Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

THIRTEENTH CONGRESS
First Regular Session

85

HNO.

INTRODUCED BY HONORABLE JUAN EDGARDO “SONNY” M. ANGARA
es

EXPLANATORY NOTE

This bill seeks to provide a Magna Carta for the Informal Sector.

The informal sector comprises almost half of the country’s total workforce, They include
among others the micro-entrepreneurs, the househelps, small farmers, illegal sidewalk vendors,
hawkers, kaingeros (or the so-called slash-and-burn dwellers), and other groups of people who
live and earn their living in their own little ways.

In economic parlance, “informal sector” refers to a specific sector in the economy where
most of the participants are categorized as “unregistered, undocumented, untaxed, uninsured,
disorganized and doing irregular economic activities.” Often, they are also being referred as
“small-scale (economic) units, self-employed activities (with or without hired workers, with low
level of organization and technology.”

Largely coming from the economically-disadvantaged sector, the informal sector live in
substandard conditions (in hovels even, among the many squatter colonies), earning just a
pittance that is hardly enough to meet their basic needs. They include the jobless and the
underemployed, out-of-school youth, housewives, and children, marginalized workers: in
depressed communities, the disabled, etc, — all of whom hailed from the impoverished groups
who lack skills, education and access to employment. Because of their very nature, they are
exposed to exploitative terms and conditions of work. Work condition is substandard, which
often feature cramped workspace, improper posture, fatigue, poor work tools, poor lighting and
ventilation, heat and some chemical hazards,

By their very nature and operation, workers belonging to the informal sector are excluded
from the coverage of the Labor Code and other pieces of social legislation and are subject to
exploitation by businesses and factories which often resort to subcontracting low wages, long
hours of work, absence of fringe benefits, etc. Moreover, women and children who fall into this
sector are likewise vulnerable to exploitation from wholesalers, moneylenders and corrupt police
authorities through “kotong” or extortion. Furthermore, the absence of a monitoring system and
regulations to protect their respective working environments have made them exposed to health
and safety risks.

It cannot also be denied, on the other hand, that by sheer need to eam a living, many of
the people in the informal sector who engage selling foodstuffs and drinks have often
compromised sanitation, safety and quality standards of the items they sold.


A cursory look etal these activity only proves that there are just a lot of things to be
pursued if indeed the government is to protect and promote the interest and welfare
of millions of Filipinos belonging to the informal sector of the economy.

‘This proposed Magna Carta for the Informal Sector, therefore, envisions to pursue
realistic efforts to correct the prevailing system which, in one way or another, have denied and
plunged the informal sector of the Philippine economy into deeper menace. By introducing an
integrated, holistic and comprehensive policy instrument for the informal sector, it is hoped that
a systematic effort towards bringing the informal sector into the mainstream of Philippine
economy can be achieved.

In view of this, the early passage of this bill is earnestly sought.

Lin Om

JUAN EDG: ANGARA
Lone District, Province of Aurora


THIRTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES )
First Regular Session )
: 85
H.B. No.

Introduced by HON. JUAN EDGARDO “SONNY” M. ANGARA

AN ACT
PROVIDING FOR A MAGNA CARTA FOR THE INFORMAL SECTOR,
INSTITUTIONALIZING MECHANISM FOR IMPLEMENTATION
THEREOF AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

TITLE I
GENERAL PROVISIONS

Chapter I
Framework and Principles

SECTION 1. Short Title. — This Act shall be known as the “Magna Carta for the
Informal Sector.”

SEC. 2, Declaration of Policy. — It is hereby declared the policy of the State:

(@) To promote and improve the total well-being of the poorest-of-the-poor and the
marginalized low level income earners who engaged in economic activities under the informal
sector;

(b) To nurture and protect the interests of the informal sector by providing with adequate
and timely social, economic and legal services, as well as mechanisms that shall protect their
rights and promote benefits that ensure their dignified existence and economic advancement;

(©) To recognize the rights of every worker in the informal sector, to protect them,
especially women and children, from abuse, economic exploitation and from performing work
that is hazardous to their physical, mental and spiritual health;

Toward this end, the State shall come up with an integrated, holistic and comprehensive
policy instrument for the informal sector that will facilitate:

(a) the enhancement of their entrepreneurial skills and their capabilities to become more
productive and self-reliant thereby ensuring their protection, assistance, support and participation
in the mainstream economic activities;

() @ continuing process of consultation and dialogue with said sector to be able to
maximize the provision of a systematic package of reform intervention services.


SEC. 3. Framework and Principles, - The government shall pursue a minimum
regulation and encourage the development of ingenuity and the entrepreneurial spirit among the
citizenry. In this regard, the LGUs and their respective attached agencies shall see to it that
procedural rules and requirements for the IS are minimized in the act of registration, availment of
financing, grants and other incentives and accessing other government services and assistance.

In order to hasten the growth and expansion of the various business activities or
enterprises under the informal sector, the private sector shall be encouraged to assist in the
effective implementation of this Act by participating in government programs for the informal
sector. In this regard, the DTI, in consultation with the concerned government agencies, the
LGUs and the informal sector, may recommend simplified procedure and localized incentives for
the benefit of the informal sector. The government shall encourage the organization,
establishment, strengthening and expansion of the various business activities or enterprises under
the informal sector in the barangay level preferably unified under a municipaV/city, provincial,
regional and national federation/association.

SEC. 4. Definition of Terms. ~ As used in this Act, the following terms shall mean:

(a) Daily Basis refers to the per day mode of paying a private worker as bilaterally agreed
upon by both the employer and the worker.

(b) Employer refers to a natural person or group or partnership of people for which a paid
worker renders productive employment or service.

