DOLE urges correction of wage distortion for equity

The Philippines is urging employers to correct wage distortion with the implementation of minimum wage to ensure fair treatment of employees.
By: | August 23, 2023
Topics: Compensation and Benefits | Philippines

The Department of Labour and Employment (DOLE) in the Philippines has urged employers to correct wage distortion amongst employees. DOLE’s National Wages and Productivity Commission (NWPC) has issued Advisory No. 1-2023 that would look to direct and guide enterprises in correcting wage distortion caused by the implementation of minimum wage, reported Philippine Star.

This newly released advisory “reiterates relevant provisions of the Labour Code and jurisprudence on the matter” and outlines how wage distortion incidences can be recognised, as well as suggested formulas with sample computations for addressing and correcting the distortion. DOLE stressed the importance of addressing wage distortion to maintain equity, boost employee morale, and foster a productive and harmonious workplace.

“By rectifying such, enterprises demonstrate their commitment to fair compensation and employee wellbeing,” said the agency.

When facing wage distortion concerns, enterprises should seek guidance and technical assistance from the Regional Tripartite Wages and Productivity Boards, said the NWPC, in a statement.

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To date, the minimum wage rates in Metro Manila have been adjusted by PHP40 (US$0.71) as of July 2023. The Federation of Free Workers (FFW) has warned private establishments that the issue of wage distortion may cause strife in workplaces if left unresolved.

Sonny Matula, President of the FFW, said, “The PHP40 wage hike in the National Capital Region will surely bring wage distortion. This situation can lead to unfairness and potential unrest among the workforce as it disrupts the established hierarchy of wage scales.”