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Compliance
Employment in the Philippines is regulated by the Labor Code of the Philippines, which sets minimum labor standards and protects both workers and employers. The Department of Labor and Employment (DOLE) is responsible for enforcing labor laws, conducting inspections, and resolving labor disputes through its regional offices and affiliated bodies such as the National Labor Relations Commission (NLRC). Additionally, various special laws—such as the Magna Carta for Women and the Social Security Act—impose additional employer obligations.
Employers must provide clear contracts for all employees, whether permanent, probationary, or project-based. Contracts should specify job duties, work location, wages, benefits, hours, and termination conditions. While oral contracts are valid, written contracts are strongly advised for legal clarity and enforcement. Probationary periods are typically limited to six months, during which termination must be for just cause and clearly documented.
The standard work week is 8 hours per day and 6 days per week, with a weekly rest period of at least 24 consecutive hours. Work exceeding 8 hours requires overtime pay at 125% of the regular rate. Work on rest days, holidays, or night shifts (10 PM to 6 AM) carries premium pay from 130% to 200%. Employers must also ensure timekeeping and rest breaks are documented and compliant with DOLE regulations.
The minimum wage varies by region, with Metro Manila set at PHP 610/day as of 2025. Employers must pay wages bi-monthly and issue detailed payslips. Deductions are only allowed if authorized by law or the employee (e.g., SSS, PhilHealth, Pag-IBIG). Employers must also pay the mandatory 13th-month bonus, equivalent to 1/12th of the total basic salary earned within a calendar year, on or before December 24.
Employers are required to register their workers with the Social Security System (SSS), PhilHealth (health insurance), and the Pag-IBIG Fund (housing). Employer contributions range from 8.5% (SSS) to 2% (Pag-IBIG). These programs provide workers with pension, maternity benefits, housing loans, and medical coverage. Non-compliance results in significant penalties and interest on missed contributions.
Foreign workers must obtain an Alien Employment Permit (AEP) from DOLE and a working visa from the Bureau of Immigration. Employers must prove that no local talent is available before hiring a foreigner. Violations can lead to revocation of permits and employer blacklisting.
Termination must be based on just or authorized causes under the Labor Code. Just causes include serious misconduct and gross neglect, while authorized causes include redundancy and retrenchment. Due process must be observed, including a notice to explain, hearing, and final written decision. Failure to comply exposes employers to legal claims for illegal dismissal.
DOLE conducts inspections on wage compliance, OSH standards, and employment documentation. Employers found non-compliant may be fined, face work stoppage, or be included in a public list of violators. Inspectors may issue compliance orders, and unresolved disputes are elevated to the NLRC.
AYP helps foreign and local companies navigate the complexities of Philippine labor laws through our Employer of Record service. We handle legal contracts, manage payroll, ensure government registration, and support dispute resolution—ensuring your workforce remains compliant and protected.
Looking to hire in the Philippines? Let AYP ensure your employment practices meet legal standards.
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