In the Philippine legal landscape, the protection of a worker's right to a living wage is not merely a statutory preference but a constitutional mandate. The Labor Code of the Philippines, as amended by Republic Act No. 6727 (The Wage Rationalization Act), provides the framework for setting and enforcing minimum wages. When employers fail to comply with these standards, they face a rigorous set of penalties ranging from financial restitution to criminal prosecution.

1. Statutory Basis for Penalties

The primary teeth of the minimum wage law are found in Section 12 of RA 6727, as further strengthened by Republic Act No. 8188. Under these laws, any person, corporation, trust, firm, partnership, association, or entity that refuses or fails to pay any of the prescribed increases or adjustments in the wage rates is subject to specific sanctions.

Double Indemnity Rule

The most significant financial deterrent is the Double Indemnity provision. Under RA 8188, an employer found to have underpaid their employees is required to pay an amount equal to double the unpaid benefits owing to the employees.

Note: This payment is not a fine paid to the government, but rather a form of liquidated damages paid directly to the affected workers to compensate them for the delayed enjoyment of their wages.

2. Criminal Liability and Imprisonment

Non-compliance is treated as a criminal offense. The law imposes the following penalties upon conviction:

Fines: A fine of not less than ₱25,000.00 and not more than ₱100,000.00.
Imprisonment: A prison term of not less than two (2) years and not more than four (4) years.

It is important to note that the payment of the prescribed back wages and the "double indemnity" does not extinguish the criminal liability of the employer.

3. Corporate and Personal Liability

When the violation is committed by a juridical entity (like a corporation), the law pierces the corporate veil to hold specific individuals accountable. The following persons can be held personally liable for the criminal penalty of imprisonment:

The President
The Chief Executive Officer
The General Manager
The Managing Partner
Any other officer directly responsible for the management of the business.

4. Administrative Sanctions

Beyond the judiciary, the Department of Labor and Employment (DOLE) exercises its visitorial and enforcement powers under Article 128 of the Labor Code.

Compliance Orders: DOLE can issue a writ of execution to garnishee the employer’s bank accounts or levy their property to satisfy the underpaid wages.
Closure Orders: In cases of egregious or repeated violations that pose an imminent danger to the health and safety of workers, or in cases of continued defiance of compliance orders, DOLE may order the temporary or permanent cessation of operations.
Blacklisting: Non-compliant contractors or businesses may be blacklisted from participating in government biddings and public works contracts.

5. Procedural Recourse for Workers

Workers who are victims of wage violations generally have two avenues for redress:

The DOLE Regional Office: For money claims arising from an employer-employee relationship where the claimant is still employed, or if the claim (per employee) does not exceed ₱5,000.00 (under Article 129).
The National Labor Relations Commission (NLRC): For claims exceeding ₱5,000.00 or those accompanied by a claim for reinstatement (illegal dismissal).

6. Exceptions and Exemptions

While the law is strict, it provides for specific exemptions from the minimum wage rates (but not from the penalties of violating those exemptions). Barangay Micro Business Enterprises (BMBEs) and certain distressed establishments may apply for a waiver with the Regional Tripartite Wages and Productivity Board (RTWPB). However, failure to secure an official exemption means the standard minimum wage applies, and all aforementioned penalties remain in full force.