Labor & Employment in the Philippines

Our labor lawyers and HR consultants keep themselves updated on the latest changes in labor law and jurisprudence.  K&C will draft employee contracts and manuals for your employees, which follow the labor law guidelines. We can advise you on salary structures and suggest tax efficient compensation packages for your foreign employees as well. K&C also lists down what every foreign employer should know before setting up a company in the Philippines regarding hiring of employees.

Salary Structure & Wages

In general, salaries are slowly increasing in the Philippines due to economic growth, especially in the IT-BPO/Call Center industries. However, IT professionals, tech support, and call center support representatives’ salaries are still significantly lower than in the US, Canada, Australia, and Europe. The average monthly salary of tech or customer support representatives in the Philippines ranges from US$350 to US$500. The price of an IT professional in the Philippine can range anywhere from $400 – $3,00 depending on experience and skill-set.

Mandatory Employee Benefits

The Philippine Social Security System consists of Social Security System (SSS), Home Development Mutual Fund (HDMF), and Philippine Health Insurance Corporation (PhilHealth).  The SSS was created to provide private employees and their families with protection against disability, sickness, old age, and death. The Government Service Insurance System (GSIS) is an equivalent system for Philippine government employees. The HMDF is a provident savings system providing housing loans to private and Philippine government employees, and to self-employed persons who elect to join the Fund.  PhilHealth is administered by the Philippine National Health Corporation, which is designed to provide employees with a practical means of paying for adequate medical care in the Philippines. Read more.. >>

Working Hours

The laws on labor standards and employment relations are consolidated in the Labor Code of the Philippines. Employees in the Philippines generally work eight hours per day or 48 hours per week. Some offices and industries work half or full days on Saturdays. Rest periods of short duration during work hours shall be counted as hours worked. In the IT-BPO industry most of the employees’ schedules are at the graveyard shift to coincide with U.S. hours. Read more.. >>

13th Month Pay

The 13th month pay in the Philippines is equivalent to 1/12 of the basic salary received by an employee within the year. If a Filipino employee worked for less than a year (regardless of the cause for the termination of employment), the amount due to him is determined by dividing the total salary he received by the number of months he was employed.
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National, Official, and Non-working Holidays

In general, providing a fixed list of holiday dates is difficult because most of the 2008 regular holidays and nationwide special holidays are movable, as provided under Republic Act 9492 (an Act rationalizing the celebration of national holidays). For these movable holidays, the President is tasked by law to issue a Proclamation, at least 6 months prior to a movable holiday, fixing the specific date of that non-working day. Read more.. >>

Types of Employment

Depending on the company and/or industry, there are various types or categories of employment in the Philippines. This essentially comes down to how the employer wants the employee’s employment to be structured, which should be bound by a contract signed by both the employer and employee. Generally, types of employment in the Philippines are listed as, Project, Seasonal, Regular & Casual, Term or Fixed, and Probationary Employment. Read more.. >>

Termination of Employees & Severance

An equality of rights exists between employer and employee. While the employer cannot force the employee to work against his or her will, neither can the employee compel the employer to continue giving him or her work if there is a lawful reason not to do so. Thus, the employer may terminate the services of an employee for just or authorized causes after following the procedure laid down by law, but the employer has the burden of proving the lawfulness of the employee’s dismissal in the proper forum. Read more.. >>