Updated 2024 by Sharlyn Lao
Minimum wage is the lowest legal hourly or monthly wage that an employer is required to pay to their employees. It serves as a protective measure, intended to establish a base level of income that enables workers to meet their basic needs. Minimum wage laws are generally enforced by the government and, in some cases, adjusted periodically to account for inflation and changing economic conditions.
Exempted from Receiving Minimum Wage
The following are exempted from minimum wage regulations:
- Micro and sole proprietorship businesses that meet the Barangay Micro Business Establishment (BMBE) criteria, involving assets below PHP 3 million. To qualify for this exemption, businesses must obtain:
- BMBE certification from the Department of Trade and Industry (DTI)
- Additional certification for income tax exemption from the Bureau of Internal Revenue (BIR)
- Service or retail establishments with not more than 10 employees
- Organizations that are adversely affected by calamities or human-induced disasters
Application forms can be found in the DOLE website. It's important to note that the exemption granted to eligible businesses is valid for one year. Following this period, the NWPC and Regional Boards will mandate employers to pay their employees the minimum wage.
Current Minimum Wage in Metro Manila 2024
On June 27 2024, the Wage Board implemented a series of wage adjustments, augmenting the existing daily wage rates by an additional PHP 35.00.
Furthermore, a revised wage structure was introduced for domestic helpers, featuring a substantial increase of PHP 500.00, thereby establishing the revised total rate at PHP 6,500.00.
Below is a table to help enhance your understanding:
Per Wage Order No. NCR-25 and NCR-DW-04
| Effective Date | Category | Current Minimum Wage Rate | New Wage Increase | New Minimum Wage Rates |
|---|---|---|---|---|
| 17 July 2024 | Non-Agriculture | PHP 610.00 | PHP 35.00 | PHP 645.00 |
| Agriculture (Plantation and Non -Plantation) | PHP 573.00 | PHP 35.00 | PHP 608.00 | |
| Service/Retail Establishments employing 15 workers or less | ||||
| Manufacturing regularly employing less than 10 workers | ||||
| 3 January 2024 | Local Domestic Workers | PHP 6,000.00 | PHP 500.00 | PHP 6,500.00 |
Note
This table only shows rates for the year 2024Cities and Municipalities under Metro Manila
| Cities | Municipalities | ||
|---|---|---|---|
| Caloocan | Las Piñas | Mandaluyong | Pateros |
| Manila | Makati | Marikina | |
| Malabon | Muntinlupa | Navotas | |
| Parañaque | Pasay | Pasig | |
| Quezon | San Juan | Taguig | |
| Valenzuela | Navotas | ||
How is Minimum Wage Determined?
In 2012, the Department of Labor and Employment (DOLE), in association with the National Wages and Productivity Commission (NWPC), introduced the dual-tiered wage system (2TWS).
There are four factors that influence the determination of minimum wage including:
- Needs of workers and their families
- Demand for living wage
- Wage adjustment vis-à-vis Consumer Price Index (CPI)
- Cost of living and changes therein
- Needs of workers and their families
- Improvements in standards of living
- Capacity to pay
- Fair return on capital invested and capacity to pay of employers
- Productivity
- Comparable wages and incomes
- Prevailing wage levels
- Requirements of economic and social development
- Need to induce industries to invest in the countryside
- Effects on employment generation and family income
- Equitable distribution of income and wealth along the imperatives of economic social development
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