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Republic of the Philippines

Department of Labor and Employment
National Wages and Productivity Commission
REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD
Region VII, Central Visayas


IMPLEMENTING RULES AND REGULATIONS OF
WAGE ORDER NO. ROVII-18

Pursuant to Section 6, Rule IV of the Amended Rules of Procedure on Minimum Wage Fixing and
Section 23 of Wage Order No. ROVII-18, the following Rules are hereby issued for guidance and
compliance by all concerned.

Rule I General Provisions

Section 1. Title. This Rules shall be known as the Implementing Rules and Regulations of Wage
Order No. ROVII-18.

Section 2. Definition of Terms. As used in this rules:

a) Order means Wage Order No. ROVII-18.
b) Commission refers to the National Wages and Productivity Commission.
c) Board means the Regional Tripartite Wages and Productivity Board, Region VII.
d) Department means the Department of Labor and Employment.
e) Region VII is the geographic area in Central Visayas covering the Provinces of Cebu,
Bohol, Negros Oriental and Siquijor and its component cities.
f) Agriculture refers to farming in all its branches and among others, include the cultivation
and tillage of the soil, production, cultivation, growing and harvesting of any agricultural and
horticultural commodities, dairying, raising of livestock or poultry, the culture of fish and other
aquatic products in farms or ponds, and any activities performed by a farmer or on a farm as
an incident to or in conjunction with such farming operations, but does not include the
manufacturing and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or
other farm products.
g) Class A refers to the Cities of Carcar, Cebu, Danao, Lapu-Lapu, Mandaue, Naga and
Talisay and the Municipalities of Compostela, Consolacion, Cordova, Liloan, Minglanilla, and
San Fernando or (expanded Metro Cebu).
h) Class B refers to the Cities of Toledo and Bogo and the rest of the municipalities in the
Province of Cebu except the municipalities in the Islands of Bantayan and Camotes.
i) Class C refers to the cities and municipalities in the Provinces of Bohol and Negros
Oriental.
j) Class D refers to the municipalities in the Province of Siquijor and municipalities in the
Islands of Bantayan and Camotes.
k) Establishments refer to economic units which engage in one or predominantly one kind of
economic activity at a single fixed location. For purposes of determining eligibility,
establishments under the same owner/s but separately registered with the Securities and
Exchange Commission (SEC), Department of Trade and Industry (DTI) or Cooperative
Development Authority (CDA), as the case may be, irrespective of their location, shall be
treated as individual and distinct establishments.
l) Distressed Establishments refer to establishments which meet the criteria enumerated in
Section 3A of the Amended Rules on Exemption (NWPC Guidelines No 02, Series of 2007).
m) Retail Establishment refers to an entity principally engaged in the sale of goods to end users
for personal or household use. A retail establishment that regularly engages in wholesale
activities loses its retail character.
n) Service Establishment refers to an entity principally engaged in the sale of services to
individuals for his/her own or household use and is generally recognized as such.
o) New Business Enterprise refers to establishments, including non-profit institutions,
established within two (2) years from effectivity of the Wage Order based on the latest
registration with the appropriate government agency such as SEC, DTI, CDA and Mayors
Office.
p) Barangay Micro-Business Enterprise (BMBE) refers to any registered business entity or
enterprise granted a Certificate of Authority pursuant to Republic Act 9178.
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q) Paid-up Capital refers to the total amount of shareholder capital that has been paid by
shareholders.
r) Capital refers to paid-up capital at the end of the last full accounting period, in the case of
corporations or total invested capital at the beginning of the period under review, in the case
of partnerships and single proprietorships.
s) Capital Impairment refers to the diminution of capital due to accumulated losses.
t) Stockholders Equity refers to the residual interest in the assets of an entity that remains
after deducting its liabilities. It is total assets minus total liabilities. It is the same as equity and
net worth.
u) Full Accounting Period refers to a period of twelve (12) months or one year of business
operations.
v) Interim Period refers to a financial reporting period shorter than a full financial year (most
typically a quarter or half year).
w) Deficit refers to the negative balance of the retained earnings account of a corporation.
Retained Earnings represent the cumulative balance of periodic earnings, dividend
distributions, prior period adjustments and other capital adjustments.
x) Total Assets refers to things of value owned by the business such as cash, machines,
building and land which can be measured or expressed in money terms.
y) Net Loss refers to actual loss suffered by a company after deducting expenditures including
overhead and interest charges from revenues.
z) Financial Statement refers to a written report which quantitatively describes the financial
health of a company. This includes the following: balance sheet, income statement, statement
of changes in equity, cash flow statement and notes to financial statement
aa) Stock Corporation refers to one organized for profit and issues shares of stock to its
members
bb) Non-Stock Non-Profit Organization refers to one organized principally for public purposes
such as charitable, educational, cultural or similar purposes and does not issue shares of
stocks to its members.
cc) Partnership refers to an association of two or more persons who bind themselves to
contribute money, property or industry to a common fund with the intention of dividing the
profits among themselves or for the exercise of a profession
dd) Single Proprietorship refers to a business unit owned and controlled by only one person.
ee) Cooperative refers to a duly registered association pursuant to RA 6938
(Cooperative Code of the Philippines) and other laws.
ff) Quasi-Banks refer to institutions such as investment houses and financing companies
performing quasi-banking functions as defined by the Bangko Sentral ng Pilipinas.
gg) Conservatorship refers to remedy resorted to by the Monetary Board in case a bank or
quasi-bank is in a state of continuing inability or unwillingness to maintain condition of liquidity
deemed adequate to protect the interests of the depositors and creditors. A conservator is
appointed to manage the establishment in order to restore its viability.
hh) Receivership/Liquidation refers to a remedy resorted by the Monetary Board in case a
bank or quasi-bank is (a) unable to pay its liabilities as they become due in the ordinary
course of business; (b) has insufficient realizable assets as determined by the Bangko Sentral
ng Pilipinas to meet its liabilities; (c) cannot continue in business without involving probable
losses to its depositors or creditors; or (d) has willfully violated a cease and desist order under
Sec. 37 that has become final involving acts or transactions which amount to fraud or
dissipation of the assets of the institution.
ii) Under Corporate Rehabilitation refers to establishments that are placed under a
rehabilitation receiver by a court of competent jurisdiction.
jj) Wage Distortion as defined under Article 124 of Presidential Decree No. 442, otherwise
known as the Labor Code of the Philippines as amended, refers to a situation where an
increase in the prescribed wage rates results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rates between and among employee
groups in an establishment as to effectively obliterate the distinction embodied in such wage
structure based on skills, length of service, or other logical bases of differentiation.
kk) Cost of Living Allowance (COLA) refers to the cost of living allowance prescribed by the
Board for covered private sector workers and employees in Central Visayas.

