Are Employees Still Covered by NCR Minimum Wage After Company Relocates? (Philippines)

Executive Summary

Minimum wage in the Philippines is regional. Rates are set per region by the Regional Tripartite Wages and Productivity Boards (RTWPBs).
Which rate applies? As a rule, the applicable minimum wage is the one where the employee actually performs work (the regular worksite), not where the company is incorporated or where the head office is.
Relocation effects:
- If a company moves operations out of NCR and employees move with the job (their regular worksite becomes the new region), the new region’s minimum wage governs—but the employer cannot lawfully cut pay unilaterally if the employee’s current rate is higher (risk of illegal diminution/constructive dismissal).
- If employees continue working in NCR (e.g., assigned to an NCR site or regularly report there), NCR rates still apply—even if payroll or corporate registration moves elsewhere.
- Hybrid/remote arrangements require careful analysis: the default is the region where the employee regularly performs work, alongside the Telecommuting Act’s “no less favorable treatment” rule.

Legal Architecture (Philippine Context)

1) Who sets the minimum wage?

RTWPBs issue Wage Orders by region.
Wage Orders specify the basic wage (and sometimes COLA) and any coverage/exemptions.

2) Territorial application

Minimum wage applies by the geographic area where the establishment or assignment is located and where the employee regularly works.
For companies with multiple establishments, the rate follows the establishment (or project) where the employee is regularly assigned.

3) “Regular worksite” vs. incidental work

Temporary details (e.g., short trainings, brief project stints in another region) do not usually change the applicable regional rate.
Regular or indefinite reassignment (the employee’s base of operations changes) will shift the applicable regional minimum to the new region.

4) Telecommuting and off-site work

The Telecommuting Act (RA 11165) guarantees parity of treatment between telecommuters and on-site peers.
For minimum wage, regulators and case practice look to the place where work is actually performed on a regular basis.
If an NCR-based employer allows full-time remote work from, say, Laguna (Region IV-A), the Region IV-A rate is typically the statutory floor for that specific worker.
However, if the company chooses to pay NCR rates to remote staff as a policy or by CBA/contract, that higher rate becomes the binding rate (and cannot be cut arbitrarily).

What Happens When a Company Relocates?

Scenario A: Entire operation moves from NCR to another region; employees transfer

Minimum wage floor: New region’s minimum wage.
Existing pay above the new floor:
- Employers may not unilaterally reduce an employee’s fixed salary to match the lower regional minimum.
- Cutting pay without written consent (and without valid management prerogative grounds consistent with law) risks illegal diminution, constructive dismissal, or breach of contract/CBA.
CBAs and individual contracts can lock in higher-than-minimum rates; these generally survive relocation unless renegotiated in accordance with law.

Scenario B: Head office moves out of NCR but employees keep working in NCR

NCR rates still apply to those employees whose regular work remains in NCR.

Scenario C: Only some functions move; employees are offered transfer

If an employee accepts transfer and the regular worksite changes, the new region’s minimum is the floor; no unilateral salary cuts.
If an employee declines a bona fide transfer and the NCR post is abolished, separation may occur under authorized causes (e.g., closure/cessation of operations of the NCR unit), with statutory separation pay where applicable.

Scenario D: Remote/hybrid after relocation

Identify the regular locus of work:
- Mostly at home outside NCR → that region’s minimum applies (floor).
- Mostly on-site in NCR (e.g., mandated office days in NCR) → NCR minimum likely applies.
Maintain parity with similarly situated employees performing the same work.

Can Employers Lower Pay After Relocation?

1) Minimum wage is a floor, not a ceiling

You may not pay below the applicable regional minimum after relocation.
But paying above the minimum is allowed—and commonly becomes a vested term.

2) Non-diminution of benefits / unilateral pay cuts

A unilateral reduction of established salary, wage-related allowances, or consistently granted benefits risks violating non-diminution principles and can amount to constructive dismissal.
Any reduction generally requires employee consent, lawful and reasonable basis, and must not be discriminatory or in bad faith.

