This document discusses wage and salary administration policies. It provides three key points: 1. Wage and salary administration aims to establish a fair compensation structure and achieve objectives for both employees and employers such as ensuring employees are paid according to their job requirements and controlling labor costs. 2. Various types of wages are discussed including nominal wages, real wages, living wages, and minimum wages. Factors that influence compensation systems are also outlined. 3. Philippine labor laws regarding compensation are summarized, including requirements for payment frequency and methods, wage deductions, and holiday and hours of work policies. The right to a living wage is also established under the country's constitution.

2. It was grace that brought us together.
People who are uniquely different yet
are able to work cooperatively with respect and reverence
toward each other.
It was also grace that binds us as one,
accepting and understanding each other,
assuring each and everyone
that we are developing lifelong friendships.
Lord, we pray that with the same grace, we will be blessed with
persistence and perseverance as we trudge our way
towards the path of righteousness.
Bless us with more love, compassion, and kind-heartedness.
These we pray in your mighty name.
Amen.

4. Wage Payment Plans
and
Salary Policies
and
Administration
Prepared by:
Mary Leigh Ann C. Perez

5. Compensation
Refers to every type of reward
that individuals receive in
return for performing
organizational tasks.

6. Financial
of, relating to,
or involving
finance,
finances, or
financiers
Non-Financial
not
involving
financial
matters
Compensation

7. Financial
Direct
•Wages
•Salaries
•Commissions
•Bonuses
Indirect
•Insurance
Plans
•Social
Assistance
Benefits
•Paid
Absences

8. Indirect
Insurance Plans: Life, Health, Surgical,
Dental, Casualty among others.
Social Assistance Benefits: Retirement
Plans, Social Security, Worker’s
Compensation, Educational Assistance,
Employee Services among others.
Paid Absences: Vacations, Holidays, Sick
Leave among others.

9. Non-Financial
The Job
•Interesting Duties
•Challenging
•Opportunity for
Recognition
•Feeling of
Achievement
•Advancement
•Opportunities
•Etc.
Job Environment
•Sound Policies
•Competent
Supervision
•Congenial to
Workers
•Appropriate Status
Symbol
•Comfortable
Working Conditions
•Etc.

10. Nature and Purpose of
Wage and Salary Administration
• The basic purpose of wage and salary
administration is to establish and maintain an
equitable wage and salary structure.
• The wage and salary administration is
concerned with financial aspects of needs,
motivation and rewards.
• Managers analyze and interpret the needs of
their employees so that rewards can be
decided to satisfy those needs. The reward
may be money or promotion , recognition,
acceptance, etc.

11. A sound wage and salary administration
tries to achieve these objectives:

12. for Employees:
1. employees are paid according to
requirements of the job.ie highly skilled jobs
are paid more compensation than low
skilled jobs. This eliminates inequalities.
2. the chances of favoritism (while fixing wage
rates) are greatly eliminated
3. job sequences and lines of promotion are
established wherever applicable.
4. employees morale and motivation are
increased because a wage program can be
explained and is based on facts.

13. to Employers:
1. They can systematically plan and control labor
costs.
2. In dealing with trade union, they can explain the
basis of their wage program because it is based
upon a systematic analysis of job and wage facts.
3. A wage and salary administration reduces the
likelihood of friction and grievances on job
inequalities.
4. It enhances an employee’s morale and motivation
because adequate and fairly administered wages
are basic to his wants and needs.
5. It attracts qualified employees by ensuring adequate
payment for all the jobs.

14. Wage and Salary administration have
four major purposes (Beach):
1. To recruit persons for a firm;
2. To control payroll costs;
3. To satisfy people, to reduce the
incidence of quitting grievances,
and fractions over pay; and
4. To motivate people to perform
better.

15. TYPES OF WAGES

16. 1. NOMINAL WAGES . It is the amount paid to
the worker in cash for the efforts of the worker
towards production and no other benefits are
given to the worker. This is called money wage.
2. REAL WAGES . It represents the amount of
necessaries, comforts, luxuries and cash payment
a worker gets in return for his efforts. Some
organizations provide their employees certain
essential commodities, housing with free electric
and water charges, uniforms and other such
facilities in addition to the money in cash. If these
amounts are considered for wages, it becomes the
real wage.

