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Philippines lawmaker proposes profit sharing instead of pay hike for worker
Publication Date : 13-07-2014
Instead of a wage hike for workers, how about mandatory profit-sharing?
A lawmaker has proposed that all companies institutionalise profit-sharing with their rank-and-file, “so the economic improvement will trickle down to daily wage earners.”
Buhay party-list representative Lito Atienza said his proposal would require profitable firms to give a share of their earnings to their employees, rather than raise wages.
Under House Bill No. 4445, or the proposed Profit Sharing Act of 2014, business establishments that make a profit for the year shall distribute 10 per cent of their net income to all their employees, both regular and contractual.
The profit-share shall not affect the regular salary, 13th-month pay and other benefits enjoyed by the employees and will also be taxable.
The bill is pending in the committee on labour and employment chaired by Davao City representative Karlo Alexei Nograles.
The bill defines profit sharing as “various incentive plans introduced by business that provide direct payments to employees which depend on the company’s profitability, in addition to salaries and bonuses.”
“The proposal seeks to help our countrymen benefit from the economic improvement by making sure it trickles down to our daily wage earners. It might have more far-reaching effects on labourers and workers, and would encourage them to work harder for the successful operation of their companies,” Atienza said.
He said it was high time that minimum wage earners benefited from the improving economy, as seen from such indicators as the recent credit upgrade by Standard & Poor’s.
Atienza noted that while the credit rating upgrade was a welcome development for the country’s overall economic growth, “poverty still prevails among a majority of Filipinos who have yet to feel the effects of this improvement in their everyday lives.”