The Philippines has joined its progressive neighbors in the implementation of the two-tiered wage system with the effectivity of the Regional Tripartite Wage and Productivity Board-Region IV-A’s wage order, according to Department of Labor and Employment Secretary Rosalinda Baldoz.
“The Philippines is definitely in transition to a two-tiered wage system which offers better protection to minimum wage earners,” Baldoz said.
Baldoz was referring to Wage Order No. 15 of the RTWPB IV-A, the first regional wage order that provides for a wage increase under the two-tiered wage system.
She said a productivity-based wage system is central to Republic Act No. 6727, or the Wage Rationalization Act, adding that even Barangay Micro Business Enterprises (BMBEs) will benefit from the two-tiered system.
The two-tiered wage system consists of a fixed “floor wage” or entry-level wage for new entrants and low-skilled workers, and a flexible wage above the floor based on worker productivity and industry or enterprise performance which may be negotiated between the employer and the workers.
The ground-breaking wage reform seeks to upgrade and modernize the existing minimum wage setting in the country.