(c) Hazardous work or condition refers to any activity or circumstance where a worker is
exposed to any risk which constitutes an imminent danger to his/her health and safety.

(@ Kasambahay refers to any person, whether male or female, who is to be engaged, is
engaged or has been engaged locally in a salaried capacity under a full-time basis and paid
directly by the employer, undertaking tasks ascribed as normal household chores within a
specific household. ‘The term includes maids, cooks, houseboys, family drivers and babysitters
(vaya) who provide daily service to a single, specific household, either on a live-in or live-out
basis. In common term, kasambahay is called household helper.

(©) Worker of minor age refers to children fifteen (15) years up to seventeen (17) years of
age who are engaged in productive employment under a valid contract of employment.

(®) Informal Sector, which is herein otherwise referred to as IS, refers to a category of
individuals or partnerships of people involved in any business activity or enterprise whose total
assets value, inclusive of the capital investments, must not be more than Ten Thousand Pesos
(P10,000.00) for single proprietorship and Twenty-five Thousand Pesos (P25,000.00) for
partnership ventures and/or whose annual income must not exceed Thirty-five Thousand Pesos
(P35,000.00) and One Hundred Fifty Thousand Pesos (P150,000,00), respectively.

The above definition shall be subject to review and adjustment upon the recommendation
by the Regional Wage Board (RWB), in consultation with the National Economic Development
Authority (NEDA) motu propio taking into account inflation and other economic indicators.

(g) Monthly Basis refers to the per month mode of paying a private worker as bilaterally
agreed upon by both the employer and the worker.

(h) Pacquiao Basis refers to the pre-contracted wholesale mode of paying a private
worker as bilaterally agreed upon by both the employer and the worker.

(i) Self-employed worker refers to any person, whether male or female, who is to be
engaged, is engaged or has been engaged locally and paid directly by the homeowner/employer
to provide services to either a single or a number of households on a contractual or day-to-day


basis, The term includes gardeners, laundry women and household helpers hired on a day-to-day
basis, provided that they do not report for work to a single household for four (4) days a week or
more, else they shall be classified as kasamabahay.

(@ Worker refers to a general term to mean either or both the self-employed or paid
employee covered under the provisions of this Act.

(k) Working hours refers to the period of time within which a worker is required to be on
call to perform any and all tasks that may be designated, regardless of whether there are actual
tasks being undertaken.

Chapter IE
Coverage, Qualifications and Accreditation

SEC. 5. Registration; Payment. — 1S business activities or enterprises shall, upon
registration, pay Fifty pesos (P50,00) to the municipality or city where they intend to
productively employed during their initial year of operation. The said fee shall cover the cost of
the issuance of the license to operate.

SEC. 6, Annual Dues, — 1S business activities or enterprises shall pay the fee to the
municipal or city treasurer where they are registered and accredited, starting on their second year
of operations, based on the following schedule:

(a) Those with net assets before financing amounting to not more than
P 2,000.00... P 180,00

(b) Those with net assets before financing of more of more than P 100,000.00 to
P 2,000.00 to 5,000.00... . P 360.00

(c) Those with net assets before financing of more than P400,000.00 to
P 7,500.00 to 10,000.00... . P 720.00

The collected fee shall accrue exclusively to the municipality or city and shall be used for
IS development programs approved by the municipal or city council.

SEC. 7. Revocation of Business Authority. — The authority to do business shall, after due
notice and hearing, be revoked and cancelled upon the failure of the IS business activities or
enterprises, without valid reasons, to commence its operations within forty-five (45) days from
receipt of the authority to operate.

SEC. 8. Coverage. — This Act shall cover thembers of the informal sector who are
operating, employed or working either as micro-entrépreneur, paid worker or self-employed as
defined herein. Provided, however, That the aforesaid! micro-entrepreneur, paid worker or self-
employed qualifies the minimum requirements set forth in this Act.

For purposes of this Act, the term “informal sector” shall cover the following:

(a) Micro-entrepreneurs:
(sidewalk vendors, fish vendors;
(i) small scale farmers and fisherfolks;

(b) Employed/SelfEmployed:
() local domestic helpers or kasambahay;
Gi) barbers, manicurists, pedicurists;
(iil) pedicabftricycle drivers;


(iv) jeepney drivers ;

(v) ‘taxi drivers ;

(vi) carpenters, plumbers, electrician, mason, house painters;
(vii) welders, mechanics

‘SEC. 9. Accreditation, — Any member of the IS who meets such eligibility, qualification
and other necessary requirements as provided for under this Act shall be accredited as member of
the IS.

Accreditation for eligibility for any development program shall be reviewed, revalidated
and reassessed every two (2) years from the date of last accreditation by the LGUs where the IS
operates, Renewal of eligibility shall be based in accordance with the merit and fitness principle.

SEC. 10. Eligibility for Benefits. — The selection and appointment of beneficiaries under
this Act shall be in accordance with the merit and fitness principle: Provided, That the applicant
is an accredited member of the IS, as prescribed herein. Only accredited member shall be
eligible for assistance, support and grants under this Act.

Chapter HI
Special Allocations for Development Initiatives

SEC. 11. Special Allocations for Development Initiatives, ~ The national government
shall allocate at least ten (10%) percent of its annual national budget to be appropriated
proportionately in accordance with the corresponding internal revenue allocation (IRA) of
tespective LGUs. Such allocation shail be annually added to the current IRA of LGUs.

The said allocation shall be utilized by LGUs for the implementation of livelihood
programs pursuant to the provisions of this Act. Priority shall be given to income generating
programs for the poorest-of-the-poor. The emphasis of the programs shall be focused on micro-
credit programs and schemes through the mobilization of the IS with no assets to engage in self-
employment and income generating activities,

For this purpose of this Chapter, an Informal Sector Development Fund shail be
established in every city/municipality for the their supervision and management subject to
accounting and auditing procedures by the Commission on Audit (COA).

