Symposium on
Wage Order No. NCR-19
Employers Confederation of the Philippines
Chardonnay by Astoria, Pasig City
14 April 2015
Regional Tripartite Wages and Productivity Board - NCR
Presentation Outline
1. WO No. NCR-19: The Process
2. WO NCR-19 and its Impact
3. Salient Provisions
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Regional Tripartite Wages and Productivity Board – National Capital Region
Approved: March 6, 2015
Published : March 20, 2015
Phil. Star
Effectivity: April 4, 2015
Implementing Rules:
Approved by the Board:
April 8, 2015
Transmitted to NWPC: 4/8
Approved by SOLE: _____
Published: __________
Timelines
Wage Petitions:
 Nov. 28, 2014: Association of Minimum Wage
Earners and Advocates (AMWEA)-PTGWO
P146.80/day
 March 6, 2015: TUCP (during the Public
Hearing)
P136 daily across-the-board increase
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Regional Tripartite Wages and Productivity Board – National Capital Region
CONSULTATIONS
 Labor Sector : January 29, 2015 (PTTC)
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Regional Tripartite Wages and Productivity Board – National Capital Region
CONSULTATIONS
 Employer Sector : February, 10, 2015 (PTTC)
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Regional Tripartite Wages and Productivity Board – National Capital Region
CONSULTATIONS
 Government Sector: February, 17, 2015 (Malate, Manila)
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Regional Tripartite Wages and Productivity Board – National Capital Region
PUBLIC HEARING
 March 6, 2015 (PTTC)
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Regional Tripartite Wages and Productivity Board – National Capital Region
DELIBERATION
 March 16, 2015
Secretariat
The Board Members
Government
Sector
Management Sector
Labor Sector
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Regional Tripartite Wages and Productivity Board – National Capital Region
LABOR SECTOR VIEW
Assn. of Minimum Wage Earners and
Advocates (AMWEA-PTGWO)
MW = Living Wage
P136 across-the-board increase
NCR Living Wage = P1,200 (as of 2014)
Current MW
Required Increase
TUCP
= P 466
= 734
Increase to be given in 5 equal yearly
tranches of P146.80
Constitutional Mandate
• CPI/IR; MRT fare hike
• ASEAN integration
• Benefits of economic
growth must be shared
with workers
EMPLOYERS’ SECTOR VIEW
AMWEA-PTGWO Petition
•No legal basis for fixing the living wage rate and equating it with
MW
•The P734.00 increase payable in equal tranches over a period of
5 years has no basis; does not conform to standards and criteria
for wage fixing
•The stated living wage will not remain constant. It will increase
exponentially due to price spiral even with the first P146.80
tranch.
TUCP Petition
•An across-the board increase does not fall within the jurisdiction
of the Board
•The computation of TUCP petition of P136/day is completely
flawed as it is based on erroneous and bloated indicators (e.g.
figures for inflation rate)
EMPLOYERS’ SECTOR VIEW
•Wage increase will result to more problems for the
economy (PCA)
•Legislated wage increases are counterproductive(BAP)
•Wage increases should be dictated by market forces
(FFCCCII)
•The wage petitions did not consider the economic
impact of a wage increase- PhilExport
•Wage increases should be left to collective bargaining
(Phimco Industries)
•Phil. Plastics Industry Assn. / PALSCON/ support the
position of ECOP
GOVERNMENT SECTOR VIEW
• With the ASEAN Integration, the clamor for
higher wages is no longer tenable
• If the Supreme Court declares that the MRT
fare hike is illegal, the clamor for higher
wages also is not tenable.
• Fares have been lowered in NCR, Regions 3
and 4 from P7.50 to P8.50; there is pending
petition for reduction of fares for buses and
taxis. (LTFRB)
• There should be an analysis of the effect of
wage increases given by the Boards.
RTWPB Mandate
Based on NWPC Guidelines, implement a Two-Tiered
Wage System
1st Tier Mandatory Wage Order setting
the Minimum Wage
2nd Tier Voluntary Wage Advisory
encouraging workers and employers to
implement in their establishments a
Productivity Improvement and
Gainsharing
Program
Minimum Wage Setting: A Difficult Balancing Act
Needs of workers and
their families
Socioeconomic
Capacity to Pay
requirements
RTWPBs
Minimum Wage
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Regional Tripartite Wages and Productivity Board – National Capital Region
Minimum Wage Setting: A Difficult Balancing Act
Needs of Workers
Capacity to pay
Socio-economic requirements
Minimum Wage
