MANILA, Philippines – Non-regular employees will soon be entitled to receive the service charge paid by customers, according to new rules from the Department of Labor and Employment (DOLE).

Under Department Order (DO) No. 242, series of 2024, revising the implementing rules and regulations of Article 96 of the Philippine Labor Code, regular and non-regular workers will be able to collect service charge, or the amount added to customers’ bills for service rendered.

In the section defining covered employees, DOLE deleted the phrase “under the direct employ of covered establishments,” which was in the superseded old rules, DO No. 206, series of 2019.

All employees are now covered, except managerial employees. Managerial employees, or those who have power to implement and execute policies or handle workers’ employment, are still not entitled to service charge, like in the old rules.

Examples of workers who are not directly employed by establishments include contractual, non-regular, or agency workers.

The rules apply to all establishments that collect service charge. These include hotels, restaurants, and other similar establishments like lodging houses, nightclubs, cocktail lounges, massage clinics, gambling houses, and sports clubs. Private subsidiaries of the government are included as well.

The order requires that covered establishments distribute service charge “completely and equally, based on actual hours or days of work or service rendered, among the covered employees.”

Covered employees should be receiving service charge not less than once every two weeks, or twice a month, at intervals not exceeding 16 days.

Labor Secretary Bienvenido Laguesma signed the order on Thursday, February 1. The order takes effect 15 days after publication in at least two newspapers.

‘Welcome’ development

Labor group Federation of Free Workers (FFW) on Saturday, February 3, welcomed the new rules.

Some of the behind-the-scenes work that led to Laguesma’s approval of the rules included a resolution from the National Anti-Poverty Commission-Formal Labor and Migrant Workers Sectoral Council recommending the revision.

“This change is a critical step in recognizing and rewarding the efforts of those workers, though not directly hired by the principal employees, who contribute to the service experience of clients or customers,” said FFW.

FFW urged all service sector employers to comply with the new rules, and to collaborate with unions and their employees to ensure a smooth transition to the “more equitable system.” – Rappler.com