Providing For Additional Mandatory Emergency Living Allowance For Wage Earners

Case Overview and Summary

Summary of Presidential Decree No. 1634

Providing Additional Mandatory Emergency Living Allowance for Wage Earners

• Employers must pay employees earning ₱1,500 or less per month an additional mandatory emergency living allowance of ₱60 effective September 1, 1979, and another ₱30 effective January 1, 1980. (Section 1)

• Exemptions from the allowance:
- Cottage industries, handicrafts, and shellcrafts. (Section 1a)
- Small and medium enterprises established after the decree, for 2 years from start-up. (Section 1b)
- Retail and service enterprises outside Metro Manila and cities with population ≤150,000; in Metro Manila and cities with population >150,000, those employing ≤15 workers. (Section 1c)
- Non-plantation agriculture and plantations/enterprises with area ≤24 hectares or employing ≤20 workers; sugar industry subject to LOI 829. (Section 1d)
- Labor-intensive and export-oriented enterprises in garments, footwear, furniture, leather, and electronics until December 31, 1979, unless able to pay as determined by the Minister of Labor. (Section 1e)
- Private hospitals outside Metro Manila; in Metro Manila, those with bed capacity ≤100. (Section 1f)
- Private educational institutions until allowed to adjust tuition fees. (Section 1g)
- Employers who have granted wage increases of at least ₱60 on or after August 1, 1979. (Section 1h)

• For construction contracts based on lower wages before the decree, the owner/principal must compensate the contractor for the labor cost difference in remaining work. (Section 2)

• In the hotel and restaurant industry, 50% of credited tips/service charges may be included in computing the minimum wage and allowances. (Section 3)

• The Minister of Labor may grant full or partial exemption or deferment to temporarily distressed or new enterprises upon recommendation of concerned ministries. (Section 4)

• A tripartite advisory committee may assist the Minister of Labor in implementing the decree. (Section 4)

• The Standing Cabinet Committee shall monitor implementation, receive grievances, and act on adverse effects. (Section 5)

• Violations shall be punished under applicable Labor Code provisions for non-payment of wages and benefits. (Section 6)

Implementing Rules:
• Defines terms such as cottage industries, small and medium enterprises, retail and service enterprises, agriculture, plantations, and labor-intensive export-oriented industries. (Section 1)
• Outlines criteria for determining if an employer is actually distressed or facing potential distress to qualify for exemption. (Section 8)
• Specifies requirements for applying for exemption, including financial statements and tax returns. (Section 7)
• Clarifies how the allowance should be paid, credited benefits, relation to other agreements and issuances, and enforcement provisions. (Sections 9-21)