Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
1" Regular Session

House Bill No. 192

Introduced by Representative EDVIC G. YAP

EXPLANATORY NOTE

The 1987 accords the protection of the rights and promotion of the welfare of
workers. The said constitutional mandate is all-encompassing, which extends even
to informal laborers.

The Gig Economy has been growing exponentially as freelancing became a trend
amongst Filipinos—being one of the top contributors in the national coffers,
especially during the COVID-19 pandemic. In the data gathered by PayPal in 2018
for the Global Freelancer Insights Report, there are about 2%, or 1.5 million to 2
million Filipino freelancers in the country. Furthermore, the 2019 report by the CNBC
shows that the Philippines ranks 6" as a country with the fastest-growing market for
freelancers, showing a 35% growth in freelance earnings.

In spite of this contribution, freelance workers belong to the informal sector of labor.
Thus, they remain unregulated and unprotected from labar exploitation due to lack
of enabling legislation that will strengthen their rights and promote their welfare.
Issues on taxation, security of tenure, and just compensation remain to be persistent
in this field.

To mitigate these persisting issues that tremendously affect and violate our freelance
workers, this proposed measure aims to institutionalize the provision of a written
contract between the hiring party and freelance worker, including the mandatory
grant of hazard pay and night differential pay in exchange for the freelancer’
service. In addition, this bill also establishes a set of penal sanctions against the
unlawful practices of the hiring party.

In view of the foregoing, approval of this bil is earfestly sought.

HON. EDYIC G. YAP


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
1" Regular Session

192

House Bill No.

Introduced by Representatives EDVIC G. YAP

AN ACT
PROVIDING PROTECTION AND INCENTIVES FOR FREELANCE WORKERS

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

CHAPTER I
GENERAL PROVISIONS

SECTION 1. Short Title. This Act shall be known as "Freelance Workers
Protection Act."

SEC. 2. Declaration of Policy. - Pursuant to Article Il, Section 18, and Article
XIII, Section 3 of the Constitution, it is hereby declared the policy of the State to
protect the rights of workers, promote their welfare, and ensure their entitlement to
humane conditions of work and just share in the fruits of production. Towards this
end, the State shall recognize the right of freelance workers to protection from late or
nonpayment of fees for services rendered.

SEC. 3. Definition of Terms. - As used in this Act:

a) Freelance worker refers to any natural person or entity composed of no more
than one (1) natural person, whether incorporated under the Securities
and Exchange Commission, registered as a sole proprietorship under the
Department of Trade and Industry (DTI) or registered as self-employed
with the Bureau of Internal Revenue (BIR), who is hired or retained to
provide services, in exchange for compensation, as an independent
contractor to do work according to one’s own methods and without being
subjected to the control of the hiring party, except only as to the results of
the work;

b) Hiring party refers to any person or entity that obtains or retains the
services of a freelance worker; and


©) Retaliation refers to any act reasonably likely to prevent a freelance worker
from further being offered freelance work and contracts.

SEC. 4. Written Contract. - Any hiring party obtaining or retaining the
services of a freelance worker shall execute a written contract with such freelance
worker before said services are rendered. The hiring party and the freelance worker
shall each retain a signed copy of the contract.

The contract shall be written in plain language, understood by both parties. It
shall include, at the minimum, the following:

a. Itemization of all services to be provided by the freelance worker;

b. Details of compensation and other worker's benefits, including rate, method
and schedule of payment;

. Period of employment;

. Grounds for breach of contract on the part of the hiring party and of the

. freelance worker; and
‘Any other condition, term or clause that the Department of Labor and
Employment (DOLE) may direct, subject to the provisions of this Act.Details
of compensation and other worker's benefits, including rate, method and
schedule of payment;

mpao

The contract must state the necessary personal circumstances of the freelance
worker, such as but not limited to the freelance worker’s name, address and the
worker's Tax Identification Number, No modification of the terms of the contract
shall be enforceable unless signed by both the hiring party and the freelance worker.

