Minimum Wage Exemption Under the BMBE Law
Post-lockdown scenarios on account of the COVID-19 pandemic present us the return to hyper business activities. In turn, demand for work can be on the rise.
For years, most Regional Tripartite Wages and Productivity Boards (RTWPBs) did not issue minimum wage orders most likely to tide the effects of COVID-19 on businesses. With the re-opened economy, employees are up and about marching in throngs during office hours.
The concern on increase in minimum wages is becoming a trend. In fact, some RTWPBs have already increased the minimum wages in certain areas within their respective jurisdictions.
When minimum wages are issued, it covers almost all employers and establishments, subject to very few exceptions. The exemptions to full compliance usually apply only to those with less than 10 employees, or so.
However, those micro business entities that have the proper registration are exempted from compliance with the minimum wage. Under Section 8 of R.A. 9178, the Barangay Micro Business Enterprises (BMBEs) shall be exempt from the coverage of the Minimum Wage Law. Provided, that all employees covered under said law shall be entitled to the same benefits given to any regular employee such as social security and healthcare benefits.
The IRR on the BMBE law was promulgated by the Department of Trade and Industry (DTI) under
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Department Administrative Order (DAO) No. 01. The exemption in the IRR echoes Section 8 of R.A. 9178 stating that the BMBEs shall be exempt from the coverage of the Minimum Wage Law.
Hence, it is clear that once the proper certification is possessed by a BMBE entity, it can be exempted from compliance with the minimum wage.
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