If you are a business owner or employer in CALABARZON, you should be aware of the recent wage order issued by the Regional Tripartite Wages and Productivity Board IV-A (RTWPB-IVA). Wage Order No. IVA-20, which took effect on September 24, 2023, grants a minimum wage increase ranging from P35 to P50 for workers in private establishments in the region.
In this blog post, we will explain the details of Wage Order No. IVA-20, its coverage and exemptions, and how it affects your business operations and payroll compliance. We will also share some tips on how to manage your payroll effectively and efficiently with Account It Right, an online accounting services company that specializes in payroll processing and compliance.
What is Wage Order No. IVA-20?
Wage Order No. IVA-20 is the latest wage order issued by the RTWPB-IVA, which is the body authorized by law to determine and fix the minimum wage rates applicable in Region IV-A (CALABARZON). Cavite, Laguna, Batangas, Rizal, and Quezon are the provinces that make up the region.
According to the wage order, the minimum wage rates in Region IV-A are adjusted as follows:
- For non-agriculture workers, the minimum wage ranges from P385 to P520, depending on the classification of the city or municipality where they work.
- For agriculture workers, the minimum wage ranges from P385 to P479, depending on the classification of the city or municipality where they work.
- For workers in retail and service establishments employing not more than 10 workers, the minimum wage is P385.
The wage order also provides for a cost-of-living allowance (COLA) of P10 per day for all workers covered by the wage order.
The wage order covers all workers and employees in the private sector in Region IV-A, regardless of their position, designation, or status of employment, and irrespective of the method by which their wages are paid. However, there are some exemptions from the applicability of the wage order, such as:
- Household or domestic helpers
- Persons employed in the personal service of another
- Workers of properly registered Barangay Micro Business Enterprises (BMBEs)
- Workers of distressed establishments
- Workers of new business enterprises
- Workers of establishments adversely affected by natural calamities
- Workers of establishments that have closed or ceased operations
The exemptions are subject to certain conditions and requirements, as specified in the wage order.
How does Wage Order No. IVA-20 affect your business?
As a business owner or employer in CALABARZON, you should comply with Wage Order No. IVA-20 and pay your workers the prescribed minimum wage rates. Failure to do so may result in penalties such as fines, imprisonment, or both.
Complying with Wage Order No. IVA-20 may also have some implications for your business operations, such as:
- Increased labor costs: The minimum wage increase may affect your labor budget and cash flow, especially if you have a large number of workers or if you operate in areas with higher wage rates. You may need to adjust your pricing strategy, reduce your expenses, or increase your productivity to cope with the increased labor costs.
- Increased tax liabilities: The minimum wage increase may also affect your tax liabilities, such as income tax, withholding tax, value-added tax (VAT), and expanded withholding tax (EWT). You may need to update your tax computations and remittances to reflect the new wage rates.
- Increased compliance requirements: The minimum wage increase may also affect your compliance requirements with various government agencies, such as the Bureau of Internal Revenue (BIR), Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), Home Development Mutual Fund (HDMF or Pag-IBIG), and Department of Labor and Employment (DOLE). You may need to update your payroll records, reports, and contributions to reflect the new wage rates.
How can Account It Right help you with your payroll compliance?
Managing your payroll can be a tedious and time-consuming task, especially with the frequent changes in labor laws and regulations. That’s why you need Account It Right, an online accounting services company that specializes in payroll processing and compliance. Account It Right can help you with your payroll compliance by:
- Computing your payroll accurately and efficiently: Account It Right uses cloud-based payroll software that can handle complex payroll calculations, such as deductions, allowances, overtime pay, holiday pay, night shift differential, 13th-month pay, bonuses, incentives, and more. You can also customize your payroll settings to suit your business needs and preferences.
- Filing and paying your taxes on time: Account It Right can help you file and pay your taxes online, such as income tax, withholding tax, VAT, and EWT. You can also generate and print your tax forms and receipts, such as BIR Form 1601-C, BIR Form 1604-CF, BIR Form 2550M, BIR Form 2551Q, and more.
- Remitting your contributions to government agencies: Account It Right can help you remit your contributions to government agencies, such as SSS, PhilHealth, and Pag-IBIG. You can also generate and print your contribution reports and receipts, such as R-3, R-5, R-8, RF-1, MCRF, and more.
- Complying with labor laws and regulations: Account It Right can help you comply with labor laws and regulations, such as Wage Order No. IVA-20, Labor Code of the Philippines, Occupational Safety and Health Standards (OSHS), and more. You can also generate and print your compliance documents, such as payslips, certificates of employment, contracts of employment, employee handbooks, and more.
With Account It Right, you can save time, money, and effort in managing your payroll. You can also avoid penalties, fines, and lawsuits for non-compliance. You can focus on growing your business while we take care of your financial needs. Contact us today to get a free consultation and quote for any of our services.