Labor Law on Compensation

The International Labor Laws as well as the labor laws of each state and nation has provisions for compensation of every worker depending on its qualifications, nature of work, and performance.

Compensation is a tool that a company provides for its employees for many different reasons.

One reason would be to give the monetary equivalent of the efforts and works of the employee within a certain period. It is agreed in every hiring contract that the employee shall receive a certain amount of compensation per hour, per day, per week, or monthly depending on what the employer decides on as long as the worker shall be paid for his services in a month. Another reason would be to motivate the company’s employees to work better. In this aspect, both the worker and the employer will benefit from it. When a worker is motivated to work, the quality of his work will be very high. In return, the company’s profits may increase due to its remarkable products and services.

Compensation may also be used to attract new workers and reward employees to stay. By seeing that the company has a competitive compensation package for its workers many will be lured to join the company and at the same time the employees who are already in the company will not think of leaving because of the satisfaction they get in terms of their salary. A good compensation is also the company’s way of appealing to unions to be in favor of the management. Usually, the problem that arises between the employees and the employer is money matters. If the company can satisfy the workers thru the compensation, then there will be no problems on strikes facing the employers in the near future. Compensation may also be a form of reward for the workers who are performing very well in the company.

All labor laws that are passed in different countries include provisions for compensations. You may even look at the International Labor Laws wherein you can surely see compensation provisions. One way or another, national labor laws and International Labor Laws also meet in different points in terms of their compensation provisions. And among the considerable points that you may observe are the equal remuneration, and the mandatory minimum wage for all workers.

When you say equal remuneration, the International Labor Law proclaims that there must be equal compensation between men and women employees given that they both have the same position in the company or equal work value. The said provision on compensation is declared in the Convention No.100: Convention Concerning Equal Remuneration, which was passed on by the International Labor Organization. It says there that remuneration pertains to any form of minimum or basic salary and bonuses that are given directly or indirectly to the workers; be it in cash or in kind.

The remuneration is considered as a payment out of the provided services of the employee for the company. This convention specifically declares that there must be no discrimination pertinent to the gender of the employees, especially in the computation and giving of compensation. The said convention is only applicable to the sovereign countries and entities that are recognized internationally. Each state or nation also has their own labor law, which also includes this provision on equal remuneration. There may be small changes on it but basically, they also have this in their own labor laws.

The International Labor Laws and the labor laws of each state and nation also have provisions for the minimum wage for all workers. This doesn’t mean that all workers must receive the minimum wage only. This means that the minimum wage that is marked by the labor law is the lowest salary that a person may receive in exchange of his products and services from the company. Self-employed or businessmen are not included in this provision. The increase from the minimum wage depends on the qualifications, nature of work, and the performance of the individual. The minimum wage is based on the current studies and computations of up to how much can an individual survive in a day. It will then be computed for the days to be paid with additional benefits and will be deducted with the taxes.


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