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House of Representatives PS bare, 16

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SEVENTEENTH CONGRESS ‘

First Regular Session

HOUSE BILL NO.4862
INTRODUCED BY CONGRESSMAN ALFRED VARGAS

EXPLANATORY NOTE

As every parent aspires for his child to complete a college degree course, he also
expects his child to immediately get proper employment and a healthy compensation
package once he graduates from a college, university, or an accredited vocational
institution. In reality, however, fresh graduates find it difficult to be employed easily and to
receive the ideal benefits they have worked hard for and feel entitled to.

Ina Labor Force Survey conducted in October 2015, 48% of the unemployed sector
is made up of the 15-24 year-old age bracket, while 32% is made up of 25-34 year olds. In
the same report, 22.5% of the unemployed were college graduates. This is a sad and
unfortunately fact, considering how the youth is always assured of a bright, promising
future soon after they successfully graduate.

The State recognizes this concern, and thus, aims to provide fresh graduates with
more opportunities to jumpstart their careers, increase their chances of being employed,
receive a competitive compensation package, and ultimately, become a significant
contributor to the country’s growth and progress.

‘This bill also ensures that the new graduate can properly establish himself wholly,
by providing him rights to a good start, a choice of opportunities, fair assessment, a truly
supportive wage, a secure tenure, further training, fair credit, and proper recognition. A
One Stop Shop shall also be established by the Public Employment Service Office (PESO) to
help new graduates secure all documents necessary for employment application.

In view of the foregoing, the swift passage of this bill is sought.

ALFRED V#RGAS


Republic of the Philippines
House of Representatives
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

: 4362

HOUSE BILL NO.

INTRODUCED BY CONGRESSMAN ALFRED VARGAS:

AN ACT
PROVIDING INCENTIVES FOR NEW GRADUATES OF COLLEGES, UNIVERSITIES AND
ACCREDITED INSTITUTIONS OFFERING TECHNICAL-VOCATIONAL COURSES,
OTHERWISE KNOWN AS THE “BILL OF RIGHTS FOR NEW GRADUATES”

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

SECTION 1. Short Title. This Act shall be known as the “Bill of Rights for New
Graduates.”

SEC. 2. Coverage. This Bill of Rights shall apply to new graduates from all colleges
and universities, and from accredited institutions offering technical-vocational courses. A
new graduate is a Filipino who just finished a bachelor’s degree from any college or
university, or completed a technical-vocational course from any accredited institution in
the Philippines. He or she shall be considered as such for a period of one (1) year from the
raduation or completion, as evidenced by the date indicated on his or her diploma

SEC. 3. Declaration of Policy. This State recognizes the role of the youth in nation-
building. As such, it shall promote and project their rights, interests and well-being. The
State will, thus, endeavor to provide new graduates of higher learning with opportunities
for growth and development by creating policies that protect their welfare.

SEC. 4. New Graduate’s Incentive Card. Upon showing proof of graduation, the
Public Employment Service Office (PESO) through the assistance of the Bureau of Local
Employment of the Department of Labor and Employment shalll issue to the new graduate a
“New Graduate's Incentive Card,” which shall be used to avail of all the privileges
enumerated in the succeeding provisions of this Act.



SEC. 5. Basic Rights of New Graduates, In consonance with the above-stated
policy, the State shall provide the necessary requirements, conditions and opportunities to
ensure proper adherence to the following basic rights of a new graduate:

5.1 Right to a good start.

a) The State shall provide each new graduate with health, housing and social
security benefits upon graduation. Thus, a new graduate shall be allowed to enroll himself
as a sponsored member of the Philippine Health Insurance Corporation, Pag-ibig and Social
Security System. As such, he shall be exempted from paying monthly
contributions that fall within one (1) year of the graduate's date of graduation,

1) Every new graduate who is a sponsored member of the Social Security
System under this law may, within one year from the date of his graduation, avail of
a salary loan equivalent to one (1) month's salary upon presentation of proof of
employment.

2) Every new graduate who is a sponsored member of the Philippine Health
Insurance Corporation under this law may, within one year from the date of his
graduation, avail of the same benefits of an individually paying member to cover the
graduate’s health and medical needs,

3) Every new graduate who is a sponsored member of the Pag-Ibig Fund
under this law may, within one year from the date of his graduation, avail of a home
loan upon (a) complete advanced payment of two years’ voluntary contribution, and
(b) presentation of proof of employment. The contribution payments for the first
year shall be advanced by the government

b) A new graduate who is securing government-issued documents usually required
in the course of his employment application shall be given priority and shall likewise be
exempted from payment of fees and charges, if any in connection with securing such
documents, provided it is secured within one (1) year from his date of graduation. This
includes, but is not limited to: (a) one copy of his birth certificate from the National
Statistics Office, (b) tax identification number (TIN) from the Bureau of Internal Revenue
(BIR), (c) clearance from the National Bureau of Investigation (NBI), (d) passport from the
Department of Foreign Affairs (DFA), and (e) barangay clearance or certificate of residency
from the local government units.