SEC. 12. Sourcing and Adopting Development Initiatives. - The Small Business
Guarantee and Finance Corporation (SBGFC), which is created under Republic Act No. 8289,
shall assist in the sourcing and adopting of development initiatives for competitive enterprises in
terms of finance, technology, production, management and business linkages, and provide and
promote, develop and widen in both scope and service reach various alternative modes of
financing for IS business activities or enterprises, including but not limited to, direct and indirect
project lending, venture capital, financial leasing, secondary mortgage and/or rediscounting of
loan papers to IS business activities or enterprises, and crop production financing.

The Corporation shall guarantee loans obtained by qualified IS worker or business
activity or enterprise, whether single proprietorship or a partnership venture, under such terms
and conditions adopted by its Board. It shall become liable under its guarantees upon proof that
the loan has become past due under such terms and guidelines adopted by its Board and printed
on the contract of guarantee.

All provisions stipulated under R.A. No. 8289 in connection with the SBGFC shall
continue to effect except those which are deliberately changed or amended hereof.


SEC. 13, Eligibility for Government Assistance. ~ To qualify for assistance, incentives
and grants, a worker or business activity or enterprise shall be:

(@) duly registered and accredited with the appropriate agency in the LGU where they are
actively operating and paid the necessary fees for registration and accreditation from the office of
the municipal or city treasurer-concerned;

(b) one hundred percent (100%) owned and capitalized by Filipino citizens, be it single
proprietorship or a partnership venture; and

(©) fall under the above-mentioned sub-categories of IS;

SEC. 14, Exclusivity of Government Programs. - The government shall ensure that
programs of financing, grants and other similar incentives shall be exclusively extended to an
accredited IS worker and business activity or enterprise.

SEC. 15. Entitlement of Government Procurements. — The government shall work for a
mechanism to ensure that duly accredited IS worker or business activity or enterprise for an
entitlement of a share of at least ten percent (10%) of total procurement value of goods and
services supplied to the government, its bureaus, offices and agencies annually: Provided, That
prices and quality of goods offered by the above-mentioned accredited IS worker or business
activity or enterprise are competitive.

SEC. 16. Coordination with LGUs. - Pursuant to the provisions of Republic Act No.
7160, the local chief executives in coordination with IS representatives and appropriate agencies
shall formulate specific’ plans that will address the socio-economic needs of the IS. and
incorporate them in their respective provincial, city and municipal development plans:

SKC. 17. Tax Exemption. — A duly accredited IS worker or business activity or enterprise
shall be exempted from all taxes, national or local, license and building permit fees and other
business taxes, except real property and capital gains taxes, import duties and other taxes on
imported articles. In addition; any and all income, receipts and proceeds derived from their
business operations shall be ‘excluded for the computation of gross income for purposes of
computing te individual income tax of the members thereof.

It shall be exempted from any and all government rules’ and’ regulations in respect of . .
assets, incame, and other activities indispensably and directly utilized in, proceéding from or
connected with the IS basiness or the enterprise. .

SEC.18. Forfeiture of Benefits. — All the exemptions and other benefits herein provided
stall, after due, notice tnd hearing, be forfeited in case of any violation of the provisions of this
Act by any IS member‘or partnership venture.

“SEC. 19. inclusivity of Benefits. ~ The exemptions and other benefits provided in this

Act shall apply for a period not exceeding five (5) years from the date of the registration,

nik IS workef or business activity or enterprise is registered and accredited within five
(Sy3yearsdrom the’ effectivity of this Act.

Chapter IV
The Organization


SEC. 20, Creation of an Informal Sector Development Council; Mandate. — There is
hereby created an Inforthal Sector Development Council, herein otherwise referred to as the
Council, which shall be attached to the DTI and shall be constituted within sixty (60) days after
the approval of this Act.

The Council shall be the primary agency responsible for the promotion, growth and
development of the IS in the country by way of facilitating and closely coordinating national
efforts to promote the sector’s viability and growth, including the provision of an integrated
program for skills enhancement, literacy and education, health services, social welfare and
services, assistance in the tapping of local as well as foreign funds, and other functions relative to
the attainment of the objectives and policy of this Act.

SEC. 21. Composition. — The Council shall be headed by the Secretary of the DTI as
Chairman, and may elect from among themselves a Vice-Chairman to preside over the Council
meetings in the absence of the Chairman. The members shall be the following:

(a) Director General of the NEDA;

(b) Secretary of DA;

(©) Secretary of DOLE;

@ Secretary of DSWD;

(©) Secretary of the DOH

( Secretary of DOT;

(g) Administrator of the NHA;

(h) Administrator of the CDA;

(® Chairman of Small Business Guarantee and Finance Corporation;

(@® Three (3) representatives from the private sector at large, all Filipino citizens, to
represent Luzon, Visayas and Mindanao; and

(k) One (1) representative from the informal sector to be appointed by the President.

An ex officio member of the Council who possesses a cabinet-rank shall designate an
undersecretary or assistant secretary as his/her permanent alternate representative in case he/she
fails to attend meetings in the exigency of his/her official function in the department.

The private sector members of the Council shall be entitled to receive per diem of Two
Thousand Pesos (P2,000.00) per meeting, The Council shall meet once every two months or it
‘may call for special meetings as the need may arise: Provided, That the frequency of such special
meetings shall not exceed four (4) times annually.

