MINIMUM WAGE EARNERS DO NOT LOSE MWE STATUS EVEN IF GIVEN OTHER BENEFITS
The Supreme Court, in the case of Soriano vs. Secretary of Finance (G.R. No. 184450, January 24, 2017) resolved the query as to whether Sections 1 and 3 of RR 10-2008 are consistent with the law in declaring that a Minimum Wage Earner (MWE) who receives other benefits in excess of the statutory limit of P30,000 is no longer entitled to the exemption provided by R.A. 9504, is consistent with the law.
The impact of MWEs not being exempted is that they will be taxed on all income received such as salaries and benefits. Further, the employer cannot charge as deduction from gross income the amount paid to them.
The Court held that to be exempt, one must be an MWE, a term that is clearly defined. Section 22(HH) of the Tax Code says he/she must be one who is paid the statutory minimum wage if he/she works in the private sector, or not more than the statutory minimum wage in the non-agricultural sector where he/she is assigned, if he/she is a government employee. Thus, one is either an MWE or he/she is not. Simply put, MWE is the status acquired upon passing the litmus test -whether one receives wages not exceeding the prescribed minimum wage.
T
he treatment of bonuses and other benefits that an employee receives from the employer in excess of the P30,000 ceiling cannot but be the same as the prevailing treatment prior to R.A. 9504 -anything in excess of P30,000 is taxable; no more, no less. The treatment of this excess cannot operate to disenfranchise the MWE from enjoying the exemption explicitly granted by R.A. 9504.
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