SEC. 5. Down Payment. - An initial partial payment for the contracting, of
services of the freelance worker shall be made upon engagement, which shall be not
less than thirty percent (30%) of the contract price.

SEC. 6. Night Shift Differential. - Freelance workers who are required to be
physically present in the workplace, or those on field assignments, shall be paid a
night shift differential of not less than ten percent (10%) of their regular
compensation for each hour of work performed between ten o’clock in the evening
and six o’clock in the morning, unless there is a more favorable fee stipulated in the
contract.

SEC. 7. Hazard Pay. - All freelance workers deployed in dangerous areas
such as strife-torn or embattled locations, distressed or isolated stations, prison
camps, mental hospitals, radiation-exposed clinics, laboratories or disease-infested
areas, or in areas declared under a state of calamity or emergency for the duration of
deployment and unduly exposes them to great danger, contagion, radiation,
occupational risks or perils to life, shall be compensated with a hazard pay


equivalent to at least twenty-five percent (25%) of the total payment for the period of
such deployment as agreed upon in the contract, unless there is a more favorable fee
stipulated therein.

SEC. 8. Unlawful Practices. - It shall be unlawful for any hiring party to:

a. Engage with a freelance worker without a written contract;

b. Pay the compensation due the freelance worker later than fifteen (15) days
after the date of payment of compensation stated in the written contract or
after the rendition of services in cases where there is no written contract;

c. Require as a condition of payment of compensation at any time after a
freelance worker has commenced rendition of services, that the latter
accept less than the specified contract price; or

d. Commit any act of retaliation against any freelance worker for:

1. Opposing any practice prohibited by this Act;

2. Filing a complaint authorized under this Act;

3. Testifying or assisting in any proceeding authorized under this Act;

4. Commencing a civil action alleging a violation of this Act;

5. Assisting the DOLE in an investigation commenced pursuant to this
Act; or

6. Providing information to the DOLE pursuant to the terms of a
mediation or conciliation agreement under this Act.

SEC. 9. Civil Penalty. - A person who commits any of the unlawful practices
enumerated in Section 7 of this Act shall be punished by a fine of not less than Fifty
thousand pesos (Php 50,000.00) but not more than Five hundred thousand pesos
(Php 500,000.00).

CHAPTER II
AGENCY ENFORCEMENT AND ADMINISTRATIVE PROCESS

SEC. 10. Complaints. - Any person or such person's authorized representative
aggrieved by a violation of this Act may file a complaint with the DOLE, through the
Undersecretary for Workers with Special Concerns, without prejudice to the filing of
civil action in appropriate cases.

SEC. 11. Prohibition Against Forum Shopping. - When a civil action has been
tiated in a court of competent jurisdiction arising from any violation of this Act, a
breach of contract, or any similar claim at law or equity arising out of the same
transaction or series of transactions, no other case involving the same cause of action
shall be filed with the DOLE

SEC. 12. Investigation. - Upon receiving a complaint alleging a violation of
this Act, the DOLE shall notify the respondent in writing and investigate such


complaint in a timely manner. Within fifteen (15) calendar days of receiving such
written notification, the respondent shall provide the DOLE with a written response
and such other information as the DOLE may request. The DOLE shall notify each
complainant in writing, not less than thirty (30) calendar days after the complaint is
filed, of the status of the complaint and any resulting investigation.

SEC. 13. Mediation and Conciliation. - The DOLE may, at any time after the
filing of a complaint, attempt to resolve the complaint by any method of dispute
resolution, including mediation and conciliation. If a conciliation agreement is
entered into, the DOLE shall embody such agreement in an order and serve a copy of
such order upon all parties to the conciliation agreement.

CHAPTER IL
CIVIL ENFORCEMENT

SEC. 14. Notice of Violation and Order of Payment. - If, as a result or an
investigation of a complaint or an investigation conducted upon its own initiative,
the DOLE finds cause to believe that a violation of this Act has occurred, it shall
issue a notice of violation to the respondent and order the corresponding payment of
compensation due to the prevailing party.