The DTI shall allocate Ten million pesos (P10,000,000.00) out of its savings for the
initial operating expenses of the Council, after which the Council’s budget shall be included in
the departmerit’s annual appropriation.

SEE. 22. Mandate of the Council. — The Council shall have the following mandate:

(a) Prepare and establish a System of Accreditation for the IS in accordance with the
standards and provisions of this Act;


(b) Provide guidelines for the implementation by the LGUs of a fair and credible system
of evaluation, accreditation, review and assessment, merit promotion, rendering of grants and
incentive awards and other policies relative to the effective implementation of this Act;

(©) Prepare a program of training for human resource development, including the specific
areas of entrepreneurship and business management;

(a) Coordinate with LGUs for the development and implementation of periodic
evaluation of all accredited IS members -- taking into account their accomplishments,
capabilities and potentials — which results of shall be used as bases for evaluation, accreditation,
the grant of awards and incentives, training and retraining;

(e) Establish a performance appraisal system for all accredited IS members which shall
be the basis for incentives, rewards and recognition, training and development, including
adequate mechanisms that shall ensure their active participation and involvement; and

(f) Establish the criteria and process for the accreditation and renewal of such eligibility
for development assistance, support and grants.

SEC. 23. Authority of the Council to Solicit Assistance from Various Agencies. — The
Council may, ftom time to time, call upon the participation of any government agency or
bureaucracy in its deliberations especially when such agency is directly or indirectly concerned
with and/or affecting the growth and development of the IS in any particular area or manner,

The Council, further, may create an Executive Committee of five (5) members elected by
the Council from among themselves or their duly designated alternate representatives, with at
least two (2) members representing the private sector, and with authority to act for and on behalf
of the Council during intervals of meetings, and within the specific authority granted by the
Council.

SEC. 24, Council Secretariat. — The Council, through the Chairman, shall designate, in
his capacity as secretary of the DTI, any division or bureau within the DTI to act as the Council
Secretariat and shall have the following duties and functions:

(@) To prepare, in coordination with LGUs and other local government agencies, and
recommend annual as well as medium-term IS Enterprise Development Plans for the
approval of Council;

(b) To coordinate the preparation of position papers and background materials for
discussion or approval during Council meetings;

(©) To assist the Council in coordinating and monitoring the policies, programs and
activities of all government agencies with respect to the implementation of this Act;

(d) To prepare, collate, integrate all inputs to the Council’s yearly report on the status of
the IS business activities or enterprises in the country;

(©) To submit periodic reports to the Council on the progress and accomplishment of its
work programs; and

(f) To perform ad hoe functions as authorized by the Council.
SEC. 25, Rationalization of Programs. — The Council shall conduct continuing review of

government programs for the poorest-of-the-poor and the IS and submit to Congress and the
President a report thereon together with its policy recommendations.


The President is hereby empowered to establish, within ninety (90) days upon the
effectivity of this Act, an informal sector enterprise promotion body which shall be the principal
government agency that will formulate, implement, coordinate and monitor all non-financing
government programs, including fee-based services, to support and promote entrepreneurial
spirit among the poorest-of-the-poor. The informal sector enterprise promotion body shall be
attached to the DTI and shall be under the policy, program and administrative supervision of the
Informal Sector Development Council. The said office shall be allocated the amount of Ten
million pesos (P10,000,000.00) for its first year of operation which shall be appropriated from
the special fund of the Office of the President, and thereafter its annual appropriation shall be
included in the General Appropriations Act.

Heads of LGUs in the provincial, city and municipal levels are further empowered to
establish in their respective jurisdiction an Informal Sector Division or Bureau, under the office
of the Provincial Governor or City/Municipal Mayor, whichever is applicable, to implement,
coordinate and monitor all business activities or enterprises and intervene on IS-related problems
and concerns under their respective jurisdictions.

Chapter V
IS Livelihood Resource Center

SEC. 26. IS Livelihood Resource Center. — The IS Livelihood Resource Center shall be
established in every city/municipality to enhance access of assistance and support to
disadvantaged members particularly in remote rural areas.

For this purpose, the DTI, Technical Education and Skills Development Authority
(TESDA) and Technology and Livelihood Resouree Center (TLRC) shall develop livelihood
programs which will harness the skills of the IS members.

The aforesaid agencies shall conduct human resource development program and
management in the following areas:

(2) Adequate facilities and resources to render quality social service;

(6)-Opportunties for IS workers to grow and develop their potentials and experience a
sense of worth and dignity in their work;

(©) Mechanisms for democratic consultations;

(d) Upgrading of working conditions;

(€) Allocation of funds for the participation of IS workers in skills training and
workshops and other similar activities as part of their continuing advancement; and

SEC. 27. Functions of IS Livelihood Resource Center, — The IS Livelihood Resource
Center shall have the following functions:

(2) Conduct training program which will provide new ideas to IS players and upgrade the
technical and entrepreneurial skills of others who are already in the field;

(b) Implement consciousness-raising capability building and leadership training;

(©) Provide technical support and access credit to the informal sector engaged in micro-
entrepreneurship and cottage-fadustries or other productive work;

(a) Monitor the performance of the IS in the area


(©) Give advise and recommendations as to the strengthening and expansion of the IS
activities; and

(f) Provide services, to include but not limited to counseling, legal assistance, credit
assistance, and other services necessary for the furtherance of this Act.

The LGUs shall allocate at least P 100,000.00 annually for the operation and maintenance
of the Center. The local chief executives shall act as the primary overseers to the overall
operation of the Center.

Chapter VI
IS Comprehensive and Integrated Plan and Inter-agency Networking

SEC. 28. Comprehensive Plan. - The NEDA shall be tasked to formulate a Ten-Year
Comprehensive and Integrated Plan on the impact of globalization to the IS. It shall determine
and recommend the necessary safety nets needed by the IS to prepare them for the possible
effects of globalization.

