECTIVE POLICY MEASURES AS NECESSARY.

SEC. 5. Powers and Functions of the Commission. — Article 121 of the Labor Code, as
amended, is hereby further amended and renumbered thereafter to read as follows:

“ART. 121. Powers and Functions of the Commission. - The Commission
shall have the following powers and functions:

(a) To act as the national consultative and advisory body to the President of the
Philippines and Congress on matters relating to wages, incomes, and
productivity;

() To formulate policies and guidelines on wages, incomes, and productivity
improvement at the enterprise, industry, and national levels;

() To prescribe rules and guidelines for the determination of appropriate
minimum wage and productivity measures at the [regional, provincial]
NATIONAL [or] industry, AND ENTERPRISE levels;

(a) [To review regional wage levels set by the Regional Tripartite Wages and
Productivity Boards to determine if these are in accordance with the
prescribed guidelines and national development plans] TO DETERMINE
AND FIX NATIONAL MINIMUM WAGE RATES EVERY THREE (3) YEARS
ACCORDING TO INDUSTRY AND ENTERPRISES AND TO ISSUE
CORRESPONDING WAGE ORDERS;

(E) TO ISSUE TEMPORARY WAGE ADJUSTMENT ORDERS APPLICABLE TO
SPECIFIC SECTORS OR GEOGRAPHIC AREAS IN RESPONSE TO MAJOR
ECONOMIC DISPLACEMENT EVENTS, INCLUDING, BUT NOT LIMITED
TO, WIDESPREAD RETRENCHMENTS, DISASTERS, SIGNIFICANT
INCREASES IN COMMODITY OR FUEL PRICES RESULTING FROM
INFLATION; OR ANY COMPARABLE CIRCUMSTANCE THAT
MATERIALLY IMPAIRS THE ABILITY OF AFFECTED EMPLOYERS TO
COMPLY WITH THE PRESCRIBED NATIONAL BASIC WAGE.

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ANY TEMPORARY WAGE ADJUSTMENT ORDER SHALL REMAIN IN
EFFECT FOR A PERIOD NOT EXCEEDING SIX (6) MONTHS, UNLESS
RENEWED UPON PROPER JUSTIFICATION BASED ON CONTINUING
ADVERSE CONDITIONS;

[le] (#) To undertake studies, research, and surveys necessary for the attainment of
its functions and objectives, and to collect and compile data and periodically
disseminate information on wages and productivity and other related
information, including but not limited to, employment, cost-of-living, labor
costs, INDUSTRY AND ENTERPRISE-LEVEL PRODUCTIVITY, investments,
and returns;

(if) To review plans and programs of the Regional Tripartite Wages and
Productivity Boards to determine whether these are consistent with national
development plans']

ffg) To exercise technical and administrative supervision over the Regional
Tripartite Wages and Productivity Board;]

[h)|(G) [To call, from time to time,] TO CONVENE a national tripartite conference
of representatives of government, workers, and employers for the
consideration of measures to promote higher wages and improved standards
of living. The national tripartite conference on wages shalll be convened on an
annual basis, or as the situation demands it;

[ig] {To exercise technical and administrative supervision over the Regional
Tripartite Wages and Productivity Boards;

[a] (ED To exercise such powers and functions as may be necessary to implement
this Act.

‘The Commission shall be composed of the Secretary of Labor and
Employment as ex-officio chairman, the Director-General of the National
Economic and Development Authority (NEDA) as ex-officio vice-chairman, and
two (2) members each from workers and employers sectors who shall be
appointed by the President upon recommendation of the Secretary of Labor and
Employment to be made on the basis of the list of nominees submitted by the
workers and employers sectors, respectively, and who shall serve for a term of
five (5) years. The Executive Director of the Commission shalll also be a member of
the Commission.

The Commission shall be assisted by a Secretariat to be headed by an
Executive Director and two (2) Deputy Directors, who shall be appointed by the
President of the Philippines, upon the recommendation of the Secretary of Labor
and Employment.

‘The Executive Director shall have the same rank, salary, benefits, and other
emoluments as that of a Department Assistant Secretary, while the Deputy

Page 60F


Directors shall have the same rank, salary, benefits, and other emoluments as that
of a Bureau Director. The members of the Commission representing labor and
management shall have the same rank, emoluments, allowances, and other
benefits as those prescribed by law for labor and management representatives in
the Employees’ Compensation Commission.

SEC. 6. Abolition of the Regional Tripartite Wages and Productivity Board. - Article 122 of the
Labor Code, as amended, is hereby repealed.

On the fifth (Sth) year and upon full implementation of the National Minimum
Wage, all Regional Tripartite Wages and Productivity Boards (RTWPBS), created under
Republic Act No. 6727, shall be abolished,

The National Wages and Productivity Commission (NWPC) shall thereafter take
over the responsibilities and shall be reorganized and strengthened to oversee national
wage policy enforcement and perform the functions stipulated under Section 4 of this
Act.

