EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE
S. B. NO. 
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RECEiVtDBY;
Introduced by SENATOR JOEL VILLANUEVA
AN ACT ENHANCING THE REGULATION ON EMPLOYMENT 
OF FOREIGN NATIONALS AND TRANSFER OF 
TECHNOLOGY, AMENDING FOR THE PURPOSE ARTICLES 
40, 41, AND 42 OF PRESIDENTIAL DECREE NO. 442, AS 
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF 
THE PHILIPPINES AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The proposed amendments to Articles 40, 41, and 42 of the Philippine 
Labor Code is triggered by the lingering problem of coordination and 
accountability among government agencies for the increasing number of 
foreign nationals working illegally in the country. Additionally, it is a show of 
good faith to other countries, regions, and international bodies that the country 
honors its commitments in the WTO-GATS, ASEAN Economic Community 
(AEC), and other bilateral, regional and multilateral agreements, to at least 
review the restriction in the hiring of foreign nationals, or the Labor Market 
Test (LMT), which is used to determine the non-availability of a qualified, able 
and willing person in the Philippines to do the services for which the foreign 
national is being hired.
The amendments aim to: (1) update the provisions and reflect the 
terms used by the country in trade negotiations and in its bilateral, regional 
and multilateral agreements’ commitments; (2) provide flexibility in the Labor 
Market Test in cases where there is a short supply of skilled workers in 
specific industries, occupations and professions; (3) provide for training of 
Filipino understudies to transfer skills and technology from the foreign national 
through an understudy program; (4) emphasize that the Department of Labor 
and Employment is the sole issuing authority of employment permits all over 
the country including those working or employed in enterprises in preferred


areas of investments or in economic zones; and (5) update the fines and 
penalties for violations which was set several decades ago.
In conclusion, as the Philippines strives to meet its commitments in the 
WTO-GATS, AEG, and other bilateral, regional and multilateral agreements, 
the proposed amendments will improve but reiterate the restrictive policy on 
employment of foreign nationals.
The immediate passage of this bill is earnestly sought.
SENATOR JOEL VILLANUEVA


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE
S. B. NO. 343
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'19 JUL11 All 26
RECEIVED 8V.
Introduced by SENATOR JOEL VILLANUEVA
AN ACT ENHANCING THE REGULATION ON EMPLOYMENT OF 
FOREIGN NATIONALS AND TRANSFER OF TECHNOLOGY, 
AMENDING FOR THE PURPOSE ARTICLES 40, 41, AND 42 OF 
PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE 
KNOWN AS THE LABOR CODE OF THE PHILIPPINES 
AND FOR OTHER PURPOSES
Be It enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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SECTION. 1. Title II, Book I of the Labor Code is hereby amended to read as
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follows:
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Title II - Employment of Non-Resident [Aliens] FOREIGN NATIONALS
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SEC. 2. Article 40 of the Labor Code is hereby amended to read as follows:
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ARTICLE 40. Employment permit of non-resident [aliens] FOREIGN
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NATIONALS -  [Any alien] ALL NON-RESIDENT FOREIGN NATIONALS
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seeking [admission to the Philippines for employment purposes and any
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domestic or foreign employer who desires to engage an alien for]
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employment in the Philippines shall obtain an employment permit from
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the Department of Labor AND EMPLOYMENT.
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[The] AN employment permit may be issued to a non-resident [alien]
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FOREIGN 
NATIONAL [or—to------the—applicaot—employer—after—a
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determination -of the] 
SUBJECT TO THE LABOR MARKET TEST
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BASED ON THE non- availability of a
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Gompetentj-able-and] QUALIFIED AND willing
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to-perform—the services-for-^hich-the- atfen—is desired] FILIPINO
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NATIONAL.