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Regional Tripartite Wages and Productivity Board – National Capital Region
CPI: October 2013 - March 2015
2013
2014
2015
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Regional Tripartite Wages and Productivity Board – National Capital Region
Restoration of Purchasing Power of NCR MW
a. Deterioration of P446 from October 2013 to February 2015
P466
x
132.0
126.8
-
P466
=
(P19.11)
b. Deterioration of P446 from October 2013 to March 2015
P466
x
131.6
126.8
-
P466
=
(P16.97)
c. Possible Deterioration of P446 from October 2013 to April 2015
P466
x
131.0
126.8
-
P466
=
(P13.98)
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Regional Tripartite Wages and Productivity Board – National Capital Region
Other Considerations
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Regional Tripartite Wages and Productivity Board – National Capital Region
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Regional Tripartite Wages and Productivity Board – National Capital Region
WO# NCR-19
P15/day Basic Wage Increase
effective
April 4, 2015
Basic Wage
Basic Wage
Increase
New
Basic
Wage
COLA
New
Minimum
Wage Rates
Non-Agriculture
P451.00
P15.00
P466.00
P15.00
P481.00
Agriculture (Plantation /Non-
P414.00
P15.00
P429.00
P15.00
P444.00
Plantation
Private Hospitals w/ Bed
Capacity of 100 or less
Retail/Service Establishments
employing 15 workers or less
Manufacturing Establishments
regularly employing less than 10
workers
Regional Tripartite Wages and Productivity Board – National Capital Region
Employer Cost/month
WO No. NCR-18
WO No. NCR-19
P 451.00 BW
15.00 COLA
P466.00/day
Monthly Wage
P466.00 BW
15.00 COLA
P481.00/day
P12,038.33
P12,425.83
SSS + EC
894.00
930.00
PhilHealth
150.00
150.00
Pag-IBIG
240.77
248.52
P13,323.10
P13,755.15
(+3.2.0%)
Regional Tripartite Wages and Productivity Board – National Capital Region
13th Month Pay
(Affected by date of BW Increase)
Jan to March (3 mos.)
: P451 BW
April to December (9 mos.) : P466 BW
13th month Pay = 3 x P451 x 310 + 9 x P466 x 310
12
12
12
12
= 3 x P11,550.53 + 9 x P12,038.33
12
12
= P11,941.46
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Regional Tripartite Wages and Productivity Board – National Capital Region
Worker’s Take Home Pay/month
WO No. NCR-18
WO No. NCR-19
P451.00 BW
15.00 COLA
P466.00/day
Monthly Wage
P466.00 BW
15.00 COLA
P481.00/day
P12,038.32
P12,425.83
SSS
436.00
454.00
PhilHealth
150.00
150.00
Pag-IBIG
240.77
245.52
P11,211.56
P11,573.31
(+3.2%)
a. OT Pay/hr
P451 X 1.25= P70.07
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466
8
X1.25= P72.82
(+3.3%)
b. NDP/hr
P451 X 1.10= P62.01
8
466
8
X 1.10= P64.07
(+3.3%)
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Regional Tripartite Wages and Productivity Board – National Capital Region
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Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 4. Application to Contractors
In case of contracting out of projects and for
security, janitorial and similar services:
 The wage rate prescribed shall be borne by the
principals or clients
 The contract is deemed amended
 The service contractor shall be jointly and
severally liable with the principal or client if the
latter fails to pay the prescribed wage rates.
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Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 5. Application to Private Educational Institutions
For Schools that increased tuition fees in SY 2015-2016
Workers’
share in tuition fee increase shall be
considered as compliance with the Wage Order.
Any shortfall shall be given starting SY 2016-2017.
For SY 2016-2017
All Schools shall implement the WO whether they
increased tuition fees or not.
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Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 8. Exemptions
Upon application with the Board 75 days from the
date of publication of IRR.
1. Distressed Establishments
2. Retail and Service establishments employing not
more than ten (10) Workers
3. Establishments adversely affected by natural
calamities
EXEMPTION IS FOR A MAXIMUM PERIOD OF
ONE YEAR FROM EFFECTIVITY OF THE WAGE ORDER
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Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 10. Creditable Wage Increase
For Organized Firms
For Unorganized Firms
Wage increase granted
Wage increase
within 3 months prior to
granted within 5
effectivity (i.e. Jan. 3 to
months prior to
April 3, 2015) may be
effectivity (i.e. Nov. 3,
credited, if specified in
2014 to April 3, 2015)
CBA.
may be credited.
