The Minimum Wage Exemption Inside NCR’s ₱85 Wage Hike

What It Means

• The minimum wage exemption written into Wage Order NCR-27 lets employers with 15 or fewer workers, and manufacturers with fewer than 10, apply out of the increase entirely.
• DOLE’s figure of 1.1 million covered workers does not subtract the workers whose employers successfully file for this exemption.
• The ₱85 increase itself lands in two tranches, ₱60 in July 2026 and ₱25 in January 2027, so even covered workers wait six months for the full amount.
• Workers at the smallest, least formalized employers, the segment most likely to already earn below a living wage, are the ones a minimum wage exemption is built to exclude.
• A separate dispute over a ₱210 cumulative wage figure shows the same pattern: numbers that count relief workers have not yet received.

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NCR’s ₱85 minimum wage hike sounds complete on paper. It is not, because a minimum wage exemption written into Wage Order NCR-27 lets some employers skip the increase entirely, and the government’s public numbers do not subtract them from the count.

A Number That Assumes Full Coverage

Labor Secretary Francis Tolentino announced the increase on June 30 at the Malabon Central Market, calling it historic and saying it would benefit 1.1 million minimum wage earners in the National Capital Region. The order raises the daily minimum wage for nonagricultural workers from ₱695 to ₱780, delivered in two tranches. Agricultural workers, and employees at retail, service, and small manufacturing firms covered by the lower tier, move from ₱658 to ₱743.

That 1.1 million figure is the number DOLE leads with, and it assumes universal application. Nothing in the public messaging flags that a minimum wage exemption exists for a defined slice of employers, or that the count was never adjusted downward to reflect it.

The Exemption Clause Nobody Is Arguing About

Wage Order NCR-27 contains a provision that Tolentino himself confirmed: businesses with 15 employees or fewer may apply for exemption from the increase. The same threshold extends to manufacturing establishments with fewer than 10 workers. This is not a hidden footnote. It is a standing feature of how NCR wage orders are built, and it means compliance with the ₱85 increase is conditional, not automatic, for a defined category of employer.

An employer within that threshold does not skip the increase by default. It has to apply for the minimum wage exemption through the wage board, which reviews the application. The practical effect is that workers at businesses small enough to qualify may end up covered by a wage order that never touches their actual paycheck. The 1.1 million figure treats coverage as uniform. The exemption clause guarantees it is not.

Two Waiting Periods Stacked On Each Other

Labor groups have been loud about the staggering. Kilusang Mayo Uno called the ₱85 figure too small and criticized giving it in installments. The Center for Trade Union and Human Rights described the order as historic but insufficient, given how far the increase still sits below a family living wage. Bukluran ng Manggagawang Pilipino went further, framing the staggered rollout as an attempt to blunt pressure for a legislated wage hike moving through Congress.

That criticism is correct as far as it goes, but it treats the July to January gap as the only delay in the system. The minimum wage exemption creates a second one, and it does not have a fixed end date. A firm granted exemption does not owe workers the increase in January 2027 either. For workers at exempted employers, the wait is not six months. It is indefinite, contingent on a future wage order that removes or narrows the clause.

The Coverage Math That Does Not Add Up

The Philippine Chamber of Commerce and Industry has already flagged that many micro, small, and medium enterprises will face cost pressure from the order, with warnings about effects on hiring, expansion, and pricing. That framing focuses on employer strain. It says less about what happens to workers at the firms most likely to seek the minimum wage exemption in the first place, since those are disproportionately the smallest and thinnest margin operations in the capital region.

Workers employed at businesses with 15 or fewer staff are not a marginal population. They sit inside sari sari stores, small retail counters, family run service shops, and micro manufacturing outfits across NCR, the exact tier of employment where informal arrangements and under-the-table pay already run highest. A minimum wage exemption aimed at protecting these employers from cost shock lands hardest on the workers with the least standing to demand compliance regardless of what the order says.

The Gap Feeds a Different Fight

The Federation of Free Workers has separately challenged Malacañang’s use of a ₱210 cumulative wage increase figure, arguing it improperly includes the January 2027 tranche that has not taken effect. That dispute and the minimum wage exemption question point to the same underlying pattern: official figures that count relief before workers receive it, or count workers before their employer’s exemption status is settled.

Labor groups pushing the stalled ₱200 legislated wage hike bill in Congress now have another argument against the regional wage board system. A board that grants an increase, stretches it across two tranches, and builds in an exemption wide enough to exclude the smallest employers is a board that can report full coverage numbers no worker at an exempted firm will ever see. That gap is what keeps the case for scrapping regional boards alive in the next legislative session, regardless of what NCR-27 delivers on paper. Every future wage order that pairs a headline number with a minimum wage exemption clause hands that argument more material to work with.

The next wage order out of NCR, or any regional board, will carry the same choice built into its text: a headline number for announcements, and a minimum wage exemption clause that quietly narrows who actually receives it. Congress already has a bill on the table offering a single national floor with no such carve out, and every order built this way moves that bill closer to a floor vote.

Wage Order NCR-27

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