Rule II Wage Increase

Section 1. Amount of Increase. Upon effectivity of this Wage Order, the daily minimum wage
rates of all private sector workers and employees shall be increased by THIRTEEN PESOS (P 13.00) in
the form of COST OF LIVING ALLOWANCE (COLA). The grant of COLA shall be subject to review after
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six months. The new daily minimum wage rate in the region for each area classification including
agriculture sugar and sugar mills shall be as follows:


There shall be no increase in the minimum wage rates due to two major calamities in the
following areas:
* Bogo City, San Remigio, Medellin, Tabuelan, Tabogon, Tuburan, Daanbantayan, Sogod and Borbon
** Bohol Province
*** Camotes and Bantayan Islands

Section 2. Coverage. a). The wage increase prescribed in the Order shall apply to all private sector
minimum wage workers and employees in the Region, regardless of their position, designation, or status
and irrespective of the method by which their wages are paid.

b). Not covered from the provisions of the Order are household or domestic helpers, workers
employed in the personal service of another, including family drivers, workers of duly registered Barangay
Micro-Business Enterprises with Certificates of Authority.

c). Wages of all workers and employees whose rates are less than the prescribed minimum wage
rates pursuant to Sections 1 and 2 of the Order shall be adjusted accordingly.

Section 3. Basis of Minimum Wage Rates. The minimum wage rates prescribed herein shall be for
the normal working hours, which shall not exceed eight (8) hours work per day.

