Salary Standardization Law Of 2015 Proposed Adjustments In Salaries And .

Salary Standardization Law of 2015Proposed Adjustments inSalaries and Benefits for thePublic Sector1

Study on Compensation and Benefitsin the Public Sector, FY 2015The review of the Public Sector Compensation and Benefits ismandated by Joint Resolution No. 4 (June 17,2009), which statesthat “a periodic review of the government’s Compensationand Position Classification System shall be conducted everythree (3) years” (i.e., 3 years after 2012, or 2015)To determine:The competitiveness of government pay in relation to the privatesector; and,The compensation strategy to bring government pay closer tomarket rates.2

SSL 3 Salary IncreasePer Congress Joint Resolution No. 4, s.(July 1, 2009-June 1, 2012)3

Highlights of Competitiveness Review: SSL 3 is Below MarketSSL Salary Grade (SG)1,800,000Market BenchmarkGuaranteed PayRegressedMarket Total etBenchmarkTotalGuaranteed PayActualMarketTotalGuaranteed (Median)(Median)1,400,000SSLMidpointsSSL3 MidpointPhp per month1,200,000 At lower SGs, SSL3 is already close to market. At higher SGs, SSL3 falls far below market. The salary progression in market follows anexponential rate of increase, unlike in SSL3which follows a linear progression.1,000,000800,000The SSL 3 Midpoint is the exact middle point betweenStep 1 and Step 8 of each salary grade.600,000400,000200,000-123456789 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33SSL Grade4

Highlights of Competitive Review: SSL 3 is 45% Below MarketJob CategorySub-Professional(SGs 1 to 10)Professional(SGs 11 to 24)Middle Manager(SGs 25 to 28)Executive(SGs 29 to 33)Sample Positions Utility WorkerDriverMessengerClerkAdministrative Assistant EconomistAgriculturistAccountantEngineerLawyer Director IDirector IVExecutive Director Assistant SecretaryUndersecretarySecretarySenatorVice - PresidentPresidentMarket Position ofGovernment Pay126% to 79%of market76% to 41%of market39% to 34%of market32% to 22%of market5

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SSL 3 vs. Market for Nurses(Basic Monthly Salary)(147%)(184%)(159%)7

SSL 3 vs. Market for Teachers(Basic Monthly Salary)(146%)(157%)(169%)(97%)8

Guiding Principles for SSL 2015 Payment of just and equitable compensation togovernment personnel in accordance with theprinciple of equal pay for work of equal value; Comparability of civilian government pay withthose in the private sector; Rationalized and standardized compensationacross all government agencies; and Adoption of a performance-based incentivescheme9

Compensation Adjustment StrategyParameters:The minimum basic salary (SG 1) shall be raised from P9,000 toP11,068 a month.To attract and retain talent, the compensation of governmentpersonnel shall be at least 70% of the market for all salary grades.To recognize differences in duties and responsibilities, there shallbe no salary overlaps.The link between pay and performance shall be strengthened,especially for those in the higher salary grades.The structure of the adjustment should temper the cost ofbenefits (i.e. GSIS premiums and PhilHealth contributions) andallow for higher take home pay, especially for those in the lowersalary grades10

Compensation StrategyBasic SalaryIncrease27% 14th MonthPay(Mid-Year)8% EnhancedPerformanceBased Bonus(PBB)10%The weighted average increase of compensation for all salary grades is 45%.11

Compensation StrategySchedule of Implementation/Annual Cost20182019Enhanced PBB(100%)Enhanced PBB(100%)14th Month Pay14th Month aryIncreaseSalaryIncreaseSalaryIncrease57.906 B54.393 B65.976 B20172016Enhanced PBB(50%)14th Month Pay14th Month Pay(Mid-Year)COST47.544 B 225.819 B12

SSL 3 vs. SSL 2015 vs. Benchmark Market Rates(Annual Cash expressed in equivalent monthly amounts)150%140%SSL 3, Total CashProposed SSL 2015, with salary increase and Mid-Year Bonus130%Proposed SSL 2015, with salary increase, Mid-Year Bonus and new PBB amount120%110%Market Index100%90%80%70%60%50%40%30%20%12345678910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33Salary Grade Total cash includes basic salary, and guaranteed allowances and bonuses, and existing minimum Performance-basedBonus (PBB) SGs 18-31 will reach 70% of regressed market only upon inclusion of new PBB rates13

