Starting December 1, 2014, all private sector minimum wage workers in Region XI will be entitled to Cost of Living Allowance (COLA) of Five Pesos (Php5.00) per Wage Order No. RB-XI-18.  This will raise the minimum wage in the non-agricultural and retail and service establishments employing more than ten (10) workers to Php317.00 per day.  The new daily minimum wage for the agriculture sector is Php307.00 and Php286.00 for retail/service establishments employing not more than ten (10) workers.  The Wage Order covers Davao City, Digos, Island Garden City of Samal, Tagum, Panabo, Mati and the Provinces of Davao del Sur, Davao del Norte, Davao Oriental, and Compostela Valley.

Cost of Living Allowance (COLA) is given to workers for loss in purchasing power due to inflation at a rate normally pegged at the consumer price index (CPI) and cushion the effects of the rapid price increase of basic commodities.

While COLA is part of the minimum wage, it is excluded from the computation of wage-related benefits such as overtime pay, night shift differential and 13th month pay. However, COLA will be included in computing mandatory contributions to the Social Security System (SSS), PhilHealth, and Pag-Ibig.

Through regional wage orders, the COLA may be integrated in the basic minimum wage. When the new wage order took effect on June 1, 2014, the amount of the wage-related benefits enjoyed by the workers also increased since the increment in the basic minimum wage in the amount of Php11.00 already subsumed the COLA.

All workers and employees in the private sector receiving the minimum wage in Davao Region, are entitled to receive the new COLA of Php 5.00 for the second trance of the new wage order to coincide with the holiday season. However, domestic workers covered by Batas Kasambahay (R.A. 10361), family drivers, persons employed in the personal service of another, and workers of establishments registered under the Barangay Micro Business Enterprises (BMBE) Law are not covered.

No exemption from compliance under this Wage Order is allowed except those automatically exempted by law.

RTWPB – XI