17. 3. LIVING WAGE . When the wage rates are such
that they are going to fulfill some of the
requirements of a family like food, cloths,
education and insurance against misfortune along
with other basic necessities, they are referred to
as living wage.
4. FAIR WAGE. It is a wage which is to be
considered as a fair amount of return for the
efforts of the employees and should be able to
cover the other necessities of food, cloths and
shelter for his family. The rate for the fair wage
lies between real wage and minimum wage.

18. 5. MINIMUM WAGE . Minimum wage may be
defined as the wage, which not only provides for
basic subsistence but something more than this.
It should be able to keep the employees
motivated and it should provide for some
measure of education, medical facilities and
other essential requirements. It should also
consider the cost of living.

19. Main objectives of minimum wages and
salaries are:
• To protect the sections of working
population whose wages are very low.
• To prevent exploitation of the workers.
• To improve the general standard of life.
• Satisfactory compensation towards efforts
expended by the worker.

20. FACTORS INFLUENCING WAGE
and
SALARY SYSTEM

21. 1. The organization’s ability to pay
2. Supply and demand of labor
3. The prevailing market rate
4. Living wage
5. Productivity
6. Trade union’s bargaining power
7. Job requirement
8. Managerial attitude

22. 9. Psychological and social factors
(Psychologically-persons perceive
the level of wages as a measure of
success in life, people may feel
secure.
Sociologically and ethically workers
should feel that they are not
exploited and that no distinction is
made on the basis of caste, color,
sex or religion.)
10. Skill level available in the market

23. The Giving Tree

24. Salary Policies
and
Administration

25. Article VIII: Social Justice and Human Rights
Sec. 3: Labor. The State shall afford full protection
to labor…and promote full employment and
equality of employment opportunities for all.
…They shall b entitled to security of tenure,
humane conditions of work, and a living wage…

26. Right to Living Wage
A worker has a right to receive a fair and just compensation
for his work. He is entitled to equal remuneration for
work of equal value (Art. IX, B-Sec. 5)
A man works to make a living to support himself and his
family. His wage or income must be sufficient to enable
him and his family to live in reasonable and frugal
comfort, provide education for their children, make some
savings to meet unexpected contingencies, and
eventually acquire something a man can call his own.

27. Forms of Payment
• No employer shall pay the wages of an
employee by means of promissory notes,
vouchers, tokens, tickets, chits or any other legal
tender, even when expressly requested by the
employee.
• Payment of wages by bank checks or money
orders is allowed where such manner of wage
payment is customary on the date of the
effectively of the Labor Code, where it is
stipulated in a collective bargaining agreement.

28. Time of Payment
• Wages shall be paid at least once every two weeks
or twice a month, at intervals not exceeding sixteen
(16) days.
Direct Payment of Wages
• Wages shall be paid directly to the workers to whom
they are due.
Place of Payment
• As a general rule, the place of payment shall be
at/or near the place of undertaking.
No employer shall make payment with less frequency
than once a month.
(Art. 103, Labor Code of the Philippines)

29. Regulations Regarding Wages. Specifically intended to
protect workers from possible exploitation by their
employers, the Labor Code of the Philippines has
promulgated certain regulations with respect to wages.
They are the following:
1. Non-Interference in Disposal of Wages. No
employer shall limit or otherwise interfere with the
freedom of any employee to dispose of his wages.
He shall not in any manner force, compel, or oblige
his employees to purchase merchandise,
commodities, or other property from the employer
of from other person or otherwise make use of any
store or services of such employer or any other
person.

30. B. Wage Deduction
No employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages
of his employees, except:
In cases where the worker is insured with his
consent by the employer, and the deduction is to
recompense the employer for the amount paid by
him as premium on the insurance.
In cases where the right of the worker or his union to
check off has been recognized by the employer or
authorized in writing by the individual concerned;
and
In cases where the employer is authorized by law or
regulations by the Secretary of Labor and
Employment.