This exemption from payment of fees and charges shall likewise apply to a new
graduate who will venture into business or self-employment, in relation to securing
business or self-employment permits from the Department of Trade and Industry (DTI),
the Securities and Exchange Commission (SEC), the BIR, and the City or Municipal Hall.


©) The State shall establish new programs that provide funding and technical
support to business ventures of a new graduate, while strengthening existing programs.
Awarding of such assistance to a new graduate shall be based on the innovative features of
a product or service, and its business viability and economic contribution to the country:

1) Each new graduate who ventures into a technology-based enterprise shall
be able to avail of the programs under the Department of Science and Technology's
‘Technology Application and Promotion Institute, including financial and technical
assistance in the areas of setting-up and operation of pilot ventures for micro, small
and medium enterprise (MSME’s), upon submission of a feasibility study. Any loan
granted under this program shall not be charged any interest.

2) Each new graduate who ventures into the production, processing or
manufacturing of products or commodities shall be able to avail of the benefits
under Republic Act 9178, or the Barangay Micro Business Enterprises (BMBEs) Act
of 2002, including exemption from income tax and coverage of the minimum wage
law.

3) Each new Agriculture-related graduate who ventures into an agribusiness
enterprise shall be granted a loan not exceeding one hundred thousand pesos
(P100,000.00) upon submission of a feasibility study. Provided, that such funding is
secured by a chattel mortgage of assets acquired from the loan and that the said
graduate does not possess a negative credit information. He will be given priority in
the granting of loans by the Land Bank of the Philippines, Development Bank of the
Philippines, other government banks, rural and cooperative banks. To promote
agricultural development in the country and encourage youth involvement in
advancing agriculture-based enterprises, income derived from such ventures shall
be exempt from income tax payment.

4d) The State shall likewise provide each new graduate the opportunity to participate
in low-cost housing programs. Upon presentation of proof of employment, each new
graduate shall be eligible to apply under the different programs of the National Housing
Authority (NHA), particularly Core Housing and Medium Rise Housing Programs.

5.2 Right to a choice of opportunities.

a) To assist a new graduate in selecting and securing employment, all government
agencies that are mandated to generate employment and protect workers’ rights, such as


DOLE, PESO, POEA, DTI, Department of Tourism (DoT), Department of Public Works and
Highways (DPWH), and other government agencies, shall provide listing of job openings
within the country and abroad (in the case of the POEA), on their websites and offices. To
effectively implement this, the said agencies shall closely coordinate with private and
public higher education institutions (HEIs) to provide updated and relevant information on
job opportunities. The HEls shall post in conspicuous places inside their school campuses a
listing of such job opportunities. The DOLE, PESO, POEA, DTI, DoT, DPWH and other
attached agencies shall also facilitate the scheduling of job interviews with prospective
employers.

b) To expand the employment opportunities of new graduates, those belonging to
the top 10% of their school/college/institution shall (1) be exempted from taking the Civil
Service Eligibility Exam, should they opt to join the government sector, or (2) be qualified
to undergo internship or on-the-job training in private institutions that have registered
with the PESO in coordination with DOLE and TESDA, should they choose to be employed
in the private sector.

¢) Any allowance or wage received by new graduates from employers who allow on-
the-job-training or internship shall be an allowable deduction from the employer's gross
income.

5.3 Right to a fair assessment.

a) It shall be unlawful for any employer to discriminate against a new graduate in
the hiring process, as well as in the terms and conditions of his or her employment, solely
on the account of his or her lack of work experience and perceived inability to perform
tasks satisfactorily. Hiring should be focused in his or her capability, creativity, and
potential contribution to the company and industry based on his or her academic and
extra-curricular records, as well as his or her performance in a company’s qualifying
examinations and interviews. Employers shall take into consideration the unique
perspective and fresh ideas that a new graduate will bring into the company,

b) A new graduate shall have equal chance to promotion, as with other employees of
a company or institution, giving emphasis on skills, merit and potential, and not merely on
length of tenure.

©) A new graduate shall have the right to be informed of his or her career path
within the company he or she is employed in. Thus, the employer must inform the new
graduate upon hiring of its company policies and plans for potential advancement and
promotion of the new graduate.


5.4 Right to a truly supportive wage.

a) The State shall ensure that a new graduate shall be properly compensated based
on his or her skills, workload and output. Payment of a lesser compensation to a new
graduate as against a more senior employee, for work that is of equal value and with the
same output, shall be a violation of this Act. This is without prejudice to company benefits
relating to length of tenure of existing employees, such as, but not limited to, longevity pay.

b) A new graduate earning purely compensation income shall be given additional
P 10,000.00 personal exemption on his income tax, over and above the amount provided
under RA 8424 or the National Internal Revenue Code of 1997, as amended.

c) Employers of a new graduate employed in a public or private institution who opt
to establish and contribute to a personal equity and retirement account must match the
graduate’s contribution. Such contribution shall form part of the graduate's employment
benefits.

