Philippines

Employment Contracts

Employment contracts must be written. Contracts generally include:

• Name of the parties
• Job position, description, and status
• Pay
• Benefits

Most full-time employees are considered indefinite, while employees hired in a project-based capacity are considered fixed term.
Background checks and investigations are not regulated by law, however, any background checks cannot violate any data privacy laws.

Public Holidays

The Philippines observe the following holidays:

• New Year’s Day
• Maundy Thursday
• Good Friday
• Araw ng Kagitingan
• Labor Day
• Independence Day
• National Heroes Day
• Bonifacio Day
• Christmas Day
• Rizal Day

Compensation

The minimum wage is set by the Regional Tripartite Wages and Productivity Board. The Philippines has 16 regions, each with their own boards that determine what the local minimum wage will be.

Employees receive a 13th month bonus and some employers offer an additional Christmas bonus or 14th month pay.

Working Hours

The standard work period is 40 hours over five days. Overtime is paid at percentages of the basic wage, which varies for a Sunday or paid holiday unless a collective bargaining agreement or employment contract says otherwise. Employees receive at least 24 hours rest after every six consecutive days of work. Evening work is compensated at a percentage of the basic rate and is performed between 10 p.m. and 6 a.m. Employment of women during overnight hours is prohibited.

Young workers below 15 years old have their workweek capped at 20 hours, while workers between 15 to 18 years old have their workweek capped at 40 hours. They cannot work during the evening.

Vacation Leave

In addition to public holidays, employees are entitled to five days of paid leave after one year of service, but many employers offer 15 days of paid leave for professional and/or executive level employees.

Sick Leave

Employers in the Philippines are not required to provide employees with sick leave. However, it is common to offer 15 days of sick leave.
Employees also may be eligible for benefits under the social security program in the Philippines. Employees are eligible if they:

• Made at least three months of contributions in the 12-month period immediately preceding the six-month period (January-June, April-September, July-December, or October-March) during which they became ill
• Are hospitalized or unable to work due to illness for at least four days
• Provide a medical certificate as evidence of their illness

Maternity / Paternity Leave

Female employees receive up to 105 days of fully paid maternity leave for each pregnancy they have while employed. In order to be eligible for this maternity leave, the employee must have made at least three-monthly contributions to social security in the 12 months immediately preceding the six-month period (January-June, April-September, July-December or October-March) of the birth. Single mothers can request a 15-day extension with pay. Employees can extend their leave by an additional 30 days without pay.

Women can transfer up to seven days of their maternity leave to their child’s father.

Employment Termination / Severance

An employment contract may be terminated at the end of the contract period (if for a fixed term), by the employer or by the employee.

An employer can terminate an employee during the probation period for just cause or if the employee does not meet the qualifications for regular employment. The probation period cannot exceed six months for a contract with an indefinite term.

The procedure for dismissal varies according to whether such dismissal is due to just or authorized cause. Dismissal due to just cause requires written notice specifying the grounds of dismissal, and the employee must be given at least five days to provide an explanation. Terminations for just cause includes:

• Serious misconduct
• Willful disobedience
• Fraud
• Breach of trust
• Commission of a crime

An employee terminated for just cause is not entitled to separation pay.

An employer can dismiss an employee for an authorized cause, which includes:

• Installation of labor-saving equipment
• Redundancy
• Reduction of cost to prevent losses
• Sale or closing of the business

Health Insurance Benefits

The state provides compulsory universal healthcare. This healthcare is funded by both employers and employees. The contribution rate is a percentage of covered pay, which is split equally between employers and employees. Private healthcare is also available.