Employees of the RTWPBs shall either be absorbed into other government
offices, reassigned to appropriate positions, or granted separation benefits in accordance
with existing civil service regulations and budgetary guidelines.

SEC. 7. Wage Order. - Article 123 of the Labor Code is hereby amended and renumbered
to read as follows:

“ART. [123] 122. - Whenever conditions in the region] COUNTRY so
warrant, the [Regional Board} COMMISSION shall investigate and study all
pertinent facts; and based on the standards and criteria herein prescribed, shall
proceed to determine whether a Wage Order should be issued. Any such Wage
Order shall take effect after fifteen (15) days from its complete publication in at
least fone (1) newspaper of general circulation in the region. TWO (2)
NEWSPAPERS OF GENERAL CIRCULATION.

In the performance of its wage-determining functions, the [Regional
Board] COMMISSION shall conduct public hearings/consultations, giving
notices to employees’ and employers’ groups, provincial, city, municipal officials,
and other interested parties.

Any party aggrieved by the Wage Order issued by the [Regional Board]
COMMISSION may [appeal] SEEK A RECONSIDERATION OF such order [to
the Commission] within ten (10) calendar days from the publication of such
order. It shall be mandatory for the Commission to decide such [appeal]
MOTION FOR RECONSIDERATION within sixty (60) calendar days from the
filing thereof.

The filing of the appeal] MOTION FOR RECONSIDERATION does not
stay the order unless the person appealing such order shall file with the
Commission an undertaking with a surety or sureties satisfactory to the

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Commission for the payment to the employees affected by the order of the
corresponding increase, in the event the order is affirmed.”

SEC. 8. Standards/Criteria for Minimum Wage Fixing. ~ Article 124 of the Labor Code is
hereby amended and renumbered to read as follows:

“ART. [124] 123. Standards/Criteria for Minimum Wage Fixing. - The
[regional] NATIONAL minimum wagels] to be established by the [Regional
Board] COMMISSION shall be as nearly adequate as is economically feasible to
maintain the minimum standards of living necessary for the health, efficiency
and general well-being of the employees within the framework of the national
economic and social development program. In the determination of such
[regional] minimum wage, the [Regional Board] COMMISSION shall, among
other relevant factors, consider the following:

[la) The demand for living wages;
(b) Wage adjustment vis-a-vis the consumer price index;
(0) The cost of living and changes or increases therein;
(d) The needs of workers and their families;
(c) The need to induce industries to invest in the countryside;
(f) Improvements in standards of living;
(g) The prevailing wage levels;
(h) Fair return of the capital invested and capacity to pay of employers;
(i) Effects on employment generation and family income; and
() The equitable distribution of income and wealth along the imperatives
of economic and social development. J

(A) THE WORKERS’ RIGHT TO A LIVING WAGE;

(B) WAGE ADJUSTMENT VIS-A-VIS THE CONSUMER PRICE INDEX;

(©) THE COST OF LIVING AND CHANGES OR INCREASES THER!

(D) THE NEEDS OF WORKERS AND THEIR FAMILIE!

(E) IMPROVEMENTS IN STANDARDS OF LIVIN'

(F) FAIR RETURN OF THE CAPITAL INVESTED AND CAPACITY TO
PAY OF EMPLOYERS; AND

(G)THE EQUITABLE DISTRIBUTION OF INCOME AND WEALTH
ALONG THE IMPERATIVES OF ECONOMIC AND SOCIAL
DEVELOPMENT.

‘The wagels] prescribed in accordance with the provisions of this Title
shall be the standard prevailing NATIONAL minimum [wages in every region]
WAGE. [These wages] THIS shall include wages varying within industries,
Iprovinces or localities] if in the judgment of the [Regional Board]
COMMISSION, conditions make such [local] differentiation proper and
necessary to effectuate the purpose of this Title.

Any person, company, corporation, partnership or any other entity

engaged in business shall file and register annually with the [appropriate
Regional Board] COMMISSION and the [National Statistics Office] PHILIPPINE

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STATISTICS AUTHORITY an itemized listing of their labor component,
specifying the names of their workers and employees below the managerial level,
including learners, apprentices and disabled/handicapped workers who were
hired under the terms prescribed in the employment contracts, and their
corresponding salaries and wages.

Where the application of any prescribed wage increase pursuant to law or
Wage Order issued by [any] THE [Regional Board] COMMISSION results in
distortions of the wage structure within an establishment, the employer and the
union shall negotiate to correct the distortions. Any dispute arising from wage
distortions shall be resolved through the grievance procedure under their
collective bargaining agreement and, if it remains unresolved, through voluntary
arbitration. Unless otherwise agreed by the parties in writing, such dispute shall
be decided by the voluntary arbitrator or panel of voluntary arbitrators within
ten (10) calendar days from the time said dispute was referred to voluntary
arbitration.

