1. Governing Legal Framework

Source	Key Provisions (relevant excerpts)
1987 Constitution, Art. XIII, §3	State duty to afford full protection to labor, including a living wage.
Labor Code of the Philippines (Pres. Decree No. 442, as amended)	Book III (Conditions of Employment) • Art. 83 – Hours of Work • Art. 87 – Overtime Work • Art. 99–121 – Wages, wage distortion, exemptions, enforcement
Republic Act No. 6727 (Wage Rationalization Act, 1989)	Creates Regional Tripartite Wages & Productivity Boards (RTWPBs) to issue Wage Orders fixing statutory minimum wage per region/sector.
RA 8188 (1996)	Stiffer penalties for minimum-wage violations: PHP 25 000-100 000 fine and 2-4 years’ imprisonment plus double indemnity (unpaid wages × 2).
Implementing Rules Book III (DOLE)	Defines exclusions (managerial employees, field personnel, family members, etc.) and details computations.
DOLE Department Orders & Advisories	e.g., D.O. 147-15 (flexible work arrangements), D.O. 183-17 (expanded labor inspection), pandemic-era advisories on wage deferment.
Key Supreme Court cases	Auto Bus v. Bautista (G.R. No. 156367, 2005) – field personnel test; PNCC v. NLRC (G.R. No. 121195, 1997) – overtime formula; Nakpil v. Gordoncillo (G.R. No. 17306, 2020) – regional wages apply to WFH employees’ workplace, not residence.

2. Statutory Minimum Wage

2.1 Concept

The statutory minimum wage (SMW) is the lowest daily basic wage set for a particular region/industry/sector. It excludes cost-of-living allowances (COLA) unless a Wage Order expressly integrates COLA into basic pay.

2.2 Regional Wage-Setting Machinery

Petition / Motu proprio review by an RTWPB.
Consultations & public hearings.
Wage Order issuance → becomes effective 15 days after publication in a newspaper of general circulation.
Review possible after 12 months or when “supervening conditions” (e.g., extraordinary inflation) exist.

2.3 Coverage & Exemptions

Covered	Exempt (or may seek exemption)
Rank-and-file employees in the private sector paid on daily, monthly, or piece-rate basis	• Barangay micro-business enterprises (BMBEs) (RA 9178) • Establishments with ≤₱ 3 million assets (subject to RTWPB exemption) • Househelpers (separate wage schedule, RA 10361) • Apprentices & learners (75 % of SMW)

2.4 Computation Quick Guide

Worker category	Daily to Monthly factor*	Remarks
6-day workweek	313 days/yr	Daily Wage × 313 ÷ 12
5-day workweek	261 days/yr	Daily Wage × 261 ÷ 12
Piece-rate	Convert to equivalent daily rate (EDR) = Total earnings ÷ Output units × Time	If EDR < SMW → wage underpayment

*Based on latest DOLE Handbook of Stat. Tables; factors vary if firm observes fewer holidays.

2.5 Penalties & Remedies

Administrative – DOLE Compliance Order; closure for grievous repeat violations.
Civil – Double indemnity under RA 8188, interest (6 % p.a.), moral/exemplary damages, attorney’s fees (Art. 2208 NCC).
Criminal – Fine + imprisonment; corporate officers personally liable (Art. 288 LC, as amended).
Prescriptive period – 3 years for money claims (Art. 306).

3. Overtime (OT) Pay

3.1 General Rule (Art. 87)

Work beyond 8 hours/day must be paid an extra premium. The normal workweek is 40–48 hours; anything beyond is overtime.

3.2 Who Is NOT Entitled

Managerial employees – primary duty to manage, policy discretion, at least two subordinates.
Field personnel – unsupervised, output-oriented (tested in Auto Bus).
Government employees, seafarers, family of employer, domestic workers (have separate regs).

