Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

THIRTEENTH CONGRESS
First Regular Session

HBNO.__ 1359
Introduced by Rep. Roseller L. Barinaga

EXPLANATORY NOTE

This bill seeks to provide @ Magna Carta for the Workers in the Informal Sector.

The informal sector comprises almost half of the country’s total workforce. They include
among others the micro-entrepreneurs, the houschelps, small farmers, illegal sidewalk
vendors, hawkers, keingeros (or the so-called slash-and-burn dwellers), and other groups of
people who live and ear 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), caming 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 at all these sctivities only proves that there are just a lot of things to be
pursued if indeed the goverment is determined 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 Workers in the Informal Sector, therefore, e1 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 viewof this, the early passage of this bill is eamestly sought.

sentative
District, Zamboanga del Norte


Congress of the Philippines )

Thirteenth Congress )
First Regular Session )
HOUSE OF REPRESENTATIVES

HBNO. 13 59

Tntroduced by Rep. Roseller L. Barinaga

AN ACT
PROVIDING FOR A MAGNA CARTA FOR THE WORKERS IN 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:

TITLEI
GENERAL PROVISIONS

Chapter I
Framework and Principles

SECTION 1. Short Title. This Act shall be known as the “Magna Carta for the
Workers in 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
1d low level income eamers 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:

(2) 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, and

@) 2 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 minirmum
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 sce 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.

Ih 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 govemment programs for the
informal sector. In this regard, the DTI, in consultation with the concemed goverment
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 onganization, establishment, strengthening and expansion of the various business
activities or enterprises under the informal sector in the barangay level preferably unified
under a municipal/city, provincial, regional and national federation/essociation.

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

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

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

(©) 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 (yaya) who provide daily service to @ single, specific household, either on a live-
in or live-out besis. In common term, kasambahay is called houschold 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.


(O) 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 (10,000.00) 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
Pane (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 Netional
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.

(0 Self-employed worker refers to any person, whether male or female, who is to be

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, Isundry women and household
helpers hired on a day-to-day besis, provided thst they do not report for work to a single
household forfour (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 It
‘Coverage, Qualifications and Accreditation

SEC. 5. Registration; Payment. IS 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. IS 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:

@) 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

© Those with ne ases before financing of more than P400,000.00 to
P 7,500.00 to 10,000.00... 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
of 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 members of the informal sector who are
operating, employed or working either as micro-entrepreneur, 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:

@ Micro-entrepreneurs:
(@ sidewalk vendors, fish vendors,
Gi) small scale farmers and fisherfolks,

(b) Employed/Self-Employed:
@) local domestic helpers or kasambahay,
Gii) barbers, menicurists, pedicurists;,
iii) pedicab/tricycle drivers;
Gy) 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 sny 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 II
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 sppropriated
proportionately in accordance with the corresponding intemal revenue allocation (IRA) of
respective LGUs. Such allocation shall 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 shall be
established in every city/municipality for the their supervision and management subject to
accounting and suditing 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 @ 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-concemed,

(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
and incorporate them in their respective provincial, city and municipal development plans.

SEC. 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 the individual income tax of the members thereof.

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

SEC. 18 Forfeiture of Benefits. All the exemptions and other benefits herein
provided shall, after due notice and 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,
provided such IS worker or business activity or enterprise is registered and accredited within
five (5) years from the effectivity of this Act.

Chapter IV
Informal Sector Development Council

SEC. 20. Creation of an Informal Sector Development Council; Mandate. There is
hereby created an Informal 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 es 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 DIT as

irman, and may elect from among themselves 8 Vice-Chairman to preside over the
‘Council meetings in the absence of the Chairman. The members shall be the following:

@) Director General of the NEDA;

(®) 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 department's annual appropriation.

‘SEC. 22. Mandate of the Council. The Council shall have the following mandate:

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

(©) 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,

(@® 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,

© 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 thet shall ensure their active participation and involvement,
and

( 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, from time to time, call upon the participation of any government agency or
bureaucracy in its deliberations especially when such agency is directly or indirectly
concemed 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 meterials 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,

@ 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

(© To perform ad hoc 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
esteblish 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 DIT, Technical Educstion and Skills Development Authority
(TESDA) and Technology and Livelihood Resource Center (TLRC) shall develop livelihood
programs which will hamess the skills of the IS members.

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

(@ Adequate facilities and resources to render quality social service;

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

(©) Mechanisms for democratic consultations,
(@ 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:

@ 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 lesdership training,

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

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

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

(© 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

1S 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,
Tights and privileges of IS 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 rural of opportunities for market and technology acess 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-eged 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-aged 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
bore 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 VII
General Rights

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

8) 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,

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

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 @ 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

1S 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 VII
Benefits and Incentives

SEC. 33. Medical/Health Insurance. A worker, regardless of age and compensation
levels, shall be covered by a free medical/health insurance under the Philippine Health
Insurance Corporation (PHILHEALTH), and be entitled to all 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 shall shoulder all the necessary premiums due hinvher until the seventh (7th) month
when the employer shares fifty (50%) percent of the monthly required premiums.