Section 4. Application to Private Educational Institutions. a) In the case of private educational
institutions, the share of covered workers and employees in the increase in tuition fees for School Year
2014-2015 shall be considered as compliance with the increase prescribed herein. However, payment of
any shortfall in the wage increase set forth herein shall be covered starting School Year 2015-2016.

b) Private educational institutions which have not increased their tuition fees for the School Year
2014-2015 may defer compliance with the increase prescribed herein until the beginning of School Year
2015-2016.

c) In any case, private educational institutions shall implement the increase prescribed herein starting
School Year 2015-2016.

Section 5. Application to Contractors. In the case of contracts for construction projects and for
security, janitorial services, the prescribed wage increases shall be borne by the principals or clients of the
construction/service contractors and the contract shall be deemed amended accordingly. In the event,



AREA
CLASSIFICATION

AGRICULTURE
SUGAR MILLS
NON-AGRICULTURE NON-SUGAR SUGAR
Basic
(Under
WO No.
17)

COLA

New
Minimum
Wage
Basic
(Under
WO No.
17)

COLA

New
Minimum
Wage
Basic
(Under
WO No.
17)

COLA

New
Minimum
Wage
Basic
(Under
WO No.
17)

COLA

New
Minimum
Wage

Class A
(Cities of Carcar, Cebu,
Danao, Lapu-lapu, Mandaue,
Naga, Talisay and
Municipalities of
Compostela, Consolacion,
Cordova, Liloan, Minglanilla,
San Fernando or Expanded
Metro Cebu
P327.00 P13.00 P340.00 P309.00 P13.00 P322.00 P277.00 P13.00 P290.00 P297.00 P13.00 P310.00
Class B
(Cities of Toledo, Bogo and
rest of Municipalities in Cebu
Province except Bantayan
and Camotes Islands
P307.00 P13.00
*
P320.00 P292.00 P13.00
*
P305.00 P277.00 P13.00
*
P290.00 P297.00

P13.00
*
P310.00
Class C
(Cities and Municipalities in
Bohol & Negros Oriental
Provinces
P297.00 P13.00
**

P310.00 P277.00 P13.00
**
P290.00 P277.00 P13.00
**
P290.00 P297.00 P13.00
**
P310.00
Class D
(Municipalties in Siquijor
Province & Municipalities in
Bantayan & Camotes Islands
P282.00 P13.00
***
P295.00 P262.00 P13.00
***
P275.00 P277.00 P13.00
***
P290.00 P297.00 P13.00
***
P310.00
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however, that the principal or client fails to pay the prescribed wage rates, the construction/service
contractor shall be jointly and severally liable with his principal or client.

Section 6. Workers Paid by Results. a) All workers paid by results, including those who are paid
on piecework, takay, pakyaw, or task basis, shall receive not less than the applicable minimum wage rates
prescribed under the Order for the normal working hours which shall not exceed eight (8) hours work a day,
or a proportion thereof for work of less than the normal working hours.

b) The wage rates of workers who are paid by results shall continue to be established in accordance
with Article 101 of the Labor Code, as amended and its implementing rules and regulations.

c) The adjusted minimum wage rates for workers paid by results shall be computed in accordance
with the following steps:

1. Amount of increase in AMW*
------------------------------------- X 100 = Percent increase;
Previous AMW


2. Existing rate/piece X Percent increase = Increase in rate/piece;
3. Existing rate/piece + Increase in rate/piece = Adjusted rate/piece

* Where AMW is the applicable minimum wage rate.

Section 7. Mobile Workers. The wage increase of workers, who by the nature of their work have to
travel, shall be those applicable in the domicile or head office of the employer.

Section 8. Branch Workers. The wage increase of workers working in branches or agencies of
establishments within the Region shall be those applicable in the place where they are stationed.

Section 9. Transfer / Assignment of Workers. The transfer/assignment of workers to areas with
lower wage rates shall in no case result to reduction of higher wages being enjoyed by the worker prior to
such transfer. However, where the worker is transferred/assigned to an area with higher wage, he shall be
entitled to the higher wage therein.

