NWPC clarifies rule on wage hike exemption
THE regional wage boards are not vested with the power to grant mass exemption to micro, small, and medium enterprises (MSMES) from the minimum wage limit, according to the National Wages and Productivity Commission (NWPC).
However, it noted that Regional Tripartite Wages and Productivity Boards (RTWPB) could grant such exemption on a case-to-case basis.
In an online news conference on Monday, NWPC Executive Director Maria Criselda R. Sy explained there are stringent requirements before a company will be granted an exemption.
She said they may avail of the provision of Republic Act 9178 or the Barangay Micro Business Enterprise (BMBE) Act, which exempts qualified establishments from minimum wage payment.
“These [BMBE] are the establishments, which applied for a certificate of authority from DTI [Department of Trade and Industry] and have a capitalization of not more than P3 million,” Sy said.
The RTWPBS, she said, could also grant exemption for minimum wage payments to MSMES in the retail or service sector employing not more than 10 workers and are affected by natural calamities, including the Covid-19 pandemic.
“So the exemption will not be automatic. On the basis of the documents they will submit, the regional wage boards will decide whether to grant the exemption or not,” Sy said.
“It [application] should be filed not later than 75 days from the date of publication of the wage order,” she added.
Mechanisms in place
NWPC issued the clarification amid the call from Presidential Adviser for Entrepreneurship Secretary Jose “Joey” A. Concepcion to exempt MSMES from the daily minimum wage increase of P33 in the National Capital Region (NCR) and by P55 and P110 in Region 6.
Concepcion said the new round of wage hike could translate to the closure of more establishments.
Sy allayed the concern, reiterating there are existing mechanisms for distressed companies could avail to be exempted from minimum wage hike.
She noted that in the National Capital Region and Region 6, there are already 4,650 and 1,075 registered BMBES, respectively.
The NWPC also noted that of the 79 applications before the RTWPBS for wage order exemption as of April 2022, the Boards approved 77, and two were dismissed.
Furthermore, Sy said, RTWPBS consider the business impact of their wage orders, which minimizes the risk it may lead to mass closure of establishments.
“We think the impact [of wage increases] at the macro level, if there is any, is not that big and will negatively affect our macro economic goals,” Sy said.