3) Wage distortion

If wage adjustments (e.g., to align with the new regional minimum or to maintain parity) compress pay gaps between grades, address wage distortion through CBA grievance/machinery or conciliation, preserving meaningful differentials.

Special Employment Set-ups

Project- or site-based (e.g., construction)

The applicable minimum wage is typically the region of the project site where the employee is regularly assigned, with site allowances sometimes provided by policy/CBA.

Contractors and principals

If a contractor deploys workers to the principal’s NCR site, NCR minimum generally applies.
Principal’s solidary liability can arise if the contractor underpays.

Probationary, seasonal, and apprentices

Coverage depends on Wage Order terms; some categories may have lawful exclusions or different treatment—always check the current Wage Order for the region.

Practical Compliance Steps for Employers

Map where work is performed—per employee or role (on-site, remote, hybrid).
Identify the controlling Wage Order for the actual worksite/assignment.
Compare current pay vs. new regional floor; do not cut established pay without lawful basis and consent.
Review contracts and CBAs for wage clauses, mobility/transfer, and parity commitments.
Plan wage structures to avoid wage distortion when aligning rates post-relocation.
Document transfers as bona fide (no demotion/diminution; reasonable distance/expenses considered).
Communicate changes transparently; offer transition support (e.g., relocation assistance, cost-of-living adjustments).
Audit contractors for compliance at the new site to avoid solidary liability.
Keep proofs of compliance (payroll, timekeeping, postings, notices).
Monitor new Wage Orders in both NCR and the destination region for future adjustments.

Practical Compliance Steps for Employees

Confirm your regular worksite in writing (assignment memo, WFH agreement).
Check the region’s current minimum for your new or actual work location.
Watch for unlawful pay cuts; ask HR for the legal basis and lodge concerns promptly.
Preserve evidence of consistent benefits and rates (for non-diminution claims).
Consult your union/HR on wage distortion and parity if pay gaps narrow after adjustments.

FAQs

Q: Our company moved the head office to Cavite, but I still report to the NCR branch weekly. Which minimum wage applies? A: If your regular assignment remains in NCR (e.g., you regularly report or are primarily assigned there), NCR minimum applies.

Q: I accepted transfer to a Laguna site with a lower regional minimum. Can HR lower my salary to match? A: They may peg future hires at the Laguna minimum, but your existing salary cannot be unilaterally reduced absent your informed consent and a lawful basis—else risk of unlawful diminution/constructive dismissal.

Q: I am 100% remote from Pampanga for an NCR employer. A: The Pampanga (Region III) minimum is the relevant statutory floor for you, but your actual pay may be (and often remains) above that floor. The company must treat you no less favorably than comparable on-site employees.

Q: Our pay gaps compressed after changing to the new region’s structure. Is that legal? A: Wage distortion must be addressed via CBA mechanisms or conciliation to restore reasonable differentials between pay grades.

Q: The NCR unit shut down; I declined transfer. What now? A: If the NCR closure is bona fide, you may be entitled to separation pay under authorized causes, subject to statutory rules.

Key Takeaways

Follow the worksite. The region where the employee regularly works determines the minimum wage floor.
No unilateral cuts. Relocation isn’t a license to reduce pay of existing employees who move—consent and legal basis are required.
Document and communicate. Clear assignment memos, WFH agreements, and wage structure policies minimize disputes.
Mind CBAs and parity. Contractual commitments can lock in higher pay than the regional minimum; respect them after relocation.

Model Clause (for policies/letters)

Worksite-Linked Minimum Wage. “For statutory compliance, the Company applies the regional minimum wage corresponding to each employee’s regular worksite or project assignment. Nothing in this policy authorizes unilateral reductions of established salaries or benefits. Any change in assignment or work arrangement (on-site/remote/hybrid) shall be documented, and any compensation adjustments shall comply with law, collective agreements, and the non-diminution principle.”

This article provides general information on Philippine minimum wage application when operations relocate. For specific cases, review the latest Wage Orders for NCR and the destination region and seek advice tailored to your contracts/CBA and facts.