Employer Of Record In the Philippines
Skuad’s Philippines EOR (Employer of Record) solution can help you establish, streamline and expedite your business set-up and expansion process without forming a separate legal entity in the country. The decision to expand your business in the Philippines can be fruitful as the island country boasts of its highly educated and skilled workforce in the fields of information technology and customer-related services, etc. People in the Philippines are flexible, warm and have strong work ethics.
One of the many hindrances while business expansion is to understand the legal rules and regulations, employment laws, taxation structure, filings, payroll management and other specific details of the country. This information is necessary to do business efficiently and effectively with a considerable cost mechanism.
Skuad’s global HR platform helps you understand all business requirements in the Philippines while you are sitting in your home country. All you need is Skuad’s automated and unified platform through which you can easily manage the payroll, taxes, recruitment, training, development and compliances of the Philippines. Let us begin by taking you through some basic employment guidelines and details about the Philippines.
The Philippines At a Glance
Estimated Population: 110 million
Currency: Philippine Peso
Official Language: Filipino (Tagalog) and English
Languages spoken: 12 other recognized languages
GDP: 6.8% (2021)
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Employment In the Philippines
The employment rate in the Philippines stood at 91.3% in January 2021. Employment laws in the Philippines are governed by the Labor Code 1974, which defines the rules and standards regarding employment policies, wage rates, working hours, employee benefits,etc..
Skuad’s Philippines EOR (Employer of Record) solution provides stimulating opportunities for companies across the globe to enter into the Philippines market. Our automated platform reduces the time and rigidity to hire employees or to conduct administrative activities such as managing payroll solutions and offering employment contracts without any delay.
To make the employment contract, it is necessary to know the rules for hiring and termination of private employees, the working conditions, overtime benefits, and updated guidelines of the labor code rules, if you need to stay compliant.
Skuad helps in carrying out business operations as per the laws of the Philippines and assists the individual or company to attain the desired objectives in an accurate manner while complying with all the applicable employment laws in the Philippines. As a result, your business will grow faster and have the potential to survive for a long time.
Let us discuss the employment laws in detail:
Contractors vs. Full-Time Employees
There are two primary employee categories in the Philippines which are protected through employment contracts in the Labor Code - full-time employees and contractor employees.
Full-time employment involves the provision of statutory sick pay, paternity leaves, minimum notice periods, legal protection against illegal or unfair dismissal, pension, health insurance benefits, etc. Workers employed on a full-time basis are selected according to the nature of work they conduct. They may be hired to perform activities necessary or desirable in the usual course of business.
Employees who serve for at least a year, whether continuous or interrupted, in respect of their business activity are also known as regular employees. They enjoy the security of tenure as per the Labor Code.
Contractors have a fixed tenure for a specific project, after which their engagement comes to an end. There are not entitled to the benefits normally given to full-time employees.
People in the Philippines mostly prefer full-time employment. One of the main reasons for this is job security. Full-time employment provides attractive benefits and a high level of job security.
Contact Skuad today to hire contractors and full-time employees with no hassles.
Hiring In the Philippines
Hiring an exceptional team for the growth of your business is vital for success because a good team helps in achieving the desired objectives of the organization. Before hiring, you must evaluate the skills and competency of the candidates during the interview process according to the job description. All employment-related issues are governed by the Philippines Department of Labor and Employment (DOLE) regulations.
The system of hiring in the Philippines for government positions is through civil services exams that take around two to six months. Vacancies in the private sector are filled through various job portals namely, Google for Jobs, Pinoy jobs, jobfinderph.com, Jora, etc. Upon selection, the candidate needs to enter into a written employment contract with the company in accordance with compliances. But you must be thinking how will you stay compliant by sitting in your home country?
Book a demo with Skuad to consult on how to proceed with hiring in the Philippines for your business expansion plan.
Probation & Termination
In the Philippines, every person new to the organization needs to undergo a probationary period of up to 6 months. However, the period may be extended if any apprenticeship agreement exists between the employer and the employee. After the successful completion of this period, the employee must be considered as a regular employee whether a new contract is executed or not for the same as per the employment law in the Philippines.
The Philippines Employer of Record (The Philippines EOR) solution makes it easier to expand business in an accurate and compliant manner without setting up separate legal entities in the Philippines. Choosing EOR can shape your business route in smooth payroll management, company compliances, attendance management, tax filings and other employment related tasks.
Skuad global HR platform will help to manage your business in a simplified way by removing complexities through its unified and automated platform which is designed to handle monthly payroll, onboarding employees, drafting employment contracts, managing compliances and all day to day HR functions for your employees in the Philippines. Talk to a Skuad expert now.
General Employer of Record Service Terms
Types Of Visas In the Philippines
The three categories of Visas in the Philippines are Immigrant, Non-Immigrant and Special Visa, which are further classified into different types of visas as explained in the table below:
Source: Visa Upon Arrival (SEVUA)
Skuad local partners in the Philippines can help you in managing work permits for your organization. As an EOR in the Philippines, Skuad manages all the employment requirements and responsibilities in a simplified and compliant manner. On Skuad’s HR platform the client company can handle their employees’ day-to-day employment activities and operations. For a work permit in the Philippines, you are required to apply for Employee Visa 9G at the Bureau of Immigration Philippines. The documents required are as follows:
- Copy of passport
- Employment Contract
- Alien Employment permit issued by the department of labor and employment
- Application Form
- Additional information on the applicant’s children (if needed)
- Notarized certification of the number of foreign and Filipino Employees
After the documents checklist preparation, Skuad will help to manage further processes for application. Consult with us now.
