An Act Providing for an Increase in the Wage of Public or Government Sector Employees on a Daily Wage Basis and in the Statutory Minimum Wage and Salary Rates of Employees and Workers in the Private Sector and for other purposes

Republic Act No. 6640

Summary of Republic Act No. 6640

Wage Increase for Public Sector Employees:
- All public or government sector employees on a daily wage basis shall receive an increase of ₱10.00 per day. (Section 1)
- The Department of Budget and Management shall issue rules and regulations for implementing the salary adjustment. (Section 1)

Minimum Wage Increase for Private Sector Employees:
- The statutory minimum wage rates for private sector workers and employees, whether agricultural or non-agricultural, shall be increased by ₱10.00 per day. (Section 2)
- Non-agricultural workers and employees outside Metro Manila shall receive an increase of ₱11.00 per day. (Section 2)
- Those already receiving above the minimum wage up to ₱100.00 shall receive an increase of ₱10.00 per day. (Section 2)
- Domestic helpers and persons employed in personal service are excluded from the minimum wage increase. (Section 2)

Wage Distortion Resolution:
- If the minimum wage increase results in wage distortions within an establishment, the dispute shall first be settled voluntarily between the parties. (Section 3)
- If a deadlock occurs, the dispute shall be resolved through compulsory arbitration by the National Labor Relations Commission's (NLRC) arbitration branch. (Section 3)
- The NLRC must conduct continuous hearings and decide the dispute within 30 days from formal submission. (Section 3)
- The pendency of a wage distortion dispute shall not delay the applicability of the wage increase. (Section 3)
- "Wage distortion" is defined as a situation where the minimum wage increase eliminates or severely contracts intentional wage differences between employee groups based on skills, length of service, or other logical basis. (Section 3)

Workers Paid by Result:
- Workers paid by result, including piecework, takay, pakyaw, or task basis, shall receive not less than the applicable statutory minimum wage for eight hours of work or a proportion thereof for less than eight hours. (Section 4)

Learners, Apprentices, and Handicapped Workers:
- Learners, apprentices, and handicapped workers shall be entitled to not less than 75% of the applicable adjusted minimum wage. (Section 5)
- A handicapped worker is one whose efficiency or quality of work is impaired by disability in relation to the work performed. (Section 5)
- Existing learnership and apprenticeship agreements shall be automatically modified to reflect the wage increase. (Section 5)

Construction Projects and Service Contracts:
- For construction projects and security, janitorial, and similar services, the increase in the minimum wage shall be borne by the employers of the construction workers, security guards, janitors, and others similarly situated. (Section 6)
- The principal or client of the construction and service contractor shall be subsidiarily liable, except for construction of family homes worth not more than ₱200,000.00. (Section 6)

Existing Benefits and Allowances:
- Nothing in this Act shall be construed to reduce any existing allowances and benefits of any form under existing laws, decrees, issuances, executive orders, and/or under any contract or agreement between workers and employers. (Section 7)

Exemptions for Retail Businesses:
- The Department of Labor and Employment may grant exemption from compliance with this Act to employers in the retail business regularly employing not more than 10 workers, upon application. (Section 8)
- If an application for exemption is filed, action on any complaint for non-compliance shall be deferred pending resolution of the application. (Section 8)
- If exemption is not granted, employees shall receive the appropriate compensation due plus 1% interest per month retroactive to the effectivity of this law. (Section 8)

Implementation and Penalties:
- The Secretary of Labor and Employment shall promulgate the necessary rules and regulations to implement this Act. (Section 9)
- Any person, corporation, trust, firm, partnership, association, or entity violating this Act shall be punished by a fine not exceeding ₱25,000.00 and/or imprisonment for not less than one year nor more than two years. (Section 10)
- If the violation is committed by a corporation, trust, firm, partnership, association, or other entity, the penalty of imprisonment shall be imposed upon the responsible officers, including the president, vice-president, chief executive officer, general manager, managing director, or partner. (Section 10)
- Persons convicted under this Act shall not be entitled to the benefits provided for under the Probation Law. (Section 10)

Funding:
- The wage increase for public sector employees shall be funded from the Compensation and Organizational Adjustment Fund, the Contingent Fund, other savings under Executive Order No. 87 (General Appropriations Act for Fiscal Year 1987), or any unappropriated funds of the National Treasury. (Section 11)
- Any deficiency shall be charged against the personal services savings of the National Government. (Section 11)
- The corresponding amount for the increase will be included in the annual General Appropriations Act for the succeeding years. (Section 11)

Repealing Clause and Separability Clause:
- All laws, orders, issuances, rules and regulations, or parts thereof inconsistent with the provisions of this Act are hereby repealed or amended accordingly. (Section 12)
- If any provision or part of this Act, or the application thereof to any person or circumstance, is held invalid or unconstitutional, the remainder of this Act or the application of such provision or part thereof to other persons or circumstances shall not be affected. (Section 12)

Effectivity:
- This Act shall take effect the day following its publication in two national newspapers of general circulation. (Section 13)