31. C. Deposits for Loss or Damage
Where the employer is engaged in trade,
occupation or business where the practice of
making deductions or requiring deposits id
recognized, to answer for the reimbursement
of loss or damage to tools, materials, or
equipment supplied by the employer to the
employee, the employer may make the wage
deductions or require the employee to make
deposits from which deductions shall be
made, subject to the following:

32. • The employee concerned is clearly shown to
be responsible for the loss or damage;
• The employee is given reasonable
opportunity to show cause why deduction
should not be made;
• That the amount of such deductions is fair
and reasonable and shall not exceed the
actual loss or damage; and
• That the deduction from the wages of the
employees does not exceed 20% of the
employee’s wages in a week.
(Sec. 14, Rule VII, Rules and Regulations
Implementing the Labor Code)

33. Withholding of Wages
Likewise, it is unlawful for any person, directly or
indirectly, to withhold any amount from the wages
of a worker or induce him to give up any part of his
wages by force, stealth, intimidation, threat or
dismissal or by any other means whatsoever
without the worker’s consent.
It is likewise unlawful to make any deduction from
the wages of any employee for the benefit of the
employer or his representative or intermediary as
consideration of a promise of employment or
retention in employment.
Moreover, it is unlawful for any employer to refuse to
pay or to reduce the wages, discharge or in any
manner discriminate against any employee who
has filed any complaint or instituted any
proceeding against the former.

34. Hours and Working Conditions
Henry Ford initiated the eight-hour day in his
company in 1914 and the five-day week in 1926.
Hours of Work in the Philippines
In the Philippines, Commonwealth Act No. 444
approved on June 3, 1939, provided the legal
working day not to exceed eight hours daily in
any industry or occupation, whether public or
private, with the exception of farm workers,
laborers who prefer to be paid on piece work
basis, domestic servants in the personal service of
another and members of the family of the
employer working for him.

35. Under the Labor Code of the Philippines
which took effect on November 1, 1974,
the normal hours of work of any employee
shall not exceed eight in a day.
Hours worked shall include:
All time during which an employee is required
to be on duty or to be at a prescribed
workplace, and
All time during which an employee is suffered
or permitted to work.
Rest periods of short duration during working
hours shall be counted as hours worked.

36. Determining Hours Worked. In determining
whether the time spent by an employee is
considered hours worked, the following
general principles shall apply:
1. All hours are hours worked which the
employee is required to give to his employer,
regardless of whether or not such hours are
spent in productive labor or involve physical
or mental exertion;
2. All employees need not leave the premises
of the workplace in order that his rest period
shall not be counted, it being enough that he
stops working, may rest completely, and may
leave his workplace, to go elsewhere,
whether within or outside the premises of his
workplace;

37. 3. If the work performed was necessary, or if it
benefited the employer, or the employee
could not abandon his work at the end of his
normal working hours because he had no
replacement, all time spent for such work
shall be considered as hours worked, if the
work was with the knowledge of his employer
or immediate supervisor.
4. The time during which an employee is
inactive by reason of interruptions in his work
beyond his control shall be considered
working tie either if the imminence of the
resumption of work requires the employee’s
presence at the place of work or if the interval
is too brief to be utilized effectively and
gainfully in the employee’s own interest.

38. Waiting Time. Waiting time spent by an
employee shall be considered as working
time under the following conditions:
• If waiting forms an integral part of the
employee’s work or the employee is required
or engaged by the employer to wait.
• When an employee is required to remain on
call in the employer’s premises or so close
thereto that he cannot use the time effectively
and gainfully for his own purposes.
• However, an employee who is merely
required to remain in the employer’s
premises but is merely required to leave word
at his home or with company officials where
he may be reached is not working while on
call.

39. Paid Legal Holidays. The rules implementing
Presidential Decree No. 850 have clarified
the policy in the implementation of the ten
paid legal holidays.
Before PD No 850, the number of working days
in a firm was considered important in
determining entitlement to the benefit. Thus,
where an employee was working for at least
313 days, he was considered already
definitely paid. If he was working for less
than 313 days, there was no certainty
whether the ten paid legal holidays were
already paid to him or not.
•

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