Section 10. Suggested Formulae in Determining the Equivalent Monthly Regional Minimum
Wage Rates. Without prejudice to existing company practices, agreements or policies, the following
formulae may be used in determining the Estimated Equivalent Monthly Rates (EEMR) of the employees:

a. For those who are required to work every day including Sundays, or rest days, special days and
regular holidays

Applicable Daily Rate x 393.50
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where 393.50 days: 298 ordinary working days
67.60 52 rest days x 130%
24 12 regular holidays x 200%
3.90 3 special days x 130%
393.50 Total equivalent no. of days in a year

b. For those who do not work but are considered paid on rest days, special days and regular days

Applicable Daily Rate x 365
12

Where 365 days: 298 ordinary working days
52 rest days
12 regular holidays
3 special days
365 Total equivalent no. of days in a year


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c. For those who do not work and are not considered paid on Sundays or rest days.

Applicable Daily Rate x 313
12

where 313 days = 298 ordinary working days
12 12 regular holidays
3 special days
313* Total equivalent no. of days in a year

d. For those who do not work and are not considered paid on Sundays, Saturdays or rest days.

Applicable Daily Rate x 261
12

where 261 days = 246 ordinary working days
12 12 regular holidays
3 special days
261* Total equivalent no. of days in a year

*313 and 261 if the three special days are considered paid

Section 11. Wages of Special Groups of Workers. a) Wages of apprentices and learners shall in
no case be less than seventy-five percent (75%) of the applicable minimum wage rates prescribed in the
Order.

b) All recognized learnership and apprenticeship agreements entered into before the effectivity of the
Order shall be considered as automatically modified insofar as their wage clauses are concerned to reflect
the adjustments prescribed under the Order.

c) All qualified handicapped workers shall receive the full amount of increase in this Order pursuant
to R.A. 7277.

Section 12. Appeal to the Commission. Any party aggrieved by the Wage Order may file an
appeal with the Commission through the Board within ten (10) calendar days from the publication
of the Order. The appeal shall be accompanied by a memorandum of appeal which shall state the grounds
relied upon and the arguments in support of the appeal.

Section 13. Grounds for Appeal. An appeal may be filed on the following grounds:

a. Non-conformity with the prescribed guidelines and/or procedures
b. Grave abuse of discretion
c. Questions of law.

Section 14. Effect of Appeal. The filing of the appeal does not operate to stay the Order unless the
party appealing such Order shall file with the Commission an undertaking with a surety or sureties
satisfactory to the Commission for payment to employees affected by the Order of the corresponding
increase, in the event such Order is affirmed.

Section 15. Transmittal of Records. Immediately upon receipt of the appeal, the Board Secretariat
shall transmit to the Commission Secretariat the appeal and a copy of the subject Wage Order together
with the complete records of the case and all relevant documents.

Rule III EXEMPTIONS

Section 1. Exemptible Establishments. Upon application with and as determined by the Board
based on documentation and other requirements in accordance with applicable rules and regulations
issued by the Commission, the following may be exempted from the applicability of this Order:
a. Distressed establishments
b. New business enterprises (NBEs)
c. Retail/Service establishments employing not more than ten (10) workers
d. Establishments adversely affected by natural calamities

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Section 2. Period of Filing Application for Exemption. Application for exemption from compliance
with this Wage Order shall be filed with the Board within seventy five (75) days from date of publication of
the Rules Implementing the Wage Order and that no further extension of filing and submission of required
documents shall be allowed.

An application in three (3) typewritten copies may be filed by the owner/manager or duly authorized
representative of an establishment in person or by registered mail. The date of mailing shall be deemed as
the date of filing. The application shall be under oath and accompanied by complete supporting documents
as specified in the Rules.

Section 3. Filing of Opposition. Any worker or, if unionized, the union in the applicant
establishment, may file with the Board within fifteen (15) days from receipt of the notice of the filing of
application, an opposition to the application for exemption stating the reasons why the same should not be
the approved, furnishing the applicant a copy thereof.

The opposition shall be in three (3) legible copies, under oath and accompanied by pertinent
documents, if any.