Payroll and Taxes In the Philippines
To manage payroll and taxation in the Philippines, you must be aware of the local employment rules and tax structure of the country as it may vary from one category to another. Taxation structure includes different types of tax laws like business tax, withholding tax, employee compensation, social security and more.
Skuad’s EOR solution will keep you compliant with payroll in the Philippines. The social security system also consists of a home development fund and the Philippines health insurance corporation (PhilHealth). Let us discuss the tax rates in detail.
Taxes in the Philippines
Provincial Rate / Minimum Wages Philippines 2022
Minimum wage revision in IV-A - Calabarzon, the Philippines
The provincial rate of daily minimum wages for Calabarzon (Region IV-A), the Philippines has seen an increase according to Wage Order No. IVA-19, published on June 14, 2022. The increase, cutting across different private sector industries, is mandated in two tranches:
- 1st Tranche, where workers in the private sector will receive PHP 3 (USD 0.051)-PHP 49 (USD 0.83) per day, in addition to the current minimum wage rates
- 2nd Tranche (applicable six months after 1st Tranche), where workers in the private sector will receive up to PHP 48 (USD 0.81) per day, in addition to 1st Tranche.
The minimum wage increase applies to a typical working day of working hours not exceeding eight hours per day and to all private sector workers regardless of position, status, designation, or method of wage payment.
The minimum wage increase applies to five provinces in Calabarzon including
The minimum wage increase is indicated, as per Wage Order No. IVA-19, in Non-Agriculture and Agriculture sectors in each province as follows:
Check Wage Order No. IVA-19 for a full record of wage increases across provinces, metropolitan areas, and municipalities (First-Sixth Class).
The Wage Order No. IVA-19 exempts certain organizations from compliance including:
- Retail or service industries employing 10 workers or less
- Organizations affected by COVID-19, or natural or human-caused disasters
Failing to comply with Wage Order No. IVA-19 will result in legal consequences as indicated in Section 12 of RA No. 6727, as amended by RA No. 8188.
Wage Order No. IVA-19 is effective 15 days from when published: June 30, 2022.
Reason for wage revision
There are four reasons the minimum wage limit in Calabarzon was raised including:
- Periodic assessment, where the Regional Tripartite Wages and Productivity Board assesses minimum regional wages to determine if current wages are responsive to in-region economic conditions
- General public complaints, where public hearings and consultations show a general discontent with extraordinary hikes in prices of oil products as well as basic goods and services
- Unionized petitions, where the Regional Tripartite Wages and Productivity Board received several petitions from the Federation of Free Workers, Metal Workers Alliance of the Philippines, and the Association of Minimum Wage Earners and Advocates on recent price hikes
- Combined economic and social factors, including public discontent, socio-economic indicators, the declining purchasing power of the Philippines peso, increased poverty, and impact of COVID-19
Incorporation: How To Set Up Subsidiaries In the Philippines?
We can help you make your company compliant in every corner of the country. The forms of business you can set up in the Philippines are a corporation, branch office, regional headquarter or foreign partnership. It also depends on the nature and activities of your business. So let’s discuss the requirement in detail.
For Filipino subsidiary establishment you need to file certain documents with the Securities and Exchange Commission and obtain necessary licenses along with the following documents:
- Articles of Association
- Memorandum of Association
- Declaration from the Treasurer’s office
- Company name verification and approval paper
- Registration datasheet
- Obtaining Tax Identification Number (TIN)
- Registration with the social security system
It will take around 30 days to incorporate a subsidiary in the Philippines, after which you can directly do your business with ease. And as Skuad is your global EOR solution provider, you don’t need to worry about how to fulfil the legal formalities including business compliances, training, development and hiring of your employees in the Philippines. Our goal is to simplify your business process so that you focus on core areas of business expansion.
Consult with SKUAD to understand the process in detail from experts.
Professional Employer Organization (PEO)
Professional Employment Organization (PEO) is an outsourced HR department where organizations merge with small and medium-sized businesses to handle your company compliances, payroll management, tax filing, recruitment and other services. So when you avail of the services of PEO, that organization smoothly handles your business operation without setting up any separate entity. PEO offers customized services according to the client requirement e.g. employee benefit, payroll processing, administration of workers compensation, business compliances, recruitment and others.
With the Philippines’ EOR solution you don’t need to associate with any small or medium size organization because you can directly become the legal employer. With Skuad’s EOR solution you can easily handle employee benefits and compensation, tax filing, payroll, compliance, attendance management and all other day-to-day activities related to HR.
Depending upon the nature, size and operations of your business, you may opt to hire directly by becoming a legal employer or tie-up with a Professional Employment Organization (PEO). Both options are available.
To decide, Book a DEMO WITH SKUAD.
While setting up business in the Philippines, you need to be aware of the local laws, rules and regulations to expand your business line in an accurate manner. A business requires a one-stop source where an effective and efficient EOR solution can be provided to complete the outsourcing needs of the business. Therefore, Skuad is a one-stop source to handle payroll, compliances, tax filing, managing the hire to retire cycle and more.
Still not sure on how to begin, connect with Skuad to make the right choice about your business expansion dream in the Philippines with our automated and unified platform.