Exemption from Wage Hike

In view of the increase in the daily minimum wage in NCR, Western Visayas, and Central Luzon, which took effect on June 4, 5, and 20, 2022, respectively, all establishments, in general, must comply with the newly issued Wage Orders.

But did you know that some establishments can apply for one (1) year exemption from compliance with the issued wage order?

Under the Omnibus Rules on Minimum Wage Determination, the following criteria shall be used to determine whether the applicant-establishment is qualified for exemption:

a. For retail/service establishments regularly employing not more than 10 workers:
Exemption may be granted if it is engaged in the retail sale of goods and/or services to end users for personal and household use.

b. For Establishments affected by natural calamities and/or human-induced disasters, including the pandemic:
The establishment must be located in an area covered by a Declaration of State of Calamity issued pursuant to Section 16 of Republic Act No. 10121 or the Philippine Disaster Risk Reduction and Management Act of 2010 and the calamity must have occurred within six (6) months prior to the effectivity of the Wage Order.

Under Section 3 of the said Rules, the following supported documents shall be submitted together with the application:

a. For retail/service establishment regularly employing not more than ten (10) workers:

1. An affidavit of undertaking of the employer stating:
   1. Number of its employees and the duration of their employment;
   2. The fact that it notified its workers of its action to apply for exemption from payment of wage increase;
   3. The fact that it is compliant with the previous Wage Order; and
   4. That in case the application is not granted, the employees shall receive the appropriate increase due them plus interest of one percent (1%) per month retroactive to the effectivity of the Wage Order.
2. Certified true copy of the business permit for the current year.

b.1. For an establishment adversely affected by a calamity:

1. An affidavit of undertaking of the owner, general manager or chief executive officer stating:
   1. Amount of losses/damages suffered.
   2. List of properties damaged/lost together with its estimated valuation.
   3. The fact that it notified its workers of its action to apply for exemption from payment of wage increase;
   4. The fact that it is compliant with the previous Wage Order; and (v) That in case the application is not granted, the employees shall receive the appropriate increase due them plus interest of one percent (1%) per month retroactive to the effectivity of the Wage Order.
2. Pictures of damaged business property, if applicable.

b.2. For an establishment adversely affected by the pandemic:

1. An affidavit of undertaking of the owner, general manager or chief executive officer showing the nature and impact of the pandemic on their business operations.
2. Audited Financial Statements for the last two years stamped received by the Bureau of Internal Revenue.

All applications may be filed thru mail or electronic filing through the official email address of the Regional Tripartite Wages and Productivity Board. The application shall be filed not later than seventy-five (75) days from the date of the publication of the Wage Order. And a full exemption of one (1) year from effectivity of the Wage Order shall be granted to the applicant-establishment.

In cases where the application for exemption has been denied, covered workers shall be paid the mandated wage increase from the date of effectivity of the Wage Order plus interest of one percent (1%) per month.

Reference: 
NWPC Guidelines No. 03 Omnibus Rules on Minimum Wage Determination