Implementing agency:

National Wages and Productivity Commission

Two-Tiered Wage System is designed to more effectively protect the poor and vulnerable workers and enable enterprises to improve productivity and gain-sharing. The mandatory floor wage (1st tier) serve as a social protection – set to be slightly higher than the poverty threshold to ensure basic needs of workers and their families, but not too close, or exceed average wage to provide space for bipartite approach in setting better terms and conditions of employment.

The voluntary productivity-based pay scheme (2nd tier) encourages workers and enterprises to engage in productivity improvement and gains haring schemes tightening the link between pay and performance. The voluntary productivity-based pay is implemented through the issuance of industry specific advisories containing an assessment of past industry performance and outlook, as well as recommendations on the range of productivity-based incentives. It emphasizes the need for workers and management to be involved in the development and implementation of productivity improvement programs.