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Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 10. Creditable Wage Increase
In both cases:
 Does not include anniversary, merit increase,
and those resulting from regularization or
promotion of employees.
 If the increase granted is less than the
prescribed adjustment, the employer shall
pay the difference.
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Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 11. Effects on Existing Wage Structure
Wage Distortion
Wage Distortion happens when the implementation of a mandated
minimum wage increase results in:
Elimination or disappearance of a wage differential or,
Severe contraction
Elimination means that the previous wage differential or gap no longer
exists.
Severe contraction – contraction by more than 50% of the previous
wage differential or gap in pay between two groups of workers in an
establishment
(Metrobank and Trust Company Employees Union – ALU-TUCP vs. NLRC, 226 SCRA 268)
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Regional Tripartite Wages and Productivity Board – National Capital Region
Severe Contraction
CONTRACTION =
(Previous Wage Difference) – (New Wage Difference)
x 100
Previous Wage Difference
If the result is more than 50%, there is a Wage Distortion.
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Regional Tripartite Wages and Productivity Board – National Capital Region
Possible Wage Distortion
Adjustment Formulae
Assumptions:
MW under W.O. No. NCR-18 = P466
Mandated Increase under W.O. No. NCR-19 = P15
Wage of Employee = P500
(1989)
= P466
P500
x P15 = P13.98
(1981)
2
=
P466
P500
2
x P15
=
(0.932) x (0.932) x 15
=
P13.03
(Modified Carian Formula, 1991)
x
Assuming the worker belongs to the 90th percentile pay
group
= 0.90 x P15
= P13.50
(1993)
Assuming agreed amount = P5.00
=
P466.00
P500 +P5
= P13.84
x P15
(1996)
Assuming the creditable CBA Anniversary Increase is P5.00
= P466
P500
= P9.32
x (P15 – P5)
(1998)
= P15
P466
= P16.09
x P500
Sec. 12. Complaints For Non-Compliance
Complaints for non-compliance with this Order shall be
filed with the DOLE-NCR, and shall be the subject of
enforcement proceedings under Articles 128 and 129 of
the Labor Code, as amended.
DOLE –NCR Field Offices
Director Lilibeth T. Caraga
QUEZON CITY
497-3002
4/F Arcadia Bldg., Quezon Ave.
Director Leonides P. Castillon, Jr.
MANILA
302-9269
4/F DY International Bldg.
San Marcelino cor. Malvar St.
Malate, Manila
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Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 12. Complaints For Non-Compliance
Director Rowela Grande
336-5062
MAKATI / PASAY
5/F ECC Bldg.,
Sen. Gil Puyat Ave. Ext.
Makati City
Director Corazon M. Pepito
661-5042
PAPAMAMARISAN
(Pasig, Pateros, Mandaluyong,
Marikina, San Juan)
Rudgen Bldg., #17 Shaw Blvd.
Brgy. San Antonio, Pasig City
Director Benvenuto C. Alegre
808-6165
MUNTAPARLAS
(Muntinlupa, Taguig, Parañaque, Las Piñas)
263 Valenzuela Bldg, Alabang Zapote Road
Director Andrea P. Cabansag
362-3187
CAMANAVA
(Caloocan, Malabon, Navotas, Valenzuela)
5/F Araneta Square Center, Monumento Circle Calocan City
Regional Tripartite Wages and Productivity Board – National Capital Region
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PROVISIONS ON
PRODUCTIVITY
Sec. 13. Productivity And Other Performance Incentive Programs
In order to sustain rising levels of wages and enhance
competitiveness, labor and management as partners
are encouraged to adopt productivity improvement
schemes:

Time and Motion Studies

Good Housekeeping

Quality Circles

Labor and Management Cooperation

Gain Sharing and other performance incentive programs.
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Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 22. Advisory on Productivity Based Pay
Pursuant to the Two-Tiered Wage System, Wage Advisory No. NCR01 has been issued to guide private establishments in the
formulation, adoption and implementation of productivity programs
and performance and productivity-based incentive schemes that an
enterprise may provide based on agreement between workers and
management.
Wage Advisory No.
NCR-01
Issued: October 3, 2014
Effectivity: October 18,
2014
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Regional Tripartite Wages and Productivity Board – National Capital Region
Other Provisions
The other provisions are
standard provisions contained
in the 18 Wage Orders
previously issued.
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Regional Tripartite Wages and Productivity Board – National Capital Region
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