Employment Laws in Philippines – An Insight
With 7,100 islands, the Philippines is the hub of global talent in various industries. Therefore, the collective islands are famous for its work culture and professional ethics. Do you know about the employment laws in Philippines? The country is quite particular about retaining the interest of its employees. If you plan to hire employees from the Philippines, you are on the right page.
In this blog, we will discuss the employment laws in Philippines which are crucial for hiring Filipino employees. Before learning about labor law in the Philippines, let’s have a look at the Philippines’ workforce and industries.
A brief about the Philippines – workforce and industries
The Philippines has a diverse and dynamic workforce that supports a variety of industries. The country’s economic landscape has evolved significantly over the years, marked by growth in several key sectors.
Here’s an overview of the workforce and industries in the Philippines:
Demographics: The Philippines has a young, growing population, with a significant portion of the workforce being under the age of 30. This demographic provides a steady supply of labor.
Education and skills: The country has a high literacy rate and a strong focus on education, with many Filipinos fluent in English. There’s a considerable emphasis on higher education, especially in fields like engineering, information technology, healthcare, and business.
Business Process Outsourcing (BPO): The BPO industry, especially call centers, IT support, and back-office services, is one of the fastest-growing sectors in the Philippines. The country is a global leader in this industry due to its large English-speaking population and competitive labor costs.
Information Technology: The IT sector is rapidly expanding, driven by a young, tech-savvy workforce. Areas such as software development, web design, and digital marketing are growing fields.
Services sector: The services sector, including finance, is a major contributor to the GDP and employs a large portion of the workforce.
Types of employment in Philippines
The types of employment in the Philippines can be categorized based on several measures, such as the employee’s relationship with the employer, the duration of the work, and the nature of the job.
Here are some of the key types:
By relationship with employer
- Regular employment: The most common type offering permanent positions with full benefits and job security. Examples include office workers, teachers, and nurses.
- Contractual employment: Fixed-term employment with a pre-determined duration, usually for specific projects or temporary needs. Common in construction, IT, and events industries.
- Casual employment: Short-term, intermittent work with no guarantee of continued employment. Often seen in retail, food service, and agriculture.
- Probationary employment: Initial period of assessment for regular jobs, typically six months.
- Project employment: Specific to a particular project or undertaking with defined start and end dates.
- Seasonal employment: Limited to certain seasons or peak periods, common in tourism and agriculture.
- Full-time: Regular weekly work hours exceeding 40 hours.
- Part-time: Regular weekly work hours less than 40 hours.
By nature of the job
- Blue-collar jobs: Manual labor or skilled working-class occupations, like construction workers, mechanics, and farmers.
- White-collar jobs: Office or management positions, often requiring higher education, like accountants, lawyers, and engineers.
- Service sector jobs: Providing services to customers, like hospitality workers, retail assistants, and hairdressers.
Labor laws in Philippines – detailed discussion
Labor law in Philippines is primarily mentioned in the Labor Code of the Philippines and amended as Presidential Decree No. 442.
The list of labor laws in the Philippines covers a comprehensive legal framework. Below is the detailed discussion:
Minimum wage law
Sets the minimum wages across various regions and industries, determined by the Regional Tripartite Wages and Productivity Boards. The Department of Labor and Employment has provided the resources and guidelines for employers and employees to follow the minimum wage regulations.
For non-agricultural workers
National Capital Region (NCR): 570 – 610 Philippines Peso/ day
Region IV-A (CALABARZON): 385 – 520 Philippines Peso/day
Other regions: 330 – 533 Philippines Peso/day
Working hours in the Philippines
As per the Labor code the regular working time is as follows:
Daily: Not more than 8 hours
Weekly: Not more than forty hours
Night shift: From 10 PM – 6 PM
Compressed work week: Employees can work less than 48 hours per week under the special agreement registered with the Department of Labor and Employment.
Rest day: Sunday and regular holidays
Overtime: Employees who work beyond eight hours are entitled to overtime pay. Employees get at least 25% of their regular hourly wage according to labor law in Philippines.
Leave and holidays
Annual leave: Employees who complete one year of service may receive five paid annual leave. The number will increase as the service tenure rises gradually.
Sick leave: According to the Philippine labor code, employees who have completed one year of employment are eligible to get five days of paid sick leave.
