DOLE pushes e-payment of wages

MANILA,Philippines — To ensure workers are properly paid by their employers, the Department of Labor and Employment (DOLE) is mounting a campaign to encourage e-payment of wages.

Labor Undersecretary Claro Arellano said DOLE is partnering with the Bangko Sentral ng Pilipinas (BSP) in promoting financial inclusion of workers through the electronic payment of wages and benefits. 

Arellano said the initiative is part of the country’s commitment to pursue a state wherein there is effective access to a wide range of financial products by all. 

Based on the 2017 Global Findex Report, Arellano said, only 6.6 percent of the country’s private sector wage earners receive their salaries through a formal account or e-money account held in a supervised financial institution. 

“A low financial inclusion among the wage earners may be a source of abuse against the workers and violations of labor laws as there can be difficulty in verifying and validating the payment of correct wages and other mandatory benefits,” Arellano pointed out.

Thus, he said, the DOLE is pushing for electronic payment of salaries through formal accounts. 

He said companies should already do away with manual cash disbursements and instead open formal accounts for payment of wages to enable easier verification and validation. 

There is still no law or regulation requiring e-payment of wages, but Arellano said it has many advantages.

He said electronic payment of salaries would not only cut the transaction, administration, and overhead costs, but would also reduce the incidence of leakages during disbursements. 

A formal account, Arellano said, also translates to easy access to financial products, including savings, credit, insurance, and investment. 

Among the sectors identified by the Financial Inclusion Steering Committee to immediately benefit from the electronic payment of wages are the construction workers, bus drivers and conductors, as well as kasambahay, factory workers, and workers in the retail and service industries.