The Department of Labor and Employment is encouraging private establishments and employers to do away with manual cash payment and instead open accounts to financial institutions for easy electronic payment of salaries.
Labor Undersecretary Claro Arellano said electronic salary payment would foster financial inclusion of workers and would effectively monitor proper payment of wages.
Arellano said there was a need to do away with manual cash disbursements and instead open formal accounts for payment of wages to enable easier verification and validation.
Citing the 2017 Global Findex Report, Arellano said that only 6.6 percent of the country’s private sector wage earners receive their salaries through a formal account, which is a deposit or e-money account held in a supervised financial institution.
“A low financial inclusion among the wage earners may be a source of abuses against the workers and violations of labor laws as there can be difficulty in verifying and validating the payment of correct wages and other mandatory benefits,” he added.
He said the DOLE and BSP partnered to promote financial inclusion through the electronic payment of wages and benefits.