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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO S018

Introduced by Representative Pantaleon D. Alvarez

EXPLANATORY NOTE

This bill seeks to curb the illegal practice of private sector employers
of non-compliance with the proper and appropriate payment of minimum
wage to their workers.

Itis stated in the Constitution that the State is mandated to protect the
rights of laborers and promote their welfare. Among the primary
entitlements a worker should be afforded is his monthly income, which he
will be needing to provide for his day-to-day family and personal
expenditures,

When it comes to wages, the Regional Tripartite Wages and
Productivity Board (or the Regional Wage Boards) imposes the minimum
wage in their respective regions and employees in the Philippines must be
paid no less than the specified rates. In the case of NCR, for instance, the
minimum wage is P481 per day.

Aside from wages, basic entitlements of employees also include,
among others, the right to receive wage-related benefits through coverage
under the Philippine Social Security System, Philippine Health Insurance
Corp., and the Home Development Mutual Fund (also known as the PAG-
IBIG Fund). These wage-related benefits are also essential to ensure the
social and economic security of the workers.


Failure to pay the required minimum wage entails serious penalties.
However, the current penalties are not strong enough to completely stop
these unjust and unreasonable conditions suffered by labor workers.

Labor workers are “a company’s greatest asset,” according to
businesswoman Anne Mulcahy, and these assets should receive the right
wages and benefits they so rightfully deserve. This bill seeks to increase the
penalties so as to impose stricter guidelines for the employers. In doing so,
this could serve as a deterrent to the non-compliance of payment of
prescribed minimum wage rates by unjust employers.

The approval of this bill is earnestly sought.

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PANTALEON LVAREZ


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
First Regular Session

AN ACT
ENSURING THE EMPLOYEES’ RIGHT TO THEIR WAGES,
INCLUDING WAGE-RELATED BENEFITS, AND SOCIAL
SECURITY AND WELFARE BENEFITS, AMENDING FOR THE
PURPOSE PRESIDENTIAL DECREE NO. 442, AS AMENDED,
OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES

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

SECTION 1. A new article, denominated as Article 97-A, is
hereby inserted after Article 97 of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code of the Philippines, to read as
follows:

“ARTICLE 97-A. SOCIAL SECURITY AND WELFARE
BENEFITS - UPON EMPLOYMENT, EVERY EMPLOYEE
SHALL BE COVERED BY THE SOCIAL SECURITY SYSTEM
(SSS), THE PHILIPPINE HEALTH INSURANCE
CORPORATION (PHILHEALTH), THE HOME
DEVELOPMENT MUTUAL FUND (PAG-IBIG), AND OTHER
SOCIAL SECURITY AND WELFARE BENEFITS.


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as follow:

NOTWITHSTANDING ANY PROVISION OF LAW TO THE
CONTRARY, ALL PREMIUM PAYMENTS OR
CONTRIBUTIONS FOR SUCH BENEFITS OF MINIMUM
WAGE EARNERS SHALL BE SHOULDERED BY THE
EMPLOYER.”

SEC. 2. Article 102 of the Labor Code is hereby amended, to read

“Art. 102. Forms of payment.- No employer shall pay the
wages AND WAGE-RELATED BENEFITS of an employee by
means of promissory notes, vouchers, coupons, tokens, tickets,
chits, or any object other than legal tender, even when expressly
requested by the employee.

“THE PAYMENT OF THE WAGES AND WAGE-
RELATED BENEFITS OF AN EMPLOYEE SHALL BE MADE
THROUGH AUTOMATED TELLER MACHINES (ATM) OF
BANKS.”

SEC. 3. A new article, denominated as Article 105-A, is hereby

inserted after Article 105 of the Labor Code, to read as follows:

“ART. 105-A. NON-PAYMENT OF WAGES AND
BENEFITS; PENALTIES - NON-PAYMENT OF THE WAGES OF
EMPLOYEES, INCLUDING WAGE-RELATED BENEFITS, IS
HEREBY DECLARED UNLAWFUL.”

