Monday, March 24, 2014

Rules for exemption from paying minimum wage (Part 2)


Dear PAO,
I am planning to start a small business but I am not sure if I could afford to pay the minimum wage to my employees. Is it possible to be exempted from the payment of minimum wage? If so, what are the requirements?
Jess

Dear Jess,

As discussed in yesterday’s article, Republic Act (RA) No. 6727 or the Wage Rationalization Act itself provides for exemption from compliance with the minimum wage. But aside from the exemptions provided by the said law, there is an additional exemption found in RA No. 9178, otherwise known as the Barangay Micro Business Enterprises (BMBE) Act of 2002.

Under the BMBE Law, a barangay micro business enterprise (BMBE) is granted, among others, exemption from the coverage of the Minimum Wage Law provided the employees are granted the same benefits given to any regular employee such as social security and healthcare benefits.

A BMBE refers to any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated shall not be more than Three Million Pesos (P3,000,000.00). The “service” of business entity mentioned excludes those rendered by any one, who is a duly licensed government professional after having passed a government licensure examination, in connection with the exercise of one’s profession (Section 3(a), RA No. 9178).

To be considered a BMBE, one must register with the Office of the Treasurer of the appropriate city or municipality and secure a Certificate of Authority (Section 4, RA No. 9178). The applicant shall submit the duly filled out application form in triplicate, signed by the owner or manager of the entity (Section 5, DTI DAO No. 1, s. 2003). Any person, natural or juridical, or cooperative, or association, having the mentioned qualifications may apply for registration as BMBE (Section 5, RA No. 9178).

The Certificate of Authority will grant the entity the right to operate as a BMBE and to enjoy the benefits and privileges granted by the law to a BMBE (Section 3 (b), RA No. 9178). It will be effective for a period of two (2) years, renewable for a period of two (2) years for every renewal.

In addition to exemption from the minimum wage law, a BMBE is also entitled to exemption from tax for income arising from the operations of the enterprise (Section 7, RA No. 9178). A BMBE may likewise avail of the special credit windows which the law mandates the Land Bank of the Philippines (LBP), the Development Bank of the Philippines (DBP), the Small Business Guarantee and Finance Corporation (SBGFC), and the People’s Credit and Finance Corporation (PCFC), Government Service Insurance System (GSIS) and Social Security System (SSS) to set up to service the financing needs of BMBEs (Section 9, RA No. 9178).

If your planned business satisfies the conditions for registration as a BMBE, we recommend that you file an application with the appropriate city or municipal treasurer’s office to avail of the exemption from compliance with the Minimum Wage Law, as well as the other benefits and privileges accorded to a BMBE that are all aimed to encourage the growth and development of small businesses.

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts that you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

Saturday, March 1, 2014

Holidays not deducted from paternity leave benefits

Dear PAO,

How do we compute paternity leave when it falls on a holiday? Does the seven-day paternity leave includes holiday/special holiday/Sunday or do we have to count only the regular working days?

Ms. Joy

Dear Ms. Joy,
Paternity leave is a privilege given to a male employee enabling him to earn compensation even if he does not report for work in cases where his legal wife with whom he is cohabiting gives birth to a child or suffers miscarriage. This benefit is granted under Republic Act (R.A.) No. 8187 or the Paternity Leave Act of 1996. Section 2 thereof provides:

“SECTION 2. Notwithstanding any law, rules  and regulations to the contrary, every married male employee in the private and public sectors shall  be entitled to a paternity leave of seven (7) days  with full pay for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting. The male employee applying for paternity leave  shall notify his employer of the pregnancy of  his legitimate spouse and the expected date of   such delivery.”

As defined, paternity leave refers to the benefits granted to a married male employee allowing him not to report for work for seven (7) days  but continues to earn the compensation therefor, on the condition that his spouse has delivered a child or suffered a miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly-born child (Section 3, Republic Act No. 8187).

Based on the above definition, it can be easily deduced that paternity leave may be used only during  those days that the male employee is supposed to be reporting for work but due to the condition or situation of his wife and/or newborn child, he is excused from reporting for work for seven (7) days. Since during holidays or those days that are declared non-working days he is not required to report for work, it fol–lows that the same shall not be deducted from his paternity leave benefits if he did not report for work on those days.

Again, we find it necessary  to mention that this opinion is solely based on the  facts you have narrated  and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to guide you with our opinion on the matter.

Editor’s note: Dear PAO is a   daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

source:  Manila Times