Press Release
April 29, 2007

Recto : 1 in 5 firms violate wage law

One in every five firms in the country does not comply with the minimum wage law, prompting Sen. Ralph Recto to call for more inspections and less red tape for firms who are legally exempted from paying the floor wage but find the process daunting.

Recto said of the 19,539 firms visited by Department of Labor and Employment inspectors in 2005, 15,879, or 81 percent, were found to be complying with wage laws.

Of those in violation of compensation rules, most were remedied on-the- spot, highlighting the effectiveness of labor inspections, Recto said.

Two-thirds of firms found shortchanging their workers in 2004 made on-the-spot corrections, he pointed out.

Recto said mandatory minimum wages must be advocated on the ground and campaigned on the field.

Whats the use of minimum wage law if, like traffic laws, it is violated with impunity? Recto said in stressing the equal importance of setting the minimum wage and seeing to it that it is being followed.

Actual evasion rate could be higher, Recto believes, if Labor officials were able to inspect small firms belonging to the so-called underground economy.

Recto said employers cannot arbitrarily deny their workers their rightful pay even if they may qualify for exemptions under various laws.

He explained that companies that find it difficult to maintain their operations - and pay the minimum wage - can apply for exemption from government-issued wage orders.

That is the correct procedure as an employer is entitled to relief but it is not right for him to function as one-man government wage board, he pointed out.

Minimum wages vary by region, with the highest currently at P350 a day for a non-agriculture worker in the National Capital Region.

Even if there is 100 percent compliance with wage orders, it still wont mean that everyone is getting his or her just wage, he said.

Half of the countrys employed are deemed wage and salary workers, he said. The other half are own-account and unpaid family workers who are not covered by the minimum wage law.

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