FINANCIALLY-STRAPPED private enterprises in Central Visayas have until Nov. 29, 2023 to file applications seeking exemption from the P33 minimum wage hike, which is scheduled to take effect on Oct. 1.
This was confirmed by Lilia Estillore, Regional Tripartite Wages and Productivity Board (RTWPB) 7 chairperson, during a press conference on Monday, Sept. 18.
The wage board had announced on Sept. 5 that a P33 increase in the daily minimum wage was forthcoming through Wage Order ROVII-24.
According to the order, daily minimum wages for non-agricultural establishments categorized from Class A to C will range from P420 to P468.
For smaller enterprises, specifically those with fewer than 10 employees operating in both agricultural and non-agricultural sectors, the revised pay scale will range from P415 to P458.
Businesses throughout the region are expected to conduct a comprehensive assessment of their financial capabilities and workforce requirements to determine their eligibility for exemption from the wage hike.
In Cebu, business leaders said they will abide by the new wage order, but warned against several negative impacts such as job cuts and inflationary pressures, among others.
“No plans to appeal. It went through the process and we abide by the results,” Cebu Chamber of Commerce and Industry president Charles Kenneth Co told SunStar Cebu in a text message on Monday.
Kelie Ko, president of the Mandaue Chamber of Commerce and Industry, shared his sentiment.
“While we understand the need to increase minimum wages, it has short-term benefits but long-term costs,” Ko said.
He explained that increasing the daily minimum wage can stimulate consumer spending and the local economy, however, this can lead to job cuts and inflation.
It will also be challenging for businesses that have been affected by different changes in the global landscape, he said.
“This latest increase has implications on increase in benefits, 13th month pay, and other government required benefits,” he said.
Evita Mendoza-Balane, wage board secretary, outlined the criteria to qualify for the exemption, saying the guidelines align with standard wage orders and the Omnibus Rules on Minimum Wage Determination of the National Wages and Productivity Commission.
Balane said retail and service establishments that maintained fewer than 10 employees for the last six months can qualify. Also eligible are businesses that have been adversely affected by natural disasters or human-induced calamities that occurred within six months prior to the effective date of the wage order.
She said businesses that were affected by the coronavirus pandemic do not qualify.
“We removed those affected by the pandemic because the state of calamity status has been lifted already,” she noted.
During the implementation of the P31 wage increase under Wage Order No. ROVII-23 in 2022, many exemption requests were attributed to challenges stemming from the pandemic, although Balane did not specify the figures.
She added that businesses previously found to be non-compliant with wage orders are not eligible to apply for an exemption.
Balane said that those seeking an exemption have 75 days, or until Nov. 29, to submit their application.
She said the wage board has a 45-day window from the date the application was filed to reach a decision, stressing that incomplete applications will not be considered.
She explained that if an establishment is granted an exemption, it will be relieved from complying with the wage order for one year from the effective date of the increase.
Those denied will be required to pay their employees the mandated wage increase from the date when the wage order takes effect, along with a one percent interest per month. The interest will be retroactively applied to the effective date of the wage increase, she said.
Applicants can file their application at the RTWPB 7 or in any Department of Labor and Employment 7 field office, or file via email at firstname.lastname@example.org or email@example.com.
The recent wage increase is anticipated to provide direct benefits to 346,946 minimum wage earners in Central Visayas, while approximately 399,572 other workers can indirectly benefit from wage distortion adjustments.
This wage hike stems from multiple petitions filed by labor groups earlier this year, citing the rising costs of essential goods and commodities. (KJF, EHP)