SC: Boss should pay minimum despite money problems

The principal reason why a legislated wage increase is considered valid is that it prevents the exploitation of defenseless workers who are situated in an unequal position against their employers in terms of bargaining power. By setting the minimum below which the law considers illegal, the workers are assured of decent living subsistence without need for them to bargain for the same.

In addition to this, the 1987 Constitution itself recognizes the right of workers to a living wage. Therefore, there is enough legal basis for Congress to pass a law that sets a minimum wage that employers are obliged to give their employees.

The employer cannot hope to validate his non-compliance with the legislated minimum wage by contending that he has liquidity problem or is suffering from financial reverses or business losses. Whatever problem he may have in the operation of his business cannot certainly affect his obligation to pay the minimum wage rate fixed by law.

In short, if he cannot pay them the minimum wage required by law or by wage order, the employer should not hire workers. This is especially true if the work has already been performed by workers since that would be unjust enrichment on the part of the employer and a form of exploitation that the law abhors.

Thus, in Mayon Hotel & Restaurant v. Adana, the Supreme Court ruled that petitioner's repeated invocation of serious business losses is NOT a defense to payment of labor standard benefits. The employer cannot exempt himself from liability to pay minimum wages because of poor financial condition of the company. The payment of minimum wages is not dependent on the employer's ability to pay. (G.R. No. 157634, May 16, 2005. 497 Phil. 892)

It must be noted that acceptance by the employee of wage below the minimum set by law does not preclude him from suing for the deficiency. The principle of estoppel or laches does not apply in this situation.