TITLE II. WAGES

CHAPTER 1. PRELIMINARY MATTERS

Art. 97. DEFINITIONAs used in this Title:

a) Persons – an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons.

b) Employer – any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the Government and all its branches, subdivision and instrumentalities, all government-owned or –controlled corporations and institutions, as well as non-profit private institutions, or organizations.

c) Employee – any individual employed by an employer.

d) Agriculture – farming in all its branches and among, other things, includes the cultivation and tillage of soil, dairying, the production, cultivation, growing and harvesting of any agricultural and horticultural commodities, the raising of livestock or poultry, and any practices performed by a farmer on a farm as an incident to or in conjunction with such farming operations, but DOES NOT INCLUDE the manufacturing or processing of sugar, coconuts, abaca, tobacco, pineapples or other farm products.

e) Employ – to suffer or permit to work.f) Wage – paid to any employee shall mean the

remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or entertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Sec of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. “Fair and reasonable value” shall not include any profit to the employer or to any person affiliated with the employer.

‘WAGE’ AND ‘SALARY’ DEFINED Wage

1. Compensation for manual labor, skill or unskilled, paid at times, and measured by day, week, month, or season

2. Inconsiderable pay for lower and less responsible character of employment

Salary1. Denotes a higher degree of employment, or a

superior grade of services, and implies a position or office

2. Suggestive of a larger and more permanent or fixed compensation for more important service

The SC, however, concluded that both terms are synonymous

‘Wage’ includes Sales Commissions Even if the commissions were in the form of

incentives or encouragement, so that the salesman would be inspired to put a little more industry on the jobs particularly assigned to them, still the commissions are directed remunerations for services rendered w/c contributed to the increase of the income of the employer. (Songco et al v NLRC)

Commission is the recompense compensation or reward of an agent, salesman, and of other similar employee or worker, when the same is calculated as a percentage on the amount of his transactions or on the profit to the principal. (supra)

Wage includes Facilities or Commodities Wage includes the fair and reasonable value of

board, lodging, or other facilities customarily furnished by the employer to the employee

It means that an employer may provide, basic necessities (e.g., food and lodging) to his employees but he may deduct their values

‘FACILITIES’ DISTINGUISHED FROM ‘SUPPLEMENTS’ Facilities

1. Articles or services for the benefit of the employee or his family but shall not include tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employee’s business

2. Deductible3. Benefit or privilege is part of the labor’s basic

wages Supplements

1. Constitute extra remuneration or special privilege or benefits given to or received by laborers over and above their ordinary earnings or wages

2. Not deductible Rule: The criterion is not much with the kind of the

benefit or item given, but its purpose.

Requirement for Deducting Value of Facilities1. Proof must be shown that such facilities are

customarily furnished by the trade;2. Provision of deductible facilities must be voluntarily

accepted in writing by the employee; and3. Facilities must be charged at fair and reasonable

valueNOTE: A benefit or privilege granted to an employee for the convenience of the employer is not a facility.

NOTES ON 1