Section 4. Criteria for Exemption. The following criteria shall be used to determine whether or not
the applicant-establishment is qualified for exemption:

A. Distressed Establishments

1. For Corporations/Cooperatives

a. Full Exemption

a.1 When the deficit as of the last full accounting period immediately preceding the
effectivty of Wage Order amounts to 20% or more of the paid up capital for the same
period or

a.2 When an establishment registers capital deficiency (i.e negative stockholders equity),
as of the last full accounting period immediately preceding the effectivity of the Order
b. Partial Exemption
b.1. When the deficit of the last full accounting period immediately preceding the effectivity
the Order amounts to at least 10% but less than 20% of the paid-up capital for the
same period.
c. Conditional Exemption

c.1. When the actual net loss of the interim period immediately preceding the effectivity of
the Wage Order amounts to at least 25% of total assets.
2. For Single Proprietorships/Partnerships
a. Full Exemption:
a.1. When the accumulated net losses for the last two (2) full accounting periods
immediately preceding the effectivity of the Order amounts to 20% or more of the total
invested capital at the beginning of the period under review; or
a.2. When an establishment registers capital deficiency i.e., negative net worth as of the
last full accounting period immediately preceding the effectivity of the Order.
b. Partial Exemption:
b.1. When the accumulated net losses for the last two (2) full accounting periods
immediately preceding the effectivity of the Order amounts to at least 10% but less
than 20% of the total invested capital at the beginning of the period under review.
c. Conditional Exemption
c.1. When the actual net loss as of the interim period immediately preceding the effectivity
of the Order amounts to at least 25% of total assets.
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3. For Non-stock, Non-profit Organizations
a. Full Exemption:
a.1. When the accumulated net losses for the last two (2) full accounting periods
immediately preceding the effectivity of the Order amounts to 20% or more of the fund
balance/members' contribution at the beginning of the period; or
a.2. When an establishment registers capital deficiency i.e., negative fund
balance/members' contribution as of the last full accounting period or interim period, if
any, immediately preceding the effectivity of the Order.
b. Partial Exemption:
b.1. When the accumulated net losses for the last two (2) full accounting periods
immediately preceding the effectivity of the Order amounts to at least 10 % but not
more than 20% of the fund balance/members' contribution at the beginning of the
period.
c. Conditional Exemption:
c.1. When the actual net loss as of the interim period immediately preceding the effectivity
of the Order amounts to at least 25 % of total assets.
4. For Banks and Quasi-banks
a. Under receivership/liquidation
a.1 Exemption may be granted to a bank or quasi-bank under receivership or liquidation
when there is a certification from the Bangko Sentral ng Pilipinas that it is under
receivership or liquidation as provided in Section 30 of RA 7653, otherwise known as
the New Central Bank Act.

b. Under controllership/conservatorship

b.1 A bank or quasi-bank under controllership/ conservatorship may apply for exemption
as a distressed establishment under Section 3 of the Amended Rules on Exemption
(NWPC Guidelines No 02, Series of 2007)

5. Establishments Under Corporate Rehabilitation

Exemption may be granted to corporations, partnerships and associations under
corporate rehabilitation when there is an order from a court of competent jurisdiction
that it is under rehabilitation as provided in Section 6 Rule IV of the Interim Rules of
Procedure on Corporate Rehabilitation (2000).

B. New business enterprises (NBEs)

Those establishments including non-profit institutions established within two (2) years from
effectivity of the Wage Order based on the latest registration with appropriate government agency
such as SEC, DTI, CDA and Mayors Office.

C. Retail/Service Establishments Employing not more than Ten (10) Workers

Exemption may be granted to a retail/service establishment when:

1. It is engaged in the retail sale of goods and/or services to end users for personal and
household use
2. It is regularly employing not more than ten (10) workers regardless of status, except the
owner/s, for at least six (6) months in any given calendar year.





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D. Establishments Adversely Affected by Natural Calamities

1. The establishment must be located in an area declared by a competent authority as under a
state of calamity.
2. The natural calamities, such as earthquakes, typhoon, fire, floods and similar occurrences,
must have occurred within 6 months prior to the effectivity of the Order.

3. Losses suffered by the establishment as a result of the calamity that exceed the insurance
coverage should amount to 20 % or more of the stockholders equity as of the last full
accounting period in the case of corporations and cooperatives, total invested capital in the
case of partnerships and proprietorships and fund balance/members contribution in the case
of non-stock non-profit organizations.

Only losses or damage to properties directly resulting from the calamity and not incurred as a
result of normal business operations shall be considered.

