How to Hire an Employee in the Philippines?

When hiring someone in the Philippines, there are several documents that employers are required to prepare and submit. These include a Empolyment Offer Letter that outlines the terms and conditions of employment, an employment contract that serves as a legally binding agreement between the employer and employee, and registrations with various government agencies such as the Philippine Health Insurance Corporation (PhilHealth) and the Social Security System (SSS). Employers are also required to obtain a tax identification number (TIN) for their employees, as well as clearances from the local barangay office and the National Bureau of Investigation (NBI) to verify residency, good standing in the community, and criminal background. It is strongly recommended to use a Philippine Employment Contract when hiring an employee to ensure the protection of your interests and operations.

Whether you’re a startup or looking to grow your business, hiring new employees is a crucial step in achieving your goals. If you’re considering hiring in the Philippines, it’s important to know the steps and requirements involved. Our comprehensive guide to hiring an employee in the Philippines covers everything you need to know, starting with job postings and ending with onboarding.

To hire an employee in the Philippines, the initial stage involves crafting a job description that accurately outlines the position’s duties and requirements. This should include the job title, responsibilities, qualifications, and other details about the role. Be specific and clear about what you’re looking for in a candidate.

Once you have a job description, you can post the job opening. There are various job boards and websites in the Philippines where you can post job ads, such as JobStreet, Kalibrr, and Indeed. You can also post on social media and your own website.

After you’ve received applications, you’ll need to screen resumes and conduct interviews to find the best candidate. It’s important to verify their credentials and experience, as well as their personality and fit for your company culture.

Once you’ve found the right candidate, you can make a job offer and negotiate salary. The salary should be in line with industry standards and the candidate’s experience and qualifications.

After the job offer has been accepted, you’ll need to sign an employment contract and register with government agencies such as the Social Security System (SSS), PhilHealth, and Pag-IBIG Fund. These agencies provide benefits such as healthcare and retirement savings for employees.

Before the employee can start working, they’ll need to undergo a pre-employment medical exam. This is required by law to ensure the employee is fit for work and doesn’t pose a health risk to others.

Finally, you can onboard the new employee and provide any necessary training. This is important to ensure they understand their role and responsibilities, as well as your company culture and values.

It is legal to hire foreign employees in the Philippines, subject to the requirements and procedures set by the Department of Labor and Employment (DOLE) and other government agencies.

The following are the general guidelines for hiring foreign employees in the Philippines:

1. Work permits and visas: Foreign employees must obtain a work permit and a visa before they can work in the Philippines. The employer must apply for the work permit on behalf of the foreign employee with the DOLE, and the employee must obtain the appropriate visa from the Philippine embassy or consulate in their home country.

2. Quota and non-quota positions: The DOLE imposes quotas on certain industries and professions that limit the number of foreign employees that can be hired. Non-quota positions, such as executives and managers, do not have any numerical limitations.

3. Skills and qualifications: The foreign employee must possess the necessary skills and qualifications required for the position. The employer must demonstrate that there is no local candidate available who is qualified for the job.

4. Minimum salary requirement: The employer must pay the foreign employee the prevailing wage rate for their position or a salary that is higher than the minimum wage for local employees.

5. Social Security and other benefits: The employer must comply with the mandatory social security contributions and other benefits required by the law, such as PhilHealth and Pag-IBIG contributions.

It’s important to note that hiring foreign employees in the Philippines may have legal and administrative complexities. It’s best to seek advice from the DOLE or a lawyer to ensure compliance with the law and regulations.

An employer can terminate an employee during the probationary period in the Philippines. The probationary period is a trial period for both the employer and employee to assess if they are a good fit for each other.

Under the law, the maximum probationary period is six months, unless otherwise provided by the employment contract or collective bargaining agreement. During this period, the employer can terminate the employee for any valid reason, such as poor performance, misconduct, or violation of company policies and procedures.

However, the employer must still comply with the due process requirements, which include:

In the Philippines, an employer can terminate an employee’s contract without cause, but it must be done in compliance with the provisions of the Labor Code and other applicable laws.

Under the Labor Code, an employer can terminate an employee’s contract for any of the following reasons:

However, if the termination is without cause, the employer must provide the employee with a written notice of termination indicating that the termination is without cause and the date of the termination. The employer must also give the employee a separation pay equivalent to at least one-half month’s pay for every year of service, or one month’s pay, whichever is higher.

It’s important to note that terminating an employee without cause may have legal and financial consequences, such as claims for illegal dismissal or damages. It’s best to consult with a lawyer or seek advice from the Department of Labor and Employment (DOLE) before terminating an employee’s contract without cause to ensure compliance with the law.

The minimum wage in the Philippines is a legally mandated floor on the amount that employers must pay their workers. It varies by region, industry, and occupation, and is set by regional wage boards based on several factors such as the cost of living, inflation rates, and productivity. The minimum wage aims to provide a decent standard of living for workers, protect them from exploitation and poverty, and promote social justice and economic development.

Acknowledging the minimum wage when entering a new market is crucial for several reasons. First, it ensures that businesses comply with labor laws and regulations, which are enforced by the Department of Labor and Employment (DOLE). Violating minimum wage laws can result in penalties, fines, and even closure of the business. Thus, knowing the minimum wage helps businesses avoid legal problems and maintain their reputation.

The benefits required by law for employees in the Philippines include healthcare, social security, and retirement savings.

1. Social Security and Medicare Benefits – Employers are required to provide social security and Medicare benefits to their employees, which include sickness, disability, retirement, and death benefits.

2. Paid Leave – Employees are entitled to paid annual leave of at least five days for service of one year, with an additional one day per year of service up to a maximum of 15 days. They are also entitled to paid sick leave of at least 15 days per year, and maternity leave of at least 60 days for normal delivery or 78 days for caesarian delivery.

3. Holiday Pay – Employees are entitled to receive pay for ten paid regular holidays and special non-working days per year.

4. 13th Month Pay – Employers are required to pay their employees a 13th month pay equivalent to one-twelfth of their basic salary earned within the calendar year.

5. Service Incentive Leave – Employees who have rendered at least one year of service are entitled to a service incentive leave of five days with pay.

6. Separation Pay – Employees who are terminated without just cause and who have served for at least one year are entitled to receive separation pay equivalent to one month’s salary for every year of service.

7. Health and Safety Benefits – Employers are required to provide their employees with a safe and healthy working environment and are responsible for ensuring that their workplaces comply with safety standards and regulations.