Maternity leave: According to Republic Act No. 11210, all female employees are entitled to 105 days of maternity leave with full pay. Further, single mothers can get an additional 15 days of paid leave according to the Solo Parent Welfare Act of 2000. Maternity leaves can be extended up to 30 days without pay.
Paternity leave: Male employees in Philippines are eligible to get seven days of paid paternity leave if their legal wife experiences childbirth or miscarriage. The paid paternity leaves will be available for up to 4 deliveries with a lawful wife.
Parental leave for solo parents: Under the Republic Act No. 8972 or the Solo Parent’s Welfare Act of 2003, single parents can get seven days of paid leave per year. To get the solo parent leave facility, employees must submit legal documents against his/her claim that he/she is a single parent.
Special pay and benefits
Holiday pay: Government holidays and special non-working days are mentioned in government and private organizations. Employees working on those days will get the benefits according to the HR policies of their respective employers.
13th-month pay: 13th-month pay or Christmas bonus is compulsory for Filipino workers. Every year, within 24th December, employees get a 13th-month payment, which is equal to 1/12th of their basic salary.
Health and safety
Safe working conditions: Employers are required to maintain safe and healthful working conditions and to use safety devices according to labor laws in Philippines.
Social security and benefits
Social Security System (SSS): Employees are required to be members of the SSS, which provides benefits for retirement, disability, maternity, and death.
PhilHealth: Philhealth covers a wide range of employees’ health insurance that includes room accommodation, diagnostic and laboratory tests, medicines and medical supplies, operation and anesthesia, etc.
Pag-IBIG fund: Membership in the Pag-IBIG Fund (Home Development Mutual Fund) is mandatory for Filipino employees as it covers many aspects, including home loans, home improvement loans, multipurpose loans, etc. It also helps in savings.
Termination of employment
Security of tenure: Security of tenure is a complex process between employers and employees. However, the Senate bill is pending, and the security depends on the HR policies of respective organizations.
Just causes for termination: Legal grounds for termination initiated by the employer, such as serious misconduct, willful disobedience, and gross and habitual neglect of duties.
Authorized causes for termination: Legal grounds for termination due to business reasons, such as redundancy, installation of labor-saving devices, retrenchment to prevent losses, and closure or cessation of operation.
Separation pay: Compensation is required in cases of legal termination under authorized causes.
Due process in termination: Requirements for procedural due process in termination cases.
Employment of women: Specific provisions to ensure the protection of women in the workplace, including prohibitions against discrimination and stipulations for night work.
Employment of minors: Regulations on the work of individuals under 18 years of age.
Occupational health and safety: Standards for safe and healthful working conditions.
Workers’ compensation: Compensation for work-related accidents and illnesses, covered under the Employees’ Compensation Program.
How do you manage the labor laws in the Philippines without hassle?
Managing labor law in Philippines involves a multifaceted approach that includes understanding legal requirements, implementing policies and procedures, and ensuring continuous compliance. To address the labor laws effectively, employers need to understand:
- The legal requirements
- Develop and implement internal policy
- Regular training and communication
- Ensure compliance with payroll and benefits
- Maintain health and safety standards
- Manage labor issues compassionately
- Nurture a positive work environment
There is another way to manage the employment laws in Philippines – use Global Squirrels.
In what way does Global Squirrels help in employment laws in the Philippines?
Global Squirrels is a SaaS product that helps in remote hiring of employees in the Philippines and other countries. The platform would give you access to global talents from several industries so that you can select suitable candidates for your organization.
Besides hiring, Global Squirrels also assists in payroll management, which includes compensation calculations, tax calculations, benefits and leave sheet handling, compliances based on international laws and regulations, etc.
Sign up with Global Squirrels and get several benefits, including:
- You can access a massive global talent pool
- No need to set up any local entity to hire professionals
- There’s no bloated markups or agency fees
- You only need to pay a license fee per hire
- It will assist in payroll management
- It also helps in compliance with international laws
- Besides individual employees, you can hire a contractor
The pricing plan starts at $199/hire/employee/month. Other plans are also available based on your requirements. Sign up with Global Squirrels, request a demo, and make the remote hiring journey smooth sailing.
Employment laws in Philippines are diversified in terms of multiple labor laws. The Philippines’ professionals are talented and skilled. Global Squirrels, on the other hand, helps in remote hiring. While signing up with Global Squirrels, the platform will assist you with a smooth and hassle-free remote hiring and payroll process.