4. Where necessary, the Board or its duly authorized representative shall conduct an ocular
inspection of the establishment or engage the services of experts to validate the extent of
damage

Section 5. Documents Required. The following supporting documents shall be submitted together
with the application:

For All Categories of Exemption

Proof of notice of filing of the application to the President of the union/contracting party if one is
organized in the establishment, or if there is no union, a copy of a circular giving general notice of the filing
of the application to all the workers in the establishment.
The proof of notice, which may be translated in the vernacular, shall state that the workers'
representative was furnished a copy of the application with all the supporting documents. The notice shall
be posted in a conspicuous place in the establishment.
A. Distressed Establishment
1. For Corporations, Cooperatives, Single Proprietorships, Partnerships, Non-stock, Non-profit
Organizations.
a. Full or Partial Exemption
a. 1. Audited financial statements (together with the Auditor's opinion and the notes thereto)
for the last (2) full accounting periods preceding the effectivity of the Order filed with and
stamped "received" by the appropriate government agency.
b. Conditional Exemption
b.1. Audited financial statement (together with the Auditor's opinion and the notes thereto) for
the last full accounting period and interim quarterly financial statement/s for the period
immediately preceding the effectivity of the Order.
b.2. To confirm the grant of conditional exemption, audited financial statements for the last full
accounting period, stamped received by the appropriate government agency, to be
submitted within 30 days from the lapse of the one-year exemption period.
2. For Banks and Quasi-banks
Certification from Bangko Sentral ng Pilipinas that it is under receivership/ liquidation.
3. For Establishments Under Corporate Rehabilitation
Order from a court of competent jurisdiction that the establishment is under rehabilitation.





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B. New business enterprises (NBEs)

b.1 Affidavit from employer regarding the following:

a. Principal economic activity
b. Date of registration with appropriate government agency
c. Amount of total assets

b. 2 Certificate of registration from the appropriate government agency

C. Retail/Service establishments employing not more than ten (10) workers

c.1 Affidavit executed by employer stating that it is a retail/service establishment and it is regularly
employing not more than ten (10) workers for at least six (6) months in any calendar year

d.2 Business Permit for the current year from the appropriate government agency

D. Establishments adversely affected by natural calamities

d.1 Affidavit executed by the General Manager or Chief Executive Officer of the establishment
regarding the following:

a. Date and type of calamity
b. Amount of losses/damages suffered as a direct result of the calamity
c. List of properties damaged/lost together with estimated valuation
d. For properties that are not insured, the statement that the same are not covered by
insurance

d.2 Copies of insurance policy contracts covering the properties damaged, if any

d.3 Adjusters report for insured properties

d.4 Audited financial statements (together with the Auditor's opinion and the notes thereto) for the
last full accounting period preceding the effectivity of the Order filed with and stamped
"received" by the appropriate government agency.

Section 6. Extent and Duration of Exemption.