For purposes of this Section, The PHILHEALTH shall, within ninety (90) days from
the effectivity of this Act, promulgate guidelines for the mechanism of collecting the
aforesaid contributions especially for those contracted workers who are employed on daily,
monthly or pacquiao basis, The PHILHEALTH 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.

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 him/her until the seventh (7th) month when the
employer shares fifty (50%) percent of the monthly required contribution.

For purposes of this Section, The SSS shell, 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, monthly 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. 38, Consultations with I$ Organizations. The Informal Sector Development
SD) Council, in coordination with other concemed agencies and LGUs, shall conduct
annual national, regional and provincial consultations among the IS organizations to
determine the specific issues end problems affecting the their sector. The Council shall
channel IS concems 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
Telative to the IS. The databank shall include but not limited to the following:

8) List of govemment and non-governmental organizations which provide
‘educational, socio-economic and legal services to the IS;

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

¢) Statistical profile of the various IS classified according to activities, involvement
and other statistical information;

4) Database of the needs and problems of women and children in the IS nationwide;
©) Compilation of existing laws and programs affecting the interest and welfare of the

The public shall be allowed to have access to the said data provided that they shall
abide with the regulations 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 in a national effort to advance the interest and welfare of the IS.

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


TITLED
IS WORKERS ENTERING INTO CONTRACTED EMPLOYMENT

Chapter 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 @ 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 besic 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;

© duties and responsibilities;

(B) working hours and day-off schedule;

(h) living quarters or sleeping arrangements (or live-in workers)

In cases wherein employment of a 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.

Ih cases wherein employment of illiterate worker are allowed, the said employment
contract shall be explained to the worker concerned and attested to by a representative from
the LGU or an 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 the 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 IL
IS Workers of Minor Age
SEC. 40. Allowable Employment of Worker of Minor Age. Children below sixteen

(16) years of age may be employed: Provided, That a parental consent be presented and
attested by any representative from the LGU or duly elected barangay official where the


productive employment is to be done: Provided, further, That the provisions of the UN
Convention on the Worst Forms of Child Labor be taken into consideration in the course of
employing such children.

In no instance, however, shell 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.

Workers 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 fr breakfast, lunch

SEC. 41. Custody over Minor-aged individual. Should 2 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 II
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

@ 4-6" class municipalities  - Below P1,000.00

(®) 1*-3" class municipalities &  - P 1,001.00 — P 1,800.00

Chartered & Component Cities

(© National Capital Region - Pl, 801.00-P 2,500.00
For Employed Worker

(@ 4*— 6% class municipalities :

Skilled: P'90.00-P 120.00

Unskilled: — P.60.00-P 80.00

(b) 1*-3 class nnnicipalities & 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
himvher to the employer under terms and conditions specified in a duly executed promissory
note between parties.

SEC. 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 shall
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:

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

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

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

@ any work which requires the houschold 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;

© any use, procuring or offering of the household helper for prostitution or
Pornography,

(©) 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

@ 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:

@ Toprevent a worker from upholding his/her other basic rights;

(©) 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;

(©) 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

) 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. $1. 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 hisher relative-worker of minor age without the express written consent of the
concemed 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 communicstions, 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 bome by the worker and shall be deducted, after the
employer's due notice to the worker of the amount incurred due to specific reason/s, 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 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
‘8 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:

e) DTI;

() DOLE;

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

@ duly registered non-govemment 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. $5. Provision of Basic Necessities. The employer shall provide for the basic
necessities of a live-in worker which shall include:

(@) Aminimum of three (3) full meals per day;

(b) Humane, private and safe sleeping quarter.

(c) Emergency medical support and assistance,
@) Asafe and non-health hazard workplace;

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

SEC. 56. Normal Hours of Work. Cognizant of the peculiarities of the relationship
between the employer and the IS worker, the normal hours of work shall be set at ten (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 hirw/her beyond the normal hours of work per day shall be duly compensated.

SEC. 57. Regular Working Days. No worker shell 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. $8. 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 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 from any other enterprise or firm joining or
may join productive employment through @ 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
him/her shall not be obligated upon the party who contracted the job.

SEC. 64. PreTermination of Contract. The employer may, at his/her own
discretion, terminste the services of the worker: Provided however, That said employer
provides the worker 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 hinvher.

SEC. 65. Extent of Duty. The employer shall not require a worker to perform any
task 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 and
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
transportation and agency fees, shall be shouldered by the employer.


TITLE
FINAL 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 violstion of any of the provision of this Act shall, upon conviction, be punished by a fine
of not less than Ten thousand pesos (P10,000.00) but not more than Twenty thousand pesos
(20,000.00) 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 of this
Act, it shall be subject to a penalty ranging from suspension of license to revocation of such,
at the discretion of the court.

SEC. 69. Separability Clause. If any provision of this Act is declared unconstitutional
or invalid, the provisions not affected shell continue to be in full force and effect.

SEC. 70. Repealing Clause. All laws, decrees, orders, rules and regulations or other
issuances inconsistent with the provisions of this Act are hereby repealed, amended or
modified accordingly.

SEC. 71. Effectivity. This Act shall take effect fifteen (15) days after its publication in

at least two (2) newspapers of general circulation or the Official Gazette, whichever comes
first.

Approved.