DOLE urges employers to correct wage distortions
MANILA – The Department of Labor and Employment has urged establishments covered by new wage orders to quickly adjust their wage structures to correct any wage distortions.
“RA 6727 or the Minimum Wage Fixing Law provides for methods for correcting wage distortions, and companies and establishments should readily avail of these methods to avoid unnecessary disputes,” a statement of the DOLE said.
The provision for correcting wage distortions is also stipulated in all wage orders being issued by the Regional Tripartite Wages and Productivity Boards (RTWPBs), it added.
The DOLE cautioned that if the “distortion” in the salary rates of workers is not corrected, it could lead to demoralization that, in turn, could disrupt the harmonious work relationships between and among workers and employers in the establishments.
The DOLE encourages employers and workers to immediately work on correcting wage distortions to avoid demoralization among workers as this could affect productivity in the workplace.
The National Wages and Productivity Commission has suggested formulas that would address wage distortion. One of the suggested formulas is by computing the previous minimum wage over the worker’s current daily rate multiplied by the amount of the latest mandated wage increase.
Wage “distortion” occurs when the usual differentials in wage rates between groups of employees in an establishment are drastically reduced or eliminated due to mandated wage increases. This means that the differences in wage structure based on skills, length of service, or other logical bases of differentiation may be eliminated if the other employees already receiving more than the minimum wage will not also have a corresponding increase in their salaries. Restoring a substantial or significant gap, as against the historical wage differentials, is allowed under existing jurisprudence.
In unionized firms, the employer and the union should negotiate to correct the distortion using the grievance procedures in the collective bargaining agreement or CBA or, if the dispute remains unresolved, through voluntary arbitration
In unionized firms, employers and workers should also endeavor to correct the distortion. Any dispute is settled by conciliation through the National Conciliation and Mediation Board, or if it remains unresolved, by compulsory arbitration through the National Labor Relations Commission.
To date, the minimum wages have been adjusted in eight regions, namely, NCR and in Regions 6 (Western Visayas); 7 (Central Visayas); 9 (Zamboanga Peninsula); 10 (Northern Mindanao; 11 (Southern Mindanao); 13 (CARAGA) and in the Autonomous Region in Muslim Mindanao.*PNA
