To guide enterprises in correcting wage distortion stemming from the implementation of minimum wage orders, the National Wages and Productivity Commission issued Wage Advisory No. 1, Series of 2023 on 14 August 2023.

The newly released advisory reiterates relevant provisions of the Labor Code and jurisprudence on the matter, outlines how instances of wage distortion may be recognized, and provides suggested formulas with sample computations for addressing and correcting these distortions.

Wage distortion occurs when the variations in wage structures or rates among employee groups within an enterprise are significantly eliminated or substantially diminished due to mandated wage increases. Restoring the substantial distinction or gap is permissible under Article 124 of the Labor Code.

Addressing wage distortions is crucial for maintaining equity, boosting employee morale, and fostering a productive and harmonious workplace. By rectifying such, enterprises demonstrate their commitment to fair compensation and employee well-being.

The Commission encourages enterprises to seek guidance and technical assistance from the Regional Tripartite Wages and Productivity Boards when facing wage distortion concerns. The Regional Boards’ contact details can be accessed through this link: https://nwpc.dole.gov.ph/social-media-account/

To date, the minimum wage rates in the National Capital Region have been adjusted by PhP40.00 effective 16 July 2023. END/ NWPC

To read the full advisory, please click here.