3.3 Premium Matrix

Situation	OT Rate Formula
Ordinary day	Hourly rate × 1.25
Rest day / Special non-working holiday	Hourly rate × 1.30
Rest day and OT	Hourly rate × 1.69 (1.30 × 1.30)
Regular holiday	Hourly rate × 2.00
Regular holiday and OT	Hourly rate × 2.60

Night-shift differential (10 pm–6 am): add 10 % to the basic hourly rate before applying OT multipliers (Art. 86).

3.4 Compressed Workweek & Flexible Set-ups

• DOLE allows up to 48 hours/week averaged, provided the total weekly hours and OT premiums are not diminished. • Employer must secure DOLE acknowledgment; otherwise, hours > 8/day may still trigger OT.

3.5 Computation Example

Worker on ₱ 610 daily wage (₱ 610 ÷ 8 = ₱ 76.25/hr) works 2 OT hours on a rest day. OT pay = 2 hrs × ₱ 76.25 × 1.69 = ₱ 257. (Regular pay for the 8-hr rest-day shift = ₱ 610 × 1.30 = ₱ 793.)

3.6 Enforcement & Sanctions

Identical inspection, complaint, and penalty mechanisms as minimum-wage non-compliance. Failure to keep time records is a per se violation and creates a presumption that the employee’s claim is correct (Rule X, Sec. 6).

4. Procedural Enforcement Architecture

Level	Forum	Relief
Inspection	DOLE Regional Office (Labor Law Compliance Officers)	Compliance Order; payment within 10 days; anti-retaliation protection.
Single-Entry Approach (SEnA)	Mandatory 30-day conciliation; if unresolved →
Adjudication	NLRC/Arbiters (money claim ≤ ₱ 5 000 also with DOLE)	Decision enforceable by writ of execution; appeals require supersedeas bond equal to monetary award.
Criminal prosecution	Initiated by DOLE Secretary/Regional Director upon finality of order	Prosecuted before the proper RTC/MTC.

5. Employer Compliance Checklist

Know your Wage Order (region & sector).
Integrate COLA if mandated by latest Wage Order.
Maintain daily time records and payslips for 3 years.
Compute hourly rate correctly (daily ÷ 8; monthly × 12 ÷ 313, etc.).
Secure DOLE clearance for compressed workweeks/flexible arrangements.
Post Wage Order summaries conspicuously.
Budget for double indemnity exposure in audits.
Update contracts: explicitly label bona fide managerial or field positions.
Train payroll staff on rest-day vs holiday distinctions.
Respond to SEnA notices within 5 days to avoid escalation.

6. Current Issues & Trends (2023-2025)

Inflation-driven wage petitions: Every RTWPB issued at least one Wage Order post-COVID, raising daily SMWs by ₱ 30-₱ 50.
Hybrid-/remote-work logistics: The locus for wage-order application is the employer-specified workplace (see Nakpil), but disputes arise when staff live in lower-wage regions.
Gig-economy ambiguity: Platform-based couriers push for inclusion in minimum-wage coverage; a draft “Freelancers Protection Bill” (House Bill 6718) remains pending.
Stronger inspection: DOLE targets 90 % inspection coverage of all firms with ≥ 10 workers by 2026, armed with e-DOLE cards and real-time data capture.
“Wage theft” campaigns: Labor groups use social-media “name-and-shame” to compel back-pay even before formal cases are filed.

7. Practical Take-Aways

Underpayment of even ₱ 1 per day can snowball into six-figure liability once doubled, plus legal interest and fees. The safest course is rigorous, transparent payroll practice and proactive adjustment once a new Wage Order is announced. For overtime, record accuracy outweighs ingenious scheduling: if records are unreliable, courts will resolve doubts in favor of labor.

Need more?

This article condenses the controlling Philippine rules, common pitfalls, and 2025 trends. For nuanced scenarios—e.g., cross-border remote work, profit-sharing in lieu of wage hikes, or collective bargaining carve-outs—consult DOLE issuances or specialized counsel.