Minimum wage; basic wage; wage rates

What is the meaning of "minimum wage"? The minimum wage rates prescribed by law shall be the basic cash wages without deduction therefrom of whatever benefits, supplements or allowances which the employees enjoy free of charge aside from the basic pay. The term "statutory minimum wage" refers simply to the lowest basic wage rate fixed by law that an employer can pay his workers.

The term "regional minimum wage rates" refers to the lowest basic wage rates that an employer can pay his workers, as fixed by the Regional Tripartite Wages and Productivity Boards (RTWPBs) , and which shall not be lower than the applicable statutory minimum wage rates.

The minimum wage rates for agricultural and non-agricultural employees and workers in each and every region of the country shall be those prescribed by the RTWPBs. These wage rates may include wages by industry, province or locality as may be deemed necessary by the RTWPBs.

The term "basic wage" means all the remuneration or earnings paid by an employer to a worker for services rendered on normal working days and hours but does not include cost-of-living allowances, profit-sharing payments, premium payments, 13th month pay or other monetary benefits which are not considered as part of or integrated into the regular salary of the workers.

Further, as held in Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, the following should be excluded from the computation of "basic salary," to wit: payments for sick, vacation and maternity leaves, night differentials, regular holiday pay and premiums for work done on rest days and special holidays. (G.R. No. 145561. June 15, 2005)

The term "wage rates" includes cost-of-living allowances as fixed by the RTWPB, but excludes other wage-related benefits such as overtime pay, bonuses, night shift differential pay, holiday pay, premium pay, 13th month pay, premium pay, leave benefits, among others.