Overview of Labor Laws and Employment Policies in the Philippines

Employment Law Overview

• Key Legislation:
  • Labor Code of the Philippines (Republic Act No. 4422)
  • Social Security Law (Republic Act No. 11199)
  • National Wages and Productivity Commission Act (Republic Act No. 6727)
• Legal Characteristics:
  • Aims to protect the rights and welfare of employees
  • Sets standards for minimum wage, working hours, leaves, and severance pay
  • Promotes harmonious and equitable labor relations

Employment Contract Requirements

• Types of Contracts:
  • Indefinite contracts
  • Fixed-term contracts
• Contractual Provisions:
  • Must include information such as employee's name, position, work location, salary, working hours, and benefits
• Language and Currency:
  • Contracts must be in the official Philippine languages (Filipino or English)
  • Wages and benefits must be paid in Philippine Pesos (PHP)

Working Time Regulations

• Standard Working Hours:
  • 40 hours per week, 8 hours per day
• Rest Days and Breaks:
  • At least 24 hours of rest per week
  • 1-hour break after every 6 hours of work

Leave Policies

• Annual Leave:
  • 5 days of paid annual leave per year
• Public Holidays:
  • 18 national legal holidays
• Special Leaves:
  • Sick leave (provided by the Social Security System)
  • Maternity leave (105 days paid leave)
  • Paternity leave (7 days paid leave)

Employee Separation and Termination

• Notice Period:
  • 1 month (after probationary period)
• Severance Pay:
  • 1 month's salary for every year of service (for termination due to authorized causes)
• Protection Against Unfair Dismissal:
  • Employer must prove the legality of dismissal
  • Employees have the right to file a complaint for unfair dismissal

Taxation

• Personal Income Tax:

  • Salary Range (PHP)	Tax Rate
    0 - 250,000	0%
    250,001 - 400,000	20%
    400,001 - 800,000	30,000PHP+25%
    800,001 - 2,000,000	130,00PHP+30%
    2,000,001 - 8,000,000	490,000PHP+32%
    8,000,001 and above	2,410,000PHP+35%

• Social Security Contributions:

  • Employee: 9.5%
  • Employer: 13.5%

Health Insurance

• Insurance Policy:
  • Universal healthcare provided by the Philippine Health Insurance Corporation (PhilHealth)
• Coverage:
  • Inpatient and outpatient care
  • Medicines and medical devices

Compensation and Benefits

• Minimum Wage:
  • Varies by region
• Compensation Structure:
  • Basic salary
  • Bonuses
  • Allowances
• 13th Month Pay:
  • Mandatory 13th month salary bonus

Work Permits and Visas

• Permit Requirements:
  • Foreigners require a work permit
• Application Process:
  • Apply through the Philippine Department of Labor

Confidentiality and Non-Compete Clauses

• Enforceability:
  • Confidentiality and non-compete clauses are enforceable in the Philippines
• Common Provisions:
  • Prohibit employees from disclosing confidential information after leaving employment
  • Prohibit employees from working for competitors after leaving employment

Training and Development

• Legal Requirements:
  • Employers must provide safety training to employees
• Government Support:
  • Government provides training and development programs

Workplace Diversity and Inclusion

• Legal Requirements:
  • Prohibits discrimination based on gender, religion, race, or other protected characteristics
• Enforcement Measures:
  • Employers must establish anti-discrimination policies and procedures

Remote Work Policies

• Legal Framework:
  • Remote work is legally recognized in the Philippines
• Tax and Insurance Implications:
  • Remote work may affect tax and social security contributions

Authoritative Website Addresses

• Department of Labor and Employment: https://www.dole.gov.ph/