It was grace that brought us together.People who are uniquely different yetare able to work cooperatively with respect and reverencetoward each other.It was also grace that binds us as one,accepting and understanding each other,assuring each and everyonethat we are developing lifelong friendships.Lord, we pray that with the same grace, we will be blessed withpersistence and perseverance as we trudge our waytowards the path of righteousness.Bless us with more love, compassion, and kind-heartedness.These we pray in your mighty name.Amen.
Wage Payment PlansandSalary PoliciesandAdministrationPrepared by:Mary Leigh Ann C. Perez
CompensationRefers to every type of rewardthat individuals receive inreturn for performingorganizational tasks.
Nature and Purpose ofWage and Salary Administration• The basic purpose of wage and salaryadministration is to establish and maintain anequitable wage and salary structure.• The wage and salary administration isconcerned with financial aspects of needs,motivation and rewards.• Managers analyze and interpret the needs oftheir employees so that rewards can bedecided to satisfy those needs. The rewardmay be money or promotion , recognition,acceptance, etc.
A sound wage and salary administrationtries to achieve these objectives:
for Employees:1. employees are paid according torequirements of the job.ie highly skilled jobsare paid more compensation than lowskilled jobs. This eliminates inequalities.2. the chances of favoritism (while fixing wagerates) are greatly eliminated3. job sequences and lines of promotion areestablished wherever applicable.4. employees morale and motivation areincreased because a wage program can beexplained and is based on facts.
to Employers:1. They can systematically plan and control laborcosts.2. In dealing with trade union, they can explain thebasis of their wage program because it is basedupon a systematic analysis of job and wage facts.3. A wage and salary administration reduces thelikelihood of friction and grievances on jobinequalities.4. It enhances an employee’s morale and motivationbecause adequate and fairly administered wagesare basic to his wants and needs.5. It attracts qualified employees by ensuring adequatepayment for all the jobs.
Wage and Salary administration havefour major purposes (Beach):1. To recruit persons for a firm;2. To control payroll costs;3. To satisfy people, to reduce theincidence of quitting grievances,and fractions over pay; and4. To motivate people to performbetter.
1. NOMINAL WAGES . It is the amount paid tothe worker in cash for the efforts of the workertowards production and no other benefits aregiven to the worker. This is called money wage.2. REAL WAGES . It represents the amount ofnecessaries, comforts, luxuries and cash paymenta worker gets in return for his efforts. Someorganizations provide their employees certainessential commodities, housing with free electricand water charges, uniforms and other suchfacilities in addition to the money in cash. If theseamounts are considered for wages, it becomes thereal wage.
3. LIVING WAGE . When the wage rates are suchthat they are going to fulfill some of therequirements of a family like food, cloths,education and insurance against misfortune alongwith other basic necessities, they are referred toas living wage.4. FAIR WAGE. It is a wage which is to beconsidered as a fair amount of return for theefforts of the employees and should be able tocover the other necessities of food, cloths andshelter for his family. The rate for the fair wagelies between real wage and minimum wage.
5. MINIMUM WAGE . Minimum wage may bedefined as the wage, which not only provides forbasic subsistence but something more than this.It should be able to keep the employeesmotivated and it should provide for somemeasure of education, medical facilities andother essential requirements. It should alsoconsider the cost of living.
Main objectives of minimum wages andsalaries are:• To protect the sections of workingpopulation whose wages are very low.• To prevent exploitation of the workers.• To improve the general standard of life.• Satisfactory compensation towards effortsexpended by the worker.
1. The organization’s ability to pay2. Supply and demand of labor3. The prevailing market rate4. Living wage5. Productivity6. Trade union’s bargaining power7. Job requirement8. Managerial attitude
9. Psychological and social factors(Psychologically-persons perceivethe level of wages as a measure ofsuccess in life, people may feelsecure.Sociologically and ethically workersshould feel that they are notexploited and that no distinction ismade on the basis of caste, color,sex or religion.)10. Skill level available in the market
Article VIII: Social Justice and Human RightsSec. 3: Labor. The State shall afford full protectionto labor…and promote full employment andequality of employment opportunities for all.…They shall b entitled to security of tenure,humane conditions of work, and a living wage…
Right to Living WageA worker has a right to receive a fair and just compensationfor his work. He is entitled to equal remuneration forwork of equal value (Art. IX, B-Sec. 5)A man works to make a living to support himself and hisfamily. His wage or income must be sufficient to enablehim and his family to live in reasonable and frugalcomfort, provide education for their children, make somesavings to meet unexpected contingencies, andeventually acquire something a man can call his own.
Forms of Payment• No employer shall pay the wages of anemployee by means of promissory notes,vouchers, tokens, tickets, chits or any other legaltender, even when expressly requested by theemployee.• Payment of wages by bank checks or moneyorders is allowed where such manner of wagepayment is customary on the date of theeffectively of the Labor Code, where it isstipulated in a collective bargaining agreement.