SEC. 15. Violation of Order of Payment. - The order of payment shall include
an interest rate of six percent (6%) per annum which shall be awarded to the
prevailing party in case the violation continues.

SEC. 16. Civil Action. - Except as otherwise provided by law, any person
claiming to be aggrieved by a violation of this Act has a cause of action to file a
complaint in a court of competent jurisdiction for damages, injunctive relief and such
other remedies as may be appropriate without prejudice to the filing of a criminal
action in appropriate cases. The prevailing party shall be entitled to an award of
reasonable attorney's fees and costs.

No person claiming to be aggrieved by a violation of this Act may bring a
civil action in a court of competent jurisdiction if such aggrieved person or one's
representative has filed a complaint with the DOLE pursuant to Chapter | of this Act
based upon the same transaction or series of transactions, unless the complaint has
been terminated without prejudice to a subsequent civil action.

SEC. 17. Non-Waiver. - Except as otherwise stipulated by law, any provision
of a contract or agreement claiming to waive rights provided under this Ac
against public policy and shall be null and void.

SEC. 18. Coverage. - This Act shall apply only to contracts or agreements
entered into upon the effectivity of this Act.


CHAPTER IV
TAXATION

SEC. 19. Tax Relief. - Freelancers, as defined under this Act, shall be entitled
to tax relief within the threshold provided under the National Internal Revenue
Code of 1997, as amended, and Republic Act No. 9178, otherwise known as the
“Barangay Micro Business Enterprises (BMBEs) Act of 2002.”.

SEC. 20. Special Assistance. - Every BIR Revenue District Office shall
designate a lane or a special assistance desk that shall be manned by an officer who
shall assist freelance workers on their inquiries and in complying with the
processing of documents, including the registration requirement under this Act.

CHAPTER V
FINAL PROVISIONS

SEC. 21. Report. - One (1) year after the effectivity of this Act, and every year
thereafter, the Secretary of Labor and Employment shall submit a report to the
Committee on Labor and Employment of the House of Representatives and the
Committee on Labor, Employment and Human Resources Development of the
Senate of the Philippines regarding the effectiveness of the provisions of this Act in
improving freelance contracting and payment practices. Similarly, the DOLE shall
submit the report to the Philippine Creative Industries Development Council,
through its Creative Workers’ Welfare Standing Committee. The report shall include,
at the minimum, the number of complaints received, investigations initiated and
notices issued by the DOLE on violations of this Act, and complaints settled by
mediation or conciliation.

SEC. 22. Information Campaign. - The DOLE shall, in coordination with the
DTI, BIR, local government units and other relevant agencies, initiate a program
with the objective of informing freelance workers of their rights and obligations, the
proper procedure of registering as a taxpayer, and the modes of legal redress as
provided for in this Act, and in other laws and regulations.

SEC. 23. Suppletory Application. - The provisions of Republic Act No. 11058,
entitled “An Act Strengthening Compliance with Occupational Safety and Health
Standards and Providing Penalties for Violations Thereof” shall be applied
suppletorily to this Act.

SEC. 24. Implementing Rules and Regulations. - Within fifteen (15) days from
the effectivity of this Act, the Secretary of Labor and Employment shall, in
coordination with the BIR and other relevant agencies, issue the rules and
regulations from the implementation of this Act


SEC. 25. Separability Clause. - If any part, section or provision of this Act is
declared invalid or unconstitutional, the other provisions not affected by such
declaration shall remain in full force and effect.

SEC. 26. Repealing Clause. - All laws, decrees, orders, rules and regulations,
or other issuances or parts thereof inconsistent with the provisions of this Act are
hereby repealed, amended or modified accordingly.

SEC. 27. Effectivity. - This Act shall take effect after its publication in the
Official Gazette or in a newspaper of general circulation.

Approved,