5.5 Right to a secure tenure.

a) In consonance with the provision of the Labor Code, newly-hired employees have
a right to a permanent position after six (6) months of satisfactory performance. Extension
of probationary status of a new graduate shall be deemed as a violation of this provision.
Moreover, employers are mandated to inform a new graduate hired of this right upon start
of his or her employment. Thus, an employee who continues to be employed by his or her
employer after a period of six (6) months shall automatically become a permanent
employee.

b) The DOLE and Civil Service Commission shall make a random audit of employee's
tenure in both private and public institutions, respectively. Any employee who has been
employed by his or her employer after a period of six (6) months shall be entitled to
become a permanent employee.

5.6 Right to further training.

a) It shall be the State’s policy to encourage a new graduate’s further training in the
field of study he or she has specialized in, In the event that a new graduate employed in a
private or public institution is offered further training, by way of continuing education,
seminar or conference or on-the-job training, which would neces
absence, he or she shall be allowed to attend such without loss of s

tate taking a leave of
niority rights



b) A new graduate shall be given equal opportunity and access to further training
within the institution. A new graduate’s status in any public or private institution (whether
temporary, contractual, casual or probationary) shall not be a bar to his participation in
any offered course or training within the institution. An employer is prohibited from
limiting participation of courses or training to regular or tenured employees.

©) A new graduate from disciplines crucial to national development, such as
agriculture, science and technology, education, including promotion of culture and the arts,
shall be given priority in further training, provided, that said graduates commit to stay and
serve the country for a minimum of 5 years. Such training will be facilitated by DOLE,
TESDA, and NCCA.

) To assist a new graduate, employed or unemployed, gain the necessary skills and
training to be more competitive with experienced employees, DOLE, TESDA and PESO are
mandated to strengthen their programs on employment and occupational counseling,
career guidance and training.

5.7 Right to fair credit.

a) It shall be the State's policy to ensure that every new graduate is given the
opportunity to build his or her credit. A new graduate who does not possess negative credit
information shall be eligible to apply for a short-term, multi-purpose or car loan from any
financial institution despite the lack of a long credit history,

1) A new graduate who is applying for a credit line or a loan in any financial
institution may use two (2) current consecutive pay slips as proof of income, which
shall be prima facie evidence that the new graduate has the capacity to repay or
make good on the financial obligation he or she is applying for.

b) The new graduate shall also be allowed to defer payment of any outstanding
student loan obligation without interest within six (6) months of his or her graduation date
in order to allow him or her time to seek employment. Thereafter, the new graduate may
apply with the financial institution for an extension of deferment of his or her student loan
obligation for another six (6) months on account of hardship. During the extension, the
graduate must be allowed to pay only the interest on his outstanding loan obligation.

1) The graduate may apply for forbearance on his student loan obligation at
any time until full payment of the loan, provided that he or she informs the financial
institution within 30 days from the first month he or she intends to ask for
forbearance. The forbearance may be for a period of up to one year. The graduate
must continue to pay interest on the loan during the period of forbearance.


¢) The State shall encourage commercial and government banks to appropriate a
portion of their loans, with lower interest rates, to new graduates who need capital to start-
up a business, without prejudice to non-new graduates’ loan applications. To encourage
participation, the “lost amount” arising from the granting of lower interest rates on loans
given to new graduates shall be considered as an allowable deduction from the
participating banks’ gross income in the computation of its income tax.

5.8 Right to recognition.

a) A new graduate, as with other employees, shall be recognized as an important
part of the Philippine workforce. They should be valued and given proper recognition for
their vital contribution to the country’s economy, The DOLE shall initiate a New Graduates’
Rewards Program to provide discounts and incentives to new graduates,

b) A new graduate shall be able to continue to avail of the student discount on
transportation fees within one (1) year from his or her graduation date.

c) A new graduate who will be travelling outside of the country within one (1) year
from his or her date of graduation shall also be exempt from payment of travel tax and
airport terminal fees.

d) A new graduate who will be travelling within the country within one (1) year
from his date of graduation shall likewise be exempt from payment of airport terminal fees,

SEC. 6. One Stop Shop - The Public Employment Service Office (PESO) in different
provinces, cities and municipalities shall serve as a One Stop Shop for a new graduate to
secure any or all documents necessary for employment application. The PESO shall provide
the step by step procedure in applying for the different documents needed, It shall likewise
be responsible for his registration and/or enrollment the government agencies mentioned
in Section 5.1.b

Upon application