In cases where there are no collective agreements or recognized labor
unions, the employers and workers shall endeavor to correct such distortions.
Any dispute arising therefrom shall be settled through the National Conciliation
and Mediation Board and, if it remains unresolved after ten (10) calendar days of
conciliation, shall be referred to the appropriate branch of the National Labor
Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct
continuous hearings and decide the dispute within twenty (20) calendar days
from the time said dispute is submitted for compulsory arbitration.

The pendency of a dispute arising from a wage distortion shall not in any
way delay the applicability of any increase in prescribed wage rates pursuant to
the provisions of law or Wage Order.

As used herein, a wage distortion shall mean a situation where an increase
in prescribed wage rates results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rates between and among
employee groups in an establishment as to effectively obliterate the distinctions
embodied in such wage structure based on skills, length of service, or other
logical bases of differentiation.

All workers paid by result, including those who are paid by piecework,
takay, pakyaw or task basis, shall. receive not less than the prescribed wage rates
per eight (8) hours’ work a day, or a proportion thereof for working less than
eight (8) hours.

All recognized learnership and apprenticeship agreements shall be
considered automatically modified insofar as their wage clauses are concerned to

reflect the prescribed wage rates.

SEC. 9. ~ Article 127 is hereby amended and renumbered to read as follows:

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“ART. [127] 126. Non-diminution of Benefits. - No Wage Order issued by
[any Regional Board] THE COMMISSION shall provide for wage rates lower
than the statutory minimum wage rates prescribed by Congress.”

SEC. 10. Exemptions. - Exempted from the provisions of this Act are businesses
belonging to the micro category based on the criteria provided by the Department of
Trade and Industry (DTI): Provided, That the enterprise is registered and has an updated
Barangay Micro Business Enterprise (BMBE) Certification pursuant to Republic Act No.
9178.

Daily basic wage increases enforced within three (3) months before the effectivity
of this Act, which have been explicitly stated and agreed upon in collective bargaining
agreements (CBAs), and excluding wage adjustments due to anniversaries, merit-based
increases, or those resulting from employee regularization or promotion, shall be
counted as compliance with the wage increases mandated by this Act: Provided, That the
employer shall pay the employees of the difference in wage increases that is less than
what is mandated under this Act.

Disputes resulting from wage distortions—defined as significant changes in
wage relationships within the same establishment—upon the implementation of the
mandated wage increase under this Act shall first be resolved voluntarily between the
employer and employees, and, when settlement cannot be reached, thereafter be
referred to the appropriate regional branch of the National Labor Relations Commission
(NLRC) that has jurisdiction over the workplace for compulsory arbitration. The NLRC
shall conduct continuous hearings and issue a decision on any such dispute within
twenty (20) calendar days from its filing.

The existence of a wage distortion dispute shall not delay the implementation of
the wage increases prescribed under this Act.

SEC. 11. Monitoring. - The Department of Labor and Employment (DOLE) shall, as far
as practicable, conduct inspections of company payrolls and other financial records to
verify compliance with the prescribed minimum wage rates and other legally mandated
benefits, including those under any Wage Order: Provided, That, when conducting
inspections in companies with existing union/s, the DOLE inspectors shall be
accompanied by the president, or any responsible officer of the recognized bargaining
unit, or by a representative of any concerned labor union; Provided, further, That,
inspections in companies without union/s shall be conducted in the presence of a
worker representative chosen from within the workforce. The worker representative has
the right to submit their own findings to DOLE and, should the findings not agree with
the labor inspector's report, may provide testimony to support their position.

SEC. 12, Penalties. - Any individual, corporation, trust, firm, partnership, association, or
other entity that refuses or fails to pay the mandated wage increases or adjustments
under this Act shall be subjected to a fine that is equivalent to double the unpaid wages
‘owed to the affected workers, but not less than One hundred fifty thousand pesos
(P150,000.00), or face imprisonment of not less than one (1) year but not more than two
(2) years, or both.

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Any person or persons convicted under this Act shall not be eligible for
probation under the Probation Law.

If the violation is committed by a corporation, trust, firm, partnership,
association, or other similar entity, the penalty of imprisonment shall be imposed on the
responsible officers of the organization, including, but not limited to, the president, vice
president, chief executive officer, general manager, managing director, or partner.

SEC. 13. Implementing Rules and Regulations. — Within sixty (60) days upon the effectivity
of this Act, the Department of Labor and Employment (DOLE), in coordination with
National Wages and Productivity Commission (NWPC), shall promulgate the necessary
rules and regulations to implement the provisions of this Act

SEC. 14. Repealing Clause. - Republic Act No. 6727, otherwise known as the “Wage
Rationalization Act,” is hereby expressly repealed. All other laws, presidential decrees,
executive orders, rules and regulations, or parts thereof that are inconsistent with the
provisions of this Act are hereby repealed, amended, or modified accordingly.

SEC. 15. Separability Clause. — If any provision or part hereof is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected shall
remain valid and subsisting

SEC. 16. Effectivity. — This Act shalll take effect sixty (60) days after its publication in the

Official Gazette or at least two (2) newspapers of general circulation.

Approved,

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