SEC. 29, Inter-Agency Networking. - The DOLE shall provide for and lead the inter-
agency networking system among the different departments and instrumentalities of government,
‘should the same be required in the continuing efforts to protect the interests, rights and privileges
of 1S workers.

» The Council, in coordination with the DECS and CHED, shall design a comprehensive
and integrated program for IS members to give them opportunity to pursue free education.

The, cooperatives through the help of the DTI, TESDA and TLRC shall inform IS in the
tural of opportunities for market and technology access and the availability of livelihood training
and seminars to respond to IS needs and potentials.

The DSWD shall, within a period of one (1) year from the date of effectivity of this Act,
institute a program designed specifically to provide emergency services specifically to women
and the minor-aged IS workers who are in need of custody, shelter, healing, or medical,
psychological, legal and rehabilitative services.

‘The DSWD shall, upon the recommendation of the DOLE, effect the repatriation of
minor-ageéd IS workers who either voluntarily seek government protection against abuse and
exploitation or upon report or discovery of the same. The cost of such repatriation shall be borne
by the DSWD. The DOLE shall formulate the rules and regulations governing the emergency
repatriation of the same.

For this purpose, a Repatriation Fund is hereby created and established under the

administration and control of the DSWD in the amount of Five million pesos (P5,000,000.00) to
be taken from the President’s Social Fund.

Chapter VIL
General Rights

SEC. 30. Basic Rights. - Every member of the IS have the right to:


a) Participate in all spheres of society including the decision-making processes to fully
realize their role as agents and beneficiaries of people-centered development;

b) Be treated equally before the law;
©) Be provided with safe and healthful conditions in the workplace;

4) Be given equal access to education, skills training, and economic resources to develop
their self-reliance;

©) Be properly informed of the issues and concerns affecting the welfare and interests of
their sector;

f) Be protected from any form of discrimination, violence, sexual exploitation and abuse.

SEC. 31. Right to Medical Care and Humane Treatment. ~ Every worker has a right to
good quality health care, without any discrimination and within the limits of the resources
available for health and medical care. In the course of such care, his human dignity, culture,
convictions and integrity shall be respected.

The employer or any member of the household or institution shall, at all times, treat
his/her worker in a just and humane manner. In no instance shall abusive language, physical
violence or any act which debases, degrades or demeans the intrinsic worth and dignity of the
worker as a human being be used upon the latter.

SEC. 32, Right to Organize. — The State recognizes the right of IS workers to organize
themselves to promote their welfare and advance or safeguard their interests. Towards this end,
the government shall assist IS especially in the rural areas in establishing self-help organizations.

IS engaged in agricultural, manufacturing and service sector are encouraged to form
women’s cooperatives in every city/municipality to enable members to avail of credit assistance
and skills training which will help improve their quality of life.

‘Chapter VIII
Benefits and Incentives

SEC. 33. Medical/Health Insurance. — A worker, regardless of age and compensation
levels, shall be covered by a ftee medical/bealth insurance under the Philippine Health Insurance
Corporation (PHILHEALTH), and be entitled to afl the benefits provided for under the law:
Provided, however, That the worker has rendered at least one (1) year of continuous service in
the employment he/she is currently in: Provided, further, That if the worker intends to have a
medical/health insurance during his/her the initial months of his/her employment, he/she shalt
shoulder all the necessary premiums due him/her until the seventh (7th) month when the
employer sharés'fifty (50%) percent of the monthly required premiums.

For purposes of this Section, Fhe PHILHEALTH. shalt, within ninety (90) days from the
effectivity of this Act, promulgate guidelines for the mechanism of colfecting the aforesaid
contributions-especiafly for those contracted workers who are employed on daily, monthly or
pacquiao basis: The PHILHEALTH is hereby mardated to implement dit outreach program that
will facilitate the remittance of premiums by either the employer or the worker by whatever
means deemed feasible.


Pending the promulgation of pertinent implementing rules and regulations to this effect,
the employee shall receive the employers’ share or counterpart contribution and may remit said
amount together witlt his/her own share to the SSS.

SEC. 34. Social Security Coverage. - A worker, regardless of age and compensation
levels, shall be covered by social security and be entitled to all the benefits provided under
Republic Act No, 8282: Provided, however, That the worker has rendered at least one (1) year of
continuous service in the employment he/she is currently in: Provided, further, That if the
worker intends to become a member of the SSS or intends to continue his/her social security
contribution during his/her the initial months of his/her employment, he/she shall shoulder all the
necessary premiums due hinvher until the seventh (7th) month when the employer shares fifty
(50%) percent of the monthly required contribution.

For purposes of this Section, The SSS shall, within ninety (90) days from the effectivity
of this Act, promulgate guidelines for the mechanism of collecting the aforesaid premiums
especially for those contracted workers who are employed on daily, monthily or pacquiao basis.
The SSS is hereby mandated to implement an outreach program that will facilitate the remittance
of premiums by either the employer or the worker by whatever means deemed feasible.

Pending the promulgation of pertinent implementing rules and regulations to this effect,
the employee shall receive the employers’ share or counterpart contribution and may remit said
amount together with his/her own share to the SSS.

Chapter IX
INSTITUTIONAL MECHANISMS,

SEC. 35. Consultations with IS Organizations. — The Informal Sector Development
SD) Council, in coordination with other concemed agencies and LGUs, shalt conduct annual
Wational, regional and provincial consultations among the IS organizations to determine the
Specific issues and problems affecting the their sector. The Council shall channel IS concerns to
the appropriate agencies and provide the necessary recommendations to the:executive and
legislative departments.