Share of Increase by CategoryCategorySample PositionsNo. ofAuthorizedPositionsSub-professional(SGs 1-10)Utility Worker IDriver IICarpenterLegal Assistant179,879Professional**(SGs 11-24)Budget Officer IIAttorney IEconomist IIIDivision ChiefMiddle Managers(SGs 25-28)% of Total CostMarketPosition*8,247,008,643.693.65%154% to88% ofmarket949,996139,439,131,453.0061.75%86% to 70%of marketDirector IDirector IIDirector IIIBureau Director31,30117,027,994,416.417.54%70% ofmarketExecutives(SGs 29-33)Assistant 60.163.82%70% ofmarketMilitary andUnformedPersonnelPolice Officer 23%n/a1,527,810225,818,920,194.00100%TOTALTotal Cost(SSL 4)*Weighted average in relation to market is 84%. This will be much higher if the pay of Teachers & Nurses are included inthe computation.**A separate survey was conducted for Teachers and Nurses.14

Proposed SSL 2015 Salary Midpoints versus SSL 3 and MarketPresent (SSL 3)No. ofSalaryAuthorizedGradePositionsSample PositionsProposed (SSL 2015)MarketBenchmarkSSL 3MidpointSSL 3/MarketBenchmark(%)SSL 2015MidpointSSL 2015Midpoint/MarketBenchmark (%)% Share toTotal Cost118,595Utility Worker ,02412012,0841440.11%317,250Clerk I9,47410,77611412,8091350.40%428,541Driver II10,71911,58410813,5781270.66%510,347Carpenter II12,12912,45310314,3921190.25%630,196Lab Technician I13,72313,3879815,2561110.69%711,180Computer Operator I15,52814,3919316,1711040.24%823,486Engineering Asst.17,56915,4708817,303980.57%921,005Electrician Foreman19,87916,6308418,514930.54%1014,688Legal Assistant I22,49217,8787919,810880.39%11426,575Economist I25,45019,2187621,7918615.04%12114,966Accountant I28,79520,6607223,970834.99%159,409Budget andManagement Specialist I32,58122,2096826,368818.16%1416,201Cashier II36,86523,8756529,004790.92%1540,044Budget Officer II41,71125,8786231,905763.83%1633,869Attorney I47,19527,9485935,095742.48%176,072Executive Assistant II53,40030,1845738,605720.52%1315

Proposed SSL 2015 Salary Midpoints versus SSL 3 and MarketProposed (SSL 2015)Present (SSL 3)No. ofSalaryAuthorizedGradePositionsSample PositionsMarketBenchmarkSSL 3MidpointSSL 3/MarketBenchmark(%)SSL 2015MidpointSSL 2015 /MktBenchmark(%)% Share toTotal Cost1855,181Economist III60,42132,5995442,465705.51%1945,841IT Officer I68,36435,2075147,986705.40%2011,973Board Secretary III77,35338,0234954,224701.73%2111,405Attorney III87,52241,0654761,273701.88%2220,450Asst. Division Chief99,02944,3504569,238704.19%238,010Court Attorney II112,04947,8984378,239701.90%2413,366Division Chief126,78051,7304188,410703.87%254,566Director I143,44855,86839100,788701.66%266,494Director II162,30760,33737113,890702.84%274,345Director III183,64665,16935128,696702.24%282,530Bureau ant 397,44093,58224276,500700.57%324Vice t552,917120,00022388,096700.002%1,165,911 (Total Authorized Civilian Positions)Weighted Average: 84%16

SSL 2015 vs. Market for Nurses(Total Guaranteed Compensation PBB)(254%)(281%)(209%)17

SSL 2015 vs. Market for Teachers(Total Guaranteed Compensation PBB)(142%)(256%)(234%)(216%)18

Proposed Monthly Base Pay Schedule for MUPsSample RankDNDDILG (PNP)Candidate SoldierPrivatePolice Officer IPrivate First ClassCorporalPolice Officer IISergeantStaff SergeantPolice Officer IIITechnical SergeantMaster SergeantSr. Police Officer ISenior Master SergeantSr. Police Officer IISr.Chief Master SergeantPolice Officer IIISr. Police Officer IVFirst Chief Master SergeantCadetCadetProbationary Second LieutenantSecond LieutenantFirst LieutenantInspectorCaptainSenior InspectorMajorChief InspectorLieutenant ColonelSuperintendentColonelSenior SuperintendentBrigadier GeneralChief SuperintendentMajor GeneralDirectorLieutenant GeneralDeputy Director GeneralDirector GeneralGeneralEquivalent rent Base ProposedPayBase Pay[SLIDE FOR EDITING TO REFLECTSFBA’ S SUGGESTIONS; 5571,31380,58391,058102,896116,272131,38919