a.)Full exemption of one (1) year from effectivity of the Order may be granted to
establishments that meet the applicable criteria for exemption under Section 3 of
Amended Rules on Exemption (NWPC Guidelines No. 2, Series of 2007).
b.) Partial exemption of 50 % with respect to the amount or period of exemption shall also be
granted.
c.) Conditional exemption of one (1) year from effectivity of this Wage Order may likewise be
granted. The conditional exemption shall be confirmed, as follows:
c.1 For Corporations
When deficit as of the last full accounting period amounts to 20 % or more of the paid-up
capital for the same period;
c.2 For Single Proprietorships and Partnerships
When net loss for the last two (2) full accounting periods immediately preceding the
effectivity of the Order amounts to 20 % or more of the total invested capital at the
beginning of the period under review.
c.3 For Non-Stock, Non-Profit Organizations
When net loss for the last two accounting periods immediately preceding the effectivity of
Order amounts to 20 % or more of fund balance/members contribution at the beginning of
the period.
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Section 7. Adoption of Productivity Programs. Establishments granted exemption are required to
adopt productivity improvement initiatives or schemes to improve business viability. The Board shall
provide technical assistance in the development of a productivity improvement program in the
establishment.
Section 8. Action on Application for Exemption. Upon receipt of an application with complete
documents, the Board shall take following steps:
a. Notify the DOLE Regional Office having jurisdiction over the workplace of the pendency of the
application requesting that action on any complaint for non-compliance with the Order be deferred
pending resolution of the application of the Board.
b. Request DOLE Regional Office to conduct ocular inspection, if necessary, of establishments
applying for exemption to verify number of workers, nature of business and other relevant
information
c. Act and decide on the application for exemption with complete documents, as much as
practicable, within 45 days from the date of filing. In case of contested application, the Board may
conduct conciliation or call hearings thereon.
d. Transmit the decision of the Board to the applicant establishment, the workers or president of the
union, if any, and the Commission, for their information and the DOLE Regional Office concerned,
for their implementation/enforcement.
The Board may create a Special Committee with one representative from each sector to expedite
the processing of applications for exemption.
Section 9. Application for Projects/Branches/Divisions. Where the exemption being sought is for
a particular project/branch/division not separately registered and licensed, the consolidated audited
financial statements of the establishment shall be used as basis for determining its distressed condition.
Section 10. Distressed Principal. Exemption granted to a distressed principal shall not extend to its
contractor in case of contract (s) for construction, security, janitorial and/or similar services with respect to
the employees of the latter assigned to the former.
Section 11. Effect of Disapproved Application for Exemption. In the event that the application for
exemption is not approved, covered workers shall be paid the mandated wage increase/allowance as
provided for under the Order retroactive to the date of effectivity of the Order plus simple interest of one
percent (1%) per month.
Section 12. Filing of Motion for Reconsideration. The aggrieved party may filed with the Board a
motion for reconsideration of the decision on the application for exemption within ten (10) days from receipt
and shall state the particular grounds upon which the motion is based, copy furnished the other party and
the Department.
No second motion for reconsideration shall be entertained in any case. The decision of the Board shall be
final and executory unless appealed to the Commission.

Section 13. Appeal to the Commission. Any party aggrieved by the decision of the Board may file
an appeal with the Commission through the Board within ten (10) calendar days receipt of
decision. The appeal shall be accompanied by a memorandum of appeal which shall state the grounds
relied upon and the arguments in support of the appeal.

Section 14. Grounds for Appeal. An appeal may be filed on the following grounds:

a. Non-conformity with the prescribed guidelines and/or procedures on exemption;
b. Prima facie evidence of grave abuse of discretion on the part of the Board; or
c. Questions of law.

Section 15. Opposition. The appellee may file with the Board his reply or opposition to the appeal
within ten (10) days from receipt of the appeal. Failure of the appellee to file his reply or opposition shall be
construed as waiver on his part to file the same.
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Section 16. Transmittal of Records. Within five (5) days upon receipt of the reply or opposition of
the appellee or after the expiration of period to file the same, the entire records of the case which shall be
consecutively numbered, shall be transmitted by the Board to the Commission.

Rule IV - Special Provisions

Section 1. Effect on Existing Wage Structure. Should any dispute arise as a result of wage
distortion, the employer and the union shall negotiate to correct the distortions through the grievance
procedure under their collective bargaining agreement, and if it remains unresolved, through voluntary
arbitration. Unless otherwise agreed by the parties in writing, the voluntary arbitrator shall decide such
dispute or panel of voluntary arbitrators within ten (10) calendar days from the time said dispute shall have
been referred to voluntary arbitration.

In cases where there are no collective bargaining agreements or recognized labor unions, the
employers and workers shall endeavor to correct such distortions. Any dispute arising therefrom shall be
settled through the National Conciliation and Mediation Board and if it remains unresolved after ten (10)
calendar days of conciliation, the same shall be referred to the appropriate branch of the National Labor
Relations Commission (NLRC). The NLRC shall conduct continuous hearings and decide the dispute within
twenty (20) calendar days from the time said dispute is submitted for compulsory arbitration.

The pendency of a dispute arising from wage distortion shall not in any way delay the applicability of
any increase prescribed in the Order.

Section 2. Complaints for Non-Compliance. Complaints for non-compliance with the Order shall
be filed with the Regional Office of the Department having jurisdiction over the workplace and shall be the
subject of enforcement proceedings under Articles 128 and 129 of the Labor Code, as amended.

Section 3. Conduct of Inspection by the Department. The Department shall conduct inspections
of establishments, as often as necessary, to determine whether the workers are paid the prescribed wage
rates and other benefits granted by law or any Wage Order.