SEC. 36, Establishment of IS Database. - The Council shall establish and develop a
centralized database system to effectively work policy formulation and policy concerns refative
to the IS. The databank shall include but not limited to the following:

a)-List of government and non-governmental organizations which provide educational,
socio-ecosiomit-and legal services to the IS;

b) Inventory of upheld and pending cases involving the IS activities;

°) So Statistical profile of the various IS classified according to aetivities, involvement and
other statistital information;

‘d) Database of the netds and problems of women and shildren in the £S nationwide; and
2) Colttpilation of existing laws and programs affecting the interest and welfare of the IS.

. _ The public shall be awed to have access.to the said data provided that they shall abide
with the regulation’ that will be set by the inter-agency committee.

Chapter X
‘Benefits to Participating Private Sector


SEC. 37. Incentives to Private Sector. ~ The national government shall implement a
mechanism which shall give incentives and benefits to private sector organizations participating
ina national effort to advance the interest and welfare of the IS.

The Department of Finance in coordination with the Bureau of Internal Revenue shall
promulgate guidelines for the effective implementation of this Section.

TITLE
IS WORKERS ENTERING INTO CONTRACTED EMPLOYMENT

ter I

Requisites for Contracting Employment

SEC. 38, Employment Contract, — All working arrangements entered into by IS workers
shall be covered by a written employment contract, in a language or dialect understood by both
employer and worker, duly signed by both the employer and the worker. Under this Act, the
employer and the worker may enter into either one of the following three (3) working
arrangements: Daily Basis, Monthly Basis, or Pacquiao Basis.

In every contract entered into each contracting party shall be provided with a full set of
the duly signed employment contract, the basic provisions of which shall include the following:

(a) working arrangement/mode;
(b) period/duration of employment;

-(¢) compensation and mode of payment;

(@) computation of contributions for social security and medical insurance;
(©) computation of leave deductions;

(f) duties and responsibilities;

(g) working hours and day-off schedule;

(b) living quarters or sleeping arrangements (for live-in workers)

In cases wherein employment ofa worker of minor age are allowed, the said employment
contract shall be signed on his/her behalf by either parent or legal guardian, with the expressed
written consent of said minor.

in cases wherein employment of illiterate worker are allowed, the said employment
contract dhall be explained to the worker concerned and attested to by a representative from the
LGU. oran elected Barangay official in the city or municipality where the worker is designated to
work,

SEC. 39, Medical Certificate as Pre-requisite for Employment. - A medical certificate
attesting to ttie-physical and mental fitness of an applicant for work must be secured from a
licensed physician as a pre-requisite for employment, the cost of which shall be for the account
of the employer:

Chapter II
IS Workers of Minor Age

SEC. 40, AllawableBaiployment of Worker of Minor Age, — Children fifteen (15) years
up to seventeen (17) years ofage may be employed: Provided, however, That’ parental consent
be presented and attested by any-tepresentative from the LGU or quly shred Berger official


where the productive employment is to be done. In no instance, however, shall children below
fifteen (15) years of age be engaged in whatever form of productive service.

Unless expressly employed as kasambahay with duly executed contract of employment,
children who live with their parents at the employer’s residence or those whose sustenance or
education is being provided for by the homeowner, shall not be considered as kasambahay.

Worker of minor age shall not be allowed to render work for more than ten (10) hours a
day, five (5) days per week, exclusive of one (1) hour breaks each for breakfast, lunch and
dinner.

SEC. 41, Custody over Minor-aged individual, — Should a minor-aged worker refuse to
be repatriated against the recommendation of the DSWD, said individual may be placed under
the custody and care of the DSWD or that of a duly recognized and accredited non-government
organization, or placed in a suitable employment.

Chapter DI
Standardized Wage Rate

SEC. 42, Standardized Wage Rate. — Pursuant to the provisions of this Act, a
standardized wage rate is hereby set forth:

For Kasambahay
(a) 4°—6 class municipalities  - Below P700.00
{b) 1*-3" class municipalities & - P 800.00 —P 1,200.00
Chartered & Component Cities
4c) National Capital Region - Pt, 800,00 — P 2,200.00

Sor Employed Worker
(a) 4°—6" class municipalities -
Skilled: P 90.00 — P 120,00
Unskilled: —_P 60,00-P 80.00

(b) 1*-3" class municipalities & Chartered & Component Cities
Skilled: P 130,00 —P 180.00
Unskilled: — P 90.00—P 120.00

(©) National Capital Region
Skilled: P 230.00 — P 260.00
Unskilled: P 190.00 — P 220.00

Provided, That a worker who has been contracted work in other city/municipality other
than the place of residency shall be entitled for the daily wage rate of the city/municipality where
he/she actually works: Provided, further, That a worker who has contracted employment outside
the city/municipality of residency shall be afforded free assistance and support in the form of
housing and food by the contractor/employer.

In the case of a worker who works on monthly or pacquiao basis, the wage rate to be
applied shall be based in the wage rate of the city/municipality where he/she actually works.
He/she shall also be afforded free housing and support during the tenure of the contract.

In no instance, however, shall workers of minor age be deprived of the above
standardized wage rate system set forth in this Act.


SEC. 43, Payment of Wages. — Payment of wages shall be made directly to the worker,
at least once every two (2) weeks or twice a month. No deductions from said wages shall be
made by the employer except those provided by law. The expressed written consent of the
worker shall first be secured before any deduction is made.

Chapter IV
Prohibited Acts

SEC. 44, Prohibition Against Night Work, — Worker of minor age shall not be allowed
to render work between ten o’clock in the evening and six o’clock in the morning of the
following day.