Proposed Monthly Base Pay andLongevity Pay for MUPsSample RankDNDDILG (PNP)Candidate SoldierPrivatePolice Officer IPrivate First ClassCorporalPolice Officer IISergeantStaff SergeantPolice Officer IIITechnical SergeantSr. Police Officer IMaster SergeantSenior Master SergeantSr. Police Officer IISr. Police Officer IIIChief Master SergeantFirst Chief Master SergeantSr. Police Officer IVCadetCadetProbationary Second LieutenantSecond LieutenantFirst LieutenantInspectorCaptainSenior InspectorMajorChief InspectorLieutenant ColonelSuperintendentColonelSenior SuperintendentBrigadier GeneralChief SuperintendentMajor GeneralDirectorLieutenant GeneralDeputy Director GeneralDirector GeneralGeneralEquivalentSGBase dIncreaseAverageAverage(Proposed Longevity Total Base Pay Longevity TotalCurrent)PayPay- 11,26512,764- 12,7641,4991,483 16,31716,5971,660 18,2571,9391,595 17,54718,3511,835 20,1862,6393,556 20,49019,9334,186 24,1193,6295,856 23,60021,3727,053 28,4254,8258,661 27,32622,89810,625 33,5236,1979,354 29,51325,18911,688 36,8777,36410,886 32,65727,70713,854 41,5618,90411,757 35,27030,47715,239 45,71610,44612,697 38,09133,95216,976 50,92812,83713,713 41,13838,36619,183 57,54916,412- 27,42538,366- 38,36610,94113,713 41,13838,36619,183 57,54916,4122,995 32,94043,8294,383 48,21215,2723,234 35,57549,5284,953 54,48118,9067,416 42,72856,58211,882 68,46425,73712,313 49,62662,55520,643 83,19833,57218,537 58,83571,31332,804 104,11745,28221,761 65,28280,58340,292 120,87555,59323,501 70,50391,05845,529 136,58766,08425,382 76,145 102,89651,448 154,34478,20029,605 88,815 116,27258,136 174,40885,59333,750 101,250 131,38965,695 197,08495,83420

Civilian vs. MUP: Proposed Total Compensation Components of CompensationCivilianDNDDILGRankTeacher I/SG-11/aPrivate/bPolice Officer I/bBasic SalaryBasic Salary/ Base 4,0005,0002,4002,4005,0005,0005,000Mid-year Bonus21,03816,59716,597Year-end Bonus21,03816,59716,597-54,00054,000Allowances and BenefitsLongevity PayPERAUniform/Clothing AllowanceCash Gift Specific-Purpose AllowanceSubsistence AllowanceHazard 0IncentivesPEINew PBBTotal Annual Compensation/a/bAt Step 2With at least five (5) years in service to be entitled to 10% longevity pay21

Tax Implication on CompensationUnder RA 10653, gross benefits, such as 13th month payand other benefits not exceeding P82,000 shall be taxexempt. Thus, the majority* of employees will enjoy ahigher take-home pay as a result of adjustments underSSL 2015. In effect, for SGs 1-11 employees who number 606,454 or 52% of allauthorized civilian positions and who are only receiving the existingtax-exempt 13th month pay, cash gift and PEI, the full mid-yearbonus and the full PBB shall also be exempt from tax. For SGs 12-16 employees, who number 364,489 or 31% of allauthorized civilian positions and who are only receiving the existingtax-exempt 13th month pay, cash gift and PEI, the full mid-yearbonus shall also be exempt from tax.22

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Applicability to Certain Officials1987 Philippine ConstitutionSection 10 of Article VIThe salaries of Senators and Members of the House of Representatives shallbe determined by law. No increase in said compensation shall takeeffect until after the expiration of the full term of all the Members ofthe Senate and the House of Representatives approving such increase.Section 6 of Article VII of the ConstitutionThe President shall have an official residence. The salaries of the Presidentand Vice-President shall be determined by law and shall not be decreasedduring their tenure. No increase in said compensation shall take effectuntil after the expiration of the term of the incumbent during whichsuch increase was approved. They shall not receive during their tenureany other emolument from the Government or any other source.SSL 2015For members of the Cabinet, compensation adjustment shall take effectonly on July 1, 2016.24

Salary Standardization Law of 2015Proposed Adjustments inSalaries and Benefits for thePublic Sector25

Proposed SSL 2015 Salary Midpoints versus SSL 3 and Market Present (SSL 3) SSL 2015 Midpoint SSL 2015 Midpoint/Market Benchmark (%) 11,400 154 12,084 144 12,809 135 13,578 127 . SSL 2015 vs. Market for Nurses (Total Guaranteed Compensation PBB) 17 (254%) (281%) (209%) SSL 2015 vs. Market for Teachers (Total Guaranteed Compensation PBB) 18 .