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THE SECRETARY OF LABOR AND EMPLOYMENT IS AUTHORIZED
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TO GRANT EXEMPTIONS FROM THE LABOR MARKET TEST TO
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FOREIGN NATIONALS AS PROVIDED FOR UNDER EXISTING LAWS
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AND 
REGULATIONS, 
AS 
WELL 
AS 
IN INDUSTRIES 
OR
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OCCUPATIONS OR PRACTICE OF PROFESSIONS WHERE THERE
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IS SHORT SUPPLY, AS DETERMINED THROUGH TRIPARTITE
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CONSULTATION.
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For an enterprise registered in preferred areas of investments OR IN
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DESIGNATED ECONOMIC ZONES, THE employment permit SHALL
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ONLY BE ISSUED BY THE DEPARTMENT OF LABOR 
AND
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EMPLOYMENT, [may be issued] upon recommendation [of] BY the
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government agency charged with the supervision of said registered
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enterprise OR LOCATOR.
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SEC. 3. A new Article 40-A of the Labor Code is hereby provided to read as
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follows:
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ARTICLE 40-A. UNDERSTUDY PROGRAM -  FOREIGN NATIONALS
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ISSUED EMPLOYMENT PERMITS SHALL TRANSFER TECHNOLOGY
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TO AT LEAST TWO (2) FILIPINO UNDERSTUDIES WITHIN THE
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PRESCRIBED PERIOD AS INDICATED IN THE DEPARTMENT OF
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LABOR AND EMPLOYMENT-APPROVED UNDERSTUDY PROGRAM
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OF THE ENTERPRISE
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SEC. 4. Article 41 of the Labor Code is hereby amended to read as follows:
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ARTICLE 41. Prohibition against transfer of employment.
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(a) After the issuance of an employment permit, the [alien] FOREIGN
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NATIONAL shall not transfer to another job or change his/HER employer
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without prior approval of the Secretary of Labor AND EMPLOYMENT.
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(b) Any non-resident [alien] FOREIGN NATIONAL who shall take up
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employment in violation of the provision of this Title and its implementing
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rules and regulations, AS WELL AS THE EMPLOYER OR THE
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RESPONSIBLE PERSON REPRESENTING THE EMPLOYER, shall be
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punished [in accordance with the provisions of Articles 289 and 290]
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WITH A FINE of [the Labor Code] 
NOT LESS THAN FIFTY
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THOUSAND PESOS (P50.000.00) NOR MORE THAN ONE HUNDRED
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THOUSAND PESOS (PIOO.OOO.OO), OR IMPRISONMENT OF NOT
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LESS THAN SIX MONTHS NOR MORE THAN SIX YEARS OR BOTH
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SUCH FINE AND IMPRISONMENT AT THE DISCRETION OF THE
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COURT.
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In addition, the [alien worker] FOREIGN NATIONAL shall be subject to
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deportation after service of his/HER sentence.
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IN ADDITION, THE SECRETARY OF LABOR AND EMPLOYMENT
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SHALL IMPOSE A FINE OF FIFTY THOUSAND PESOS (P50,000.00)


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FOR EVERY YEAR OR FRACTION THEREOF OF CONTINUING 
VIOLATION TO BOTH THE FOREIGN NATIONAL FOUND WORKING 
WITHOUT VALID EMPLOYMENT PERMIT AND TO THE EMPLOYER.
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SEC. 5. Article 42 of the Labor Code is hereby amended to read as follows:
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ARTICLE 42. Submission of List. -  Any employer employing non­
resident foreign nationals [on the effective date of this Code] shall submit 
a list of such nationals to the REGIONAL DIRECTOR OF THE 
DEPARTMENT OF 
LABOR AND 
EMPLOYMENT WHICH 
HAS 
JURISDICTION ON THE EMPLOYER [Secretary of Labor and 
Employment] within 30 days after HIRING, [such date] indicating their 
names, citizenship, foreign and local addresses, nature of employment 
and status of stay in the country. [The Secretary of Labor and 
Employment shall then determine if they are entitled to an employment 
permit.]
SEC. 6. Implementing Rules and Regulations. -  Within ninety (90) days 
from the effectivity of this Act, the Secretary of Labor and Employment, in 
coordination with concerned agencies and in consultation with the relevant 
stakeholders, shall formulate the necessary rules and regulations to 
implement the provisions of this Act.
SEC. 7. Repealing Clause. -  All statutory laws, orders and issuances, rules 
and regulations and/or parts thereof inconsistent with the provisions of this Act 
are hereby repealed or modified accordingly.
SEC. 8. Effectivity. -  This Act shall take effect after fifteen (15) days from the 
date of its publication in Official Gazette or in a newspaper of general 
circulation.
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Approved,
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