SEC. 45, Prohibition Against Work to be Undertaken. ~ Worker of minor age shall not
be allowed to render work beyond their mental and physical capabilities.

SEC. 46. Prohibition Against Bonded Labor. - A worker shall not be allowed to use
his/her future services as collateral for any loan or advances made or to be made by said worker
with the employer. Likewise, no employer shall be allowed to bind the worker to his/her
continued employ as a form of payment for any loan or advances which he/she may have made
with the employer. Should there be an outstanding loan incur and he/she decides to unilaterally
terminate the contract of employment, said loan or advance shall be paid by himv/her to the
emploYer under terms and conditions specified in a duly executed promissory note between
parties.

Skc. 47. Prohibition Against Labor Sub-Contracting. — In no instance shall the
employer sub-contract the services of a worker to any third party, unless such activity falls
within the purview of an employment arrangement for which the necessary permits and licenses
had been priorly secured.

SEC. 48. Prohibition Against Recruitment and Finders Fees, — Regardless of whether
the worker was sourced either through an employment agency or a third party, said worker shall
neither be charged nor levied a share in the recruitment fees or finder’s fees by the
aforementioned employment agency or third party.

SEC. 49. Prohibition Against Hazardous Work and Conditions. — Worker of minor age
shall not be employed in any hazardous work, activity or undertaking, and neither shalll he/she be
exposed to hazardous working conditions.

For purposes of this Section, hazardous work or conditions shall include, but not limited
to the following:

(2) any work, employment or activity which exposes the worker to physical, emotional or
sexual abuse;

(b) any work which involves manual handling or transport of heavy loads;

(©) any work in an unhealthy environment which exposes household helpers to hazardous
substances, agents or processes, or to temperatures, noise levels, or vibrations damaging to their
health;

(d) any work which requires the household helper to render services for long periods of
time or during late nights;

(©) any or all forms of slavery or practices similar to slavery, such as the sale and
trafficking of household helpers, forced or compulsory labor, debt bondage and serfdom;


(8) any use, procuring or offering of the household helper for prostitution or pornography;

(g) any use, procuring or offering of the household helper for the commission of any
offense or crime, particularly for the production and trafficking of narcotic drugs and substances
as defined in the Dangerous Drugs Act;

(h) any other type of work or activity which, by its nature or the circumstances in which it
is carried out, is likely to jeopardize the health, safety or morals of the household helper; and

(i) any other type of work; activity, condition or undertaking that may be hereinafter be
defined as hazardous by the Department of Labor and Employment.

SEC. 50. Prohibition Against Interference and Coercion. — Any person is prohibited
from committing any of the following acts of interference and coercion:

(@) To prevent a worker from upholding his/her other basic rights;

(b) To prevent workers from joining or assisting organizations or unions for purposes not
contrary to law, in order to defend and protect their mutual interest and to obtain redress of
grievances through peaceful concerted efforts;

(6) To prevent a worker from carrying out his/her duties and functions in an organization
or union, or to penalize the same for any lawful action performed in that capacity;

(@ To make calculated harassment and interference with the intention of intimidating or
preventing the social worker from performing his/her duties and functions;

(©) To make calculated harassment against, or to transfer, penalize or terminate the
services of a worker who is carrying out his/her function or role for and in behalf of his/her
employer; and

(g) To perform acts calculated to diminish the independence and freedom of a social
worker’s union or organization to direct its own affairs.

Chapter V
Rights and Benefits of Employed IS Workers

SEC. 51. Right to Wages Earned. — The employer shall pay directly to the worker of
minor age, any and all wages, remuneration or compensation earned by him/her during the
period of his/her employment.

No parent, guardian or relative shall be allowed to borrow against the compensation of
the his/her relative-worker of minor age without the express written consent of the concerned
relative-worker, Neither shall the worker of minor age be mandated to work in payment of a
loan or liability incurred by a parent, guardian or relative.

SEC. 52. Right to Privacy and Confidentiality, - The employer shall respect the privacy
of his/her worker during the course of the latter's rest periods. This right to privacy shall extend
to any and all forms of personal communications, including letters of correspondence issued or
received, and be allowed communications coursed through the private telephone of the
employer: Provided, That any additional expense incurred in the course of communication shall
be borne by the worker and shall be deducted, after the employer’s due notice to the worker of
the amount incurred due to specific reasons, from the receivable wage of the worker,


The State, further, guarantees the protection of the right of the worker to communicate
with relatives and other persons and to receive visitors subject to reasonable limits prescribed in
the employment contract agreed and entered into by both the employer and the worker.

The employer shall allow the worker access to outside communication, both though letter
or the private telephone of the household, especially in instances of personal or family
emergencies: Provided, that costs incurred in making the telephone call shall be for the account
of the worker.

SEC. 53, Access to Education and Training. — A worker shall not be deprived of formal
or non-formal education. In cases where he/she is productively employed, he/she shall be
allowed to attend or pursue literacy programs during day-off or in any other time with the
consent of the employer.

The DECS or CHED, whichever office is applicable, shall extend its services of Study-
Now, Pay-Later Program to the worker in the informal sector,

The employer may also extend scholarship programs to a worker and be reimbursed out
of deductions from the worker’s monthly compensation which shall, at all times, be no greater
than fifty (50.0%) percent of the worker’s monthly compensation. The time spent by a worker
during the conduct of the said education or training, including the time spent going to and
coming from the training shall be counted as part of the worker’s hours of work.

SEC. 54. Access to Lawful Third-Party Mediation, - The employer shall provide all
worker the names, addresses and telephone numbers of the designated liaison offices of the
following:

(a) DTI;

(b) DOLE;

(©) the Barangay office where he/she is productively working; and,

(@) duly registered non-government organizations accredited to mediate in disputes of
their sector.

