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Philippines
Tuesday, February 27, 2024

Wage distortions must be fixed, DOLE tells firms

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The Department of Labor and Employment called on employers to correct wage distortions among their employees following an increase in the minimum wage.

DOLE said the National Wages and Productivity Commission (NWPC) issued an advisory to “guide enterprises in correcting wage distortion stemming from the implementation of minimum wage orders.”

“Addressing wage distortions is crucial for maintaining equity, boosting employee morale, and fostering a productive and harmonious workplace,” the Labor Department said.

“By rectifying such, enterprises demonstrate their commitment to fair compensation and employee well-being,” it added.

Wage distortion occurs when the variations in wage structures or rates among employee groups within an enterprise are significantly eliminated or substantially diminished due to mandated wage increases, DOLE said.

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Restoring the substantial distinction or gap is permissible under the Labor Code.

For his part, Senate President Juan Miguel Zubiri said a wage hike will attract skilled workers to stay in the country instead of going abroad as he renewed his call for a P150 legislated increase in the minimum wage.

He called the attention of the administration’s economic managers who are opposed to a legislated wage hike.

“What is bad is that the P40 wage hike is only in Metro Manila. In our place in Mindanao, it has not moved,” Zubiri said.

“Do you know what the daily wage earner in her [Budget Secretary Amenah Pangandaman] province earns? P340. What can you buy with P340 for a family of five?” Zubiri said.

While Zubiri acknowledged Finance Secretary Benjamin Diokno’s concern that raising minimum wages will have an adverse effect on inflation, he said this can be addressed by focusing efforts on reducing energy and food costs.

Earlier, the country’s biggest group of retailers warned that at least 200,000 workers in the retail sector may lose their jobs if lawmakers push through with their proposed P150 across-the-board legislated daily wage hike.

The Philippine Retailers Association said the proposed measure will result in an increase in the unemployment rate and the possible shutdown of micro and small businesses.

“Our concern with the wage hike is that it will bring up labor problems. We’re not talking here of labor unrest, but more of businesses retiring or laying off workers to squeeze the wage hike into the companies’ operating budget,” said PRA president Roberto Claudio.

“The legislated wage hike must be synchronized with our inflation and ability to generate investments,” he added.

The National Wages and Productivity Commission approved in June a P40 increase in the minimum wage of private sector workers in Metro Manila. The order is expected to benefit 1.1 million minimum-wage earners in the metropolis.

With the latest wage adjustment, the daily minimum wage rate in Metro Manila would be raised to P610 from P570. There are 10 other wage hike petitions outside Metro Manila that are pending with various wage boards.

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