23 June 2017
Staff Recruitment in the Philippines
The Philippines offers a highly educated workforce with good English speaking skills and 65% of the 100 million people are of working age. The Department of Labor and Employment (DOLE) is the entity responsible in the field of labour and employment. The Labour Codes of the Philippines lay down the minimum terms, conditions and benefits of employment that employers must provide or comply with and to which the employees are entitled as a matter of right. Key points to be aware of are:
- Non-residents require an employment permit, which is generally only granted in circumstances where there is no available Philippine person who is competent, willing, and able to perform the role.
- Normal working hours should not exceed eight hours a day and employees are entitled to a minimum break of one hour. An overtime rate must be paid on any hours exceeding eight hours, and night time working (from 10pm to 6am of the following day).
- Minimum wages must be paid and they vary by region. Daily rates range between PHP250 (US$5) and PHP500 (US$10). See the National Wages and Productivity Commission website for current regional daily minimum wage rates.
- Wages are paid in cash at least twice a month. Employers are generally required to make a 13th month pay to employees, amounting to 1/12th of the employee’s basic salary during the calendar year.
The following additional contributions are generally required:
- Social Security System (SSS) payments totalling 11% (7.37% employer and 3.63% employee) on monthly salary not exceeding PHP16,000 (US$320).
- Employees’ Compensation Programme (ECP), which is currently set at a maximum of PHP30 (US$0.6) per month per employee.
- Philippine Health Insurance Corporation (PHIC), which is based on the employee’s salary base with the total contribution payable divided equally between the employer and the employee. Monthly total contributions range between PHP200 (US$4) and PHP875 (US$18).
- Home Development Mutual Fund (HDMF), which provides housing loans. Contributions range between 3% and 4% of monthly salary, with both employer and employee contributing.
- Employees generally have the right to form and join unions, although certain classes of employees, such as managerial and confidential employees, do not have this right. A union has to be registered with DOLE in order to enjoy all the rights granted by law.
- Regulatory Environment
- Establishing a Presence
- Intellectual Property Protection
- Staff Recruitment
- Tax Considerations
- Import/Export Procedures
- Further information