The Philippines is increasingly making a name for itself as a country with talented workers in fields like IT and customer service. With high rates of English proficiency, it’s no surprise that global employers are looking for skilled workers in this emerging market.
The likelihood of your internal HR team being experts in Filipino labor law is close to nil, but an Employer of Record (EOR) can help. An EOR serves as the legal employer for your Filipino team members ensuring your business remains compliant with labor laws and tax regulations.
In the Philippines, an EOR will handle:
- Onboarding
- Payroll
- Benefits
- Compliance
- Taxes
Want to enter the market and quickly and easily hire and onboard new talent from the Philippines? We’ve broken down how you can make this happen.
The Benefits of Using an EOR
Using an EOR to hire in the Philippines is a cost-effective way to outsource your payroll and HR functions. EORs are familiar with all local labor laws there so that you don’t have to be. EORs will take care of compliant onboarding, administering benefits, and paying your Filipino team members.
Contractual Relationships
In the Philippines, an employer-employee contract sets all the conditions of a role.
The Philippines has five employment categories:
- Probationary Employment
- Project Employment
- Seasonal Employment
- Fixed-Term Employment
- Casual Employment
If you’re hiring from the Philippines, it’s important to familiarize yourself with what type of contract you want to use.
Keeping a record of your employment via contract will help you and your employee reference work expectations should any conflicts arise.
If you need to terminate an employee, a contract helps you keep a dated record of their employment time so you can calculate severance and other payment requirements.
Risk and Considerations
The Philippines has a 13th-month pay stipulation in addition to a company employee’s base salary.
This is government-mandated and must be paid no later than December 24th of a given year.
Thirteenth-month pay in the Philippines is one-twelfth of an employee’s base annual salary. Say an employee in the Philippines made $50,000 a year. Because of their 13th-month pay requirement, you’d need to compensate your employee with an extra $4167 by Christmas Eve.
How Borderless AI Can Help
Concepts like 13th-month pay and Filipino employment categories can feel complicated, but with Borderless AI, they don’t have to be. We can eliminate the guesswork so you have peace of mind that you're hiring compliantly in the Philippines.
Book a demo to find out how we handle compliance, taxes, payroll, and more.
Disclaimer
Borderless AI does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
