For employers in the National Capital Region (NCR), the 2026 wage increase has taken an unusual and evolving path.
Earlier this year, Wage Order No. NCR-27 granted what was described as a historic ₱85 daily wage increase, structured as a ₱60 increase upon effectivity and an additional ₱25 increase in January 2027. The order would have raised the minimum wage for non-agricultural workers from ₱695 to ₱780 once fully implemented. However, its implementation became subject to legal challenges and court-issued orders that prevented it from taking effect as originally scheduled.
More recently, the NCR Regional Tripartite Wages and Productivity Board issued Wage Order No. NCR-28, granting a one-time ₱60 daily wage increase. Effective September 26, 2026, the minimum wage for covered non-agricultural workers will increase from ₱695 to ₱755.
Immediate compliance requirement is straightforward. The broader implications, however, continue to evolve.
What Employers Need to Do Now
1. Update Payroll and Compensation Records
The ₱60 increase under NCR-28 takes effect on September 26, 2026.
Employers should ensure that payroll systems, salary records, timekeeping processes, and related compensation practices are updated to reflect the new minimum wage upon effectivity. This review should extend beyond employees currently receiving minimum wage, particularly where salary rates are closely aligned to minimum wage thresholds.
2. Review Potential Wage Distortions
Minimum wage adjustments can have implications beyond compliance.
As minimum wage rates increase, entry-level compensation may move closer to the salaries of longer-tenured employees or those occupying higher-level positions. Employers should assess whether existing pay differentials remain appropriate and whether adjustments may be necessary to address potential wage distortions.
While not every wage increase automatically creates distortion issues, organizations should evaluate the impact on their overall compensation structure rather than focusing solely on statutory minimum wage earners.
3. Incorporate Multiple Scenarios Into 2027 Planning
One of the key challenges facing employers is uncertainty.
NCR-27 remains subject to ongoing legal proceedings, and questions remain regarding its ultimate disposition and how it may interact with NCR-28. Employers should therefore avoid assuming that the current ₱755 minimum wage rate represents the final wage landscape entering 2027.
Human Resources, Finance, Payroll, and Legal teams should continue monitoring developments and considering various workforce cost scenarios as part of budget planning.
4. Communicate Clearly With Employees
Many employees may recall the earlier announcement of an ₱85 wage increase and may understandably have questions regarding the current ₱60 increase.
Employers should be prepared to explain that NCR-28 is the wage order currently taking effect, while NCR-27 remains the subject of legal proceedings. Providing clear and consistent communications can help minimize confusion and manage expectations regarding future wage developments.
As developments unfold, employers should continue monitoring updates from the Department of Labor and Employment (DOLE), the National Wages and Productivity Commission (NWPC), the NCR wage board, and the courts.
Several questions remain particularly relevant:
How Will the Courts Ultimately Rule on NCR-27? The legal validity and enforceability of NCR-27 continue to be challenged through ongoing proceedings. Future rulings may help clarify the status of the wage order and its relationship with NCR-28.
What Happens to the Additional ₱25 Increase? The original NCR-27 framework contemplated an additional ₱25 increase in January 2027. Whether, when, or how that component may ultimately be implemented remains unresolved. Employers should continue factoring this uncertainty into future workforce planning.
Could Employers Face Retroactive Obligations? One of the most common questions raised by employers concerns the period between the originally scheduled implementation of NCR-27 in July 2026 and the September 26, 2026 effectivity of NCR-28. At present, no directive has required employers to provide retroactive payment covering that period. However, because the legal proceedings involving NCR-27 remain unresolved, employers should maintain accurate payroll records, document wage decisions, and closely monitor future regulatory or judicial developments.
For now, employers should focus on implementing NCR-28 upon effectivity, reviewing potential wage distortions, maintaining accurate payroll records, and closely monitoring developments involving NCR-27. The objective is ensuring that workforce decisions remain informed and defensible as the situation progresses.
Lockton can help organizations assess the workforce, compensation, and employee relations implications of wage increases while navigating an evolving regulatory environment.