Time of Payment• Wages shall be paid at least once every two weeksor twice a month, at intervals not exceeding sixteen(16) days.Direct Payment of Wages• Wages shall be paid directly to the workers to whomthey are due.Place of Payment• As a general rule, the place of payment shall beat/or near the place of undertaking.No employer shall make payment with less frequencythan once a month.(Art. 103, Labor Code of the Philippines)
Regulations Regarding Wages. Specifically intended toprotect workers from possible exploitation by theiremployers, the Labor Code of the Philippines haspromulgated certain regulations with respect to wages.They are the following:1. Non-Interference in Disposal of Wages. Noemployer shall limit or otherwise interfere with thefreedom of any employee to dispose of his wages.He shall not in any manner force, compel, or obligehis employees to purchase merchandise,commodities, or other property from the employerof from other person or otherwise make use of anystore or services of such employer or any otherperson.
B. Wage DeductionNo employer, in his own behalf or in behalf of anyperson, shall make any deduction from the wagesof his employees, except:In cases where the worker is insured with hisconsent by the employer, and the deduction is torecompense the employer for the amount paid byhim as premium on the insurance.In cases where the right of the worker or his union tocheck off has been recognized by the employer orauthorized in writing by the individual concerned;andIn cases where the employer is authorized by law orregulations by the Secretary of Labor andEmployment.
C. Deposits for Loss or DamageWhere the employer is engaged in trade,occupation or business where the practice ofmaking deductions or requiring deposits idrecognized, to answer for the reimbursementof loss or damage to tools, materials, orequipment supplied by the employer to theemployee, the employer may make the wagedeductions or require the employee to makedeposits from which deductions shall bemade, subject to the following:
• The employee concerned is clearly shown tobe responsible for the loss or damage;• The employee is given reasonableopportunity to show cause why deductionshould not be made;• That the amount of such deductions is fairand reasonable and shall not exceed theactual loss or damage; and• That the deduction from the wages of theemployees does not exceed 20% of theemployee’s wages in a week.(Sec. 14, Rule VII, Rules and RegulationsImplementing the Labor Code)
Withholding of WagesLikewise, it is unlawful for any person, directly orindirectly, to withhold any amount from the wagesof a worker or induce him to give up any part of hiswages by force, stealth, intimidation, threat ordismissal or by any other means whatsoeverwithout the worker’s consent.It is likewise unlawful to make any deduction fromthe wages of any employee for the benefit of theemployer or his representative or intermediary asconsideration of a promise of employment orretention in employment.Moreover, it is unlawful for any employer to refuse topay or to reduce the wages, discharge or in anymanner discriminate against any employee whohas filed any complaint or instituted anyproceeding against the former.
Hours and Working ConditionsHenry Ford initiated the eight-hour day in hiscompany in 1914 and the five-day week in 1926.Hours of Work in the PhilippinesIn the Philippines, Commonwealth Act No. 444approved on June 3, 1939, provided the legalworking day not to exceed eight hours daily inany industry or occupation, whether public orprivate, with the exception of farm workers,laborers who prefer to be paid on piece workbasis, domestic servants in the personal service ofanother and members of the family of theemployer working for him.
Under the Labor Code of the Philippineswhich took effect on November 1, 1974,the normal hours of work of any employeeshall not exceed eight in a day.Hours worked shall include:All time during which an employee is requiredto be on duty or to be at a prescribedworkplace, andAll time during which an employee is sufferedor permitted to work.Rest periods of short duration during workinghours shall be counted as hours worked.
Determining Hours Worked. In determiningwhether the time spent by an employee isconsidered hours worked, the followinggeneral principles shall apply:1. All hours are hours worked which theemployee is required to give to his employer,regardless of whether or not such hours arespent in productive labor or involve physicalor mental exertion;2. All employees need not leave the premisesof the workplace in order that his rest periodshall not be counted, it being enough that hestops working, may rest completely, and mayleave his workplace, to go elsewhere,whether within or outside the premises of hisworkplace;
3. If the work performed was necessary, or if itbenefited the employer, or the employeecould not abandon his work at the end of hisnormal working hours because he had noreplacement, all time spent for such workshall be considered as hours worked, if thework was with the knowledge of his employeror immediate supervisor.4. The time during which an employee isinactive by reason of interruptions in his workbeyond his control shall be consideredworking tie either if the imminence of theresumption of work requires the employee’spresence at the place of work or if the intervalis too brief to be utilized effectively andgainfully in the employee’s own interest.
Waiting Time. Waiting time spent by anemployee shall be considered as workingtime under the following conditions:• If waiting forms an integral part of theemployee’s work or the employee is requiredor engaged by the employer to wait.• When an employee is required to remain oncall in the employer’s premises or so closethereto that he cannot use the time effectivelyand gainfully for his own purposes.• However, an employee who is merelyrequired to remain in the employer’spremises but is merely required to leave wordat his home or with company officials wherehe may be reached is not working while oncall.
Paid Legal Holidays. The rules implementingPresidential Decree No. 850 have clarifiedthe policy in the implementation of the tenpaid legal holidays.Before PD No 850, the number of working daysin a firm was considered important indetermining entitlement to the benefit. Thus,where an employee was working for at least313 days, he was considered alreadydefinitely paid. If he was working for lessthan 313 days, there was no certaintywhether the ten paid legal holidays werealready paid to him or not.•