“ANY PERSON, CORPORATION, TRUST, FIRM,
PARTNERSHIP, ASSOCIATION OR ENTITY THAT REFUSES
OR FAILS TO PAY THE WAGES OF AN EMPLOYEE FOR
SERVICE RENDERED, OR REFUSES OR FAILS TO PAY ANY
OF THE PRESCRIBED INCREASES OR ADJUSTMENTS IN
THE WAGE RATES MADE IN ACCORDANCE WITH
PREVAILING LAWS SHALL BE PUNISHED BY A FINE OF

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NOT LESS THAN TWO HUNDRED THOUSAND PESOS
(P200,000.00) NOR MORE THAN FIVE HUNDRED
THOUSAND PESOS (P500,000.00) AND/OR IMPRISONMENT
OF NOT LESS THAN FOUR (4) YEARS NOR MORE THAN SIX
(6) YEARS OR BOTH SUCH FINE AND IMPRISONMENT AT
THE DISCRETION OF THE COURT.”

“THE EMPLOYER CONCERNED SHALL BE ORDERED
TO PAY AN AMOUNT EQUIVALENT TO DOUBLE THE
UNPAID WAGES OWING THE EMPLOYEE: PROVIDED,
THAT THE PAYMENT OF INDEMNITY SHALL NOT
ABSOLVE THE EMPLOYER FROM THE CRIMINAL
LIABILITY IMPOSABLE UNDER THIS ARTICLE.”

“IE THE VIOLATION IS COMMITTED BY A
CORPORATION, TRUST, FIRM, PARTNERSHIP,
ASSOCIATION, OR OTHER ENTITY, THE PENALTY OF
IMPRISONMENT SHALL BE IMPOSED ON THE ENTITY'S
RESPONSIBLE OFFICERS UNDER THE CIRCUMSTANCES,
WHICH MAY INCLUDE, BUT NOT LIMITED TO, THE
HUMAN RESOURCES MANAGER, FINANCE MANAGER,
THE PRESIDENT, VICE-PRESIDENT, CHIEF EXECUTIVE
OFFICER, GENERAL MANAGER, MANAGING DIRECTOR
OR PARTNER.”

“ANY ALIEN FOUND GUILTY SHALL BE SUMMARILY
DEPORTED UPON COMPLETION OF SERVICE OF
SENTENCE AND/OR PAYMENT OF THE APPROPRIATE
FINE.”

“ANY PERSON CONVICTED UNDER THIS ACT SHALL
NOT BE ENTITLED TO THE BENEFITS PROVIDED FOR
UNDER PRESIDENTIAL DECREE NO. 968, OTHERWISE
KNOWN AS THE PROBATION LAW OF 1976."


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SEC. 4. Article 106 of the Labor Code is hereby amended to read
as follows:

“Art. 106. Contractor or subcontractor.- Whenever a[n]
PRINCIPAL employer enters into a contract with another person
for the performance of the former's work, the employees of the
contractor and of the latter’s subcontractor, if any, shall be paid in
accordance with the provisions of this Code.

“In the event that the contractor or subcontractor fails to pay
the wages AND WAGE-RELATED BENEFITS, INCLUDING
THE PREMIUMS FOR SOCIAL SECURITY AND WELFARE
BENEFITS, of his employees in accordance with this Code, the
PRINCIPAL employer shall be jointly and severally liable with his
contractor or subcontractor to such employees to the extent of the
work performed under the contract, in the same manner and

extent that he is liable to employees directly employed by him.

“There is “labor-only" contracting where the person
supplying workers to an employer does not have substantial
capital or investment in the form of tools, equipment, machineries,
work premises, among others, and the workers recruited and
placed by such persons are performing activities which are
directly related to the principal business of such employer. In such
cases, the person or intermediary shall be considered merely as an
agent of the employer who shall be responsible to the workers in
the same manner and extent as if the latter were directly
employed by him.”

SEC. 5. Implementing Rules and Regulations. - The Secretary of
Labor and Employment shall promulgate the necessary implementing
rules and regulations within one hundred and twenty (120) days from
the effectivity of this Act, .


Secwmraneun

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SEC. 6. Separability Clause. - If any provision of this law or the
application thereof to any person or circumstance is held invalid, the
remainder of this law or the application of such provision or part to
other persons of circumstances shall not be affected thereby.

SEC. 7. Repealing Clause. - All laws, decrees, rules, and
regulations or parts thereof, which are contrary to or inconsistent with
this Act, are hereby repealed or modified accordingly.

SEC. 8. Effectivity. - This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in a newspaper of national
circulation.

Approved,