In the conduct of inspection in unionized companies, Department inspectors shall always be
accompanied by the president or other responsible officer of the recognized bargaining unit or of any
interested union. In the case of non-unionized establishments, a worker representing the workers in the
said company will accompany the inspector.

The workers representative shall have the right to submit his own findings to the Department and to
testify on the same if he does not concur with the findings of the labor inspector.

Section 4. Non-diminution of Benefits. Nothing in the Order and in this Rule shall be construed to
reduce any existing wage rates, allowances and benefits of any form under existing laws, decrees,
issuances, executive orders, and/or under any contract or agreement between the workers and the
employers.

Section 5. Productivity-Based Wages. In order to sustain rising level of wages and enhance
competitiveness, business are strongly encouraged to adopt productivity improvement schemes, such as
time and motion studies, good housekeeping, quality circles, labor management cooperation, as well as
implement gain sharing programs;

Section 6. Implementation of Two-Tiered Wage System. On voluntary basis and upon effectivity of
this Order, employers who recognize and value the contribution of their workers may provide productivity
and incentives based pay to them based on indicators such as business performance, labor productivity,
work behavior, competitiveness of establishments among others. The Board shall issue an advisory on the
range of productivity incentives which may be applied by establishments;

Section 7. Penal Provision. Any entity that refuses or fails to pay any of the prescribed increases or
adjustments in the wage rates made in accordance with this Order shall be punished in accordance with
the provisions of Sec. 12, Art 127 of RA 6727 as amended by RA 8188, which provides as follows:
Sec. 12. Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to
pay any of the prescribed increases or adjustments in the wage rates made in accordance with this Act shall be
punished by a fine not less than Twenty-five thousand pesos (P25.000) nor more than One hundred thousand
pesos (P100.000) or imprisonment of not less than two (2) years nor more than four (4) years or both such fine
and imprisonment at the discretion of the court: Provided, that any person convicted under this Act shall not be
entitled to the benefits provided for under the Probation Law.
12
The employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits
owing to the employees: Provided. That payment of indemnity shall not absolve the employer from the criminal
liability imposable under this Act.
If the violation is committed by a corporation, trust or firm, partnership, association or any other entity,
the penalty of imprisonment shall be imposed upon the entity's responsible officers including but not limited to the
president, vice president, chief executive officer, general manager, managing director or partner.

Section 8. Prohibition Against Injunction. No preliminary or permanent injunction or temporary
restraining order may be issued by any court, tribunal or other entity against any proceedings before the
Commission or Boards.

Section 9. Freedom to Bargain. The Order shall not be construed to prevent workers in particular
firms or enterprises of industries from bargaining for higher wages and flexible working arrangements with
their respective employers.

Section 10. Reporting Requirements. Any person, company, corporation, partnership or any entity
engaged in business shall submit a verified itemized listing of their labor component to the Board not later
than January 31, 2015 and every year thereafter in accordance with the form prescribed by the
Commission.

Section 11. Repealing Clause. All orders, issuances, rules and regulations on wages, or parts
thereof inconsistent with the provisions of the Wage Order and this Rules are hereby repealed, amended or
modified accordingly.

Section 12. Separability Clause. If any provision or part of the Order and this Rule, or the
application thereof to any person or circumstance is held invalid or unconstitutional, the remainder of the
Order and this Rules or the application of such provision or part thereof to other persons or circumstances
shall not be affected thereby.

Section 13. Effectivity of Rules. This rule shall take effect on March 21, 2014.

Cebu City, Philippines, February 14, 2014.


(sgd) ATTY. HIDELITO S. PASCUAL

(sgd) ATTY. ERNESTO F. CARREON
Member, Employer Sector Member, Labor Sector





(sgd) PHILIP N. TAN (sgd) JOSE P. TOMONGHA
Member, Employer Sector Member, Labor Sector





(sgd) EFREN B. CARREON (sgd)ASTERIA C. CABERTE
Vice Chairperson Vice Chairperson



(sgd) CHONA M. MANTILLA
Chairperson


Approved this 14
th
day of March 2014



(sgd)ROSALINDA DIMAPILIS- BALDOZ
Secretary, Department of Labor and Employment
Chairman, National Wages and Productivity Commission