The employer shall further guarantee the worker access to all means of communication
for the purpose of contacting any of the above-enumerated institutions.

SEC. 55. Provision of Basic Necessities, - The employer shall provide for he basic
necessities of a live-in worker which shall include:

{a) A minimum of three (3) full meals per day;
{b) Humane, private and safe sleeping quarter;
(@) Emergency medical support and assistance;
(d) A safe and non-health hazard workplace;

In no instance shall the employer be allowed to withdraw or hold dn abeyance the
Provision of these basic necessities as punishment or disciplinary action to $e meted out to the
worker.

BEC. 56. Normal Hours of Work, — Cognizant of the peculiarities of the relationship
betivéen the employer and the IS worker, the normal hours of work shall be set at tert (10) hours
per day, exclusive of one (1) hour breaks each for breakfast, lunch and dinner. The worker shall
be allowed at least eight (8) hours of continuous rest per day otherwise any work done by
hinv/her beyorid the normal hours of work per day shall be duly compensated.

SEC. 57. Regular Working Days, — No worker shall render work for more than six (6)
days per week, While the specific day of the week set aside as rest day for the worker may be
stipulated in the employment contract, the same may be changed for another day of the week


upon the mutual agreement of the employer and the worker as the exigencies of the work may
dictate.

SEC. 58. Longevity pay. — A longevity pay equivalent to five per centum (5%) of his/her
latest monthly basic pay shall be paid to a worker for every two (2) years of continuous and
satisfactory service rendered.

SEC. 59. Clothing Allowance. — A worker shall be entitled to a minimum of One
Thousand pesos (P1,000.00) clothing allowance annually: Provided, That the worker has
rendered at least one (1) year of continuously service in the employment he/she is currently in.

SEC. 60. Vacation Leaves. — A worker who is employed for one (1) year shall be
entitled to a fourteen (14) day vacation leave with pay, in addition to the one (1) day per week
designated as the rest day. Said leave may only commence at the end of the first year of
employment, and shall not cumulate from year to year.

SEC. 61. Maternity Benefits. A female worker who is employed for one (1) year shall
be entitled to maternity benefits.

SEC. 62. 13 Month Pay. - A worker shall be entitled to a 13 month pay equivalent to
one (1) month's basic salary which shall be paid to the worker not later than the 16" of
December of every year: Provided, however, That the worker has reached the required minimum
residency. Otherwise, the worker shall be entitled to receive a 13" Month Pay on pro-rated basis

SEC. 63. Allowing subcontracting. — A worker may enter into subcontractual
employment or may accept subcontractual jobs ftom any other enterprise or firm joining or may
join productive employment through a cooperative or consortium: Provided, however, That the
enterprise or firm or cooperative or consortium shall be mandated to implement the specific
provisions of this Act in regard to worker’s benefits: Provided, further, That where a worker
subcontracts jobs between and among other worker providing for the benefits due hin/her shall
not be obligated upon the party who contracted the job.

SEC. 64, Pre-Termination of Contract. The employer may, at his/her own discretion,
terminate the services of the worker: Provided, however, That said employer provides the sworker
with at least fifteen (15) days notice of termination and termination pay equivalent to at least one
half (1/2) month’s salary. In lieu of the fifteen (15) day notice of termination, the employer may
immediately terminate the services of the worker: Provided, That said employer provides the
worker termination pay equivalent to one (1) month's salary

The employer may, for valid or just cause of loss of confidence, terminate the services of
the worker prior to the expiration of the contract without indemnifying the latter with termination
Pay.

Should the worker decide, on his/her own volition, to unilaterally leave the workplace
prior to the expiration of the contract period, said worker shall forfeit any separation pay that
may be due hinv/her.

SEC. 65, Extent of Duty, The employer shall not require a worker to perform any tdék
or work outside the assigned workplace for the service or benefit of another without the latter’s
consent and payment of just compensation.

SEC. 66, Automatic Salary Increases. — The contract of employment executed by dHd
between the employer and the worker shall provide for an annual salary increase, the amount of
which shall be determined by mutual agreement of the parties.

SEC. 67. Deployment Expenses. — Deployment expenses of a worker, including
‘tHansportation and agency fees, shall be shouldered by the employer.


Title 11
KINAL PROVISIONS

“SEC. 68, Penal Provision. - Any person who shall willfully interfere with, restrain or
coerce-a social worker in the exercise of his/her rights or shall in any manner commit any act in
violation of any of the provision of this Act shall, upon conviction, be punished by a fine of not
less than Ten thotisarid pesos (P10,00000) but not more than Twenty thousand pesos
{P2,000.00) or imprisonment of one (1) year to six (6) years or both fine and imprisonment at
the discretion of the court.

if the offender is a public official, the court in addition to the penalties provided in the
preceding paragraph, may impose the additional penalty of disqualification from public office.“

. In the case of a private institution/company found to be violating any. provision ofthis
Act, it. shail be,eubject to a penalty ranging from suspension of license to revocation of sugh, at
the discretion of the court.

($BG09. Separability Clause, — If any provision of this Act is declared unconstitusogal
or firvalid;-#hespssvisions not affected shall continue to be in full force and effect.

SEC.78. Repealing Clause. — All laws, decrees, orders, rules and regulations of ater

issuances inconsigtent with the provisions of this Act are hereby repealed, amended or modified

+ SECSI-AGectivity. — This Act shall take effect fifteen (15) days after its publication in
at Jepst two (ynemrepapers of general circulation or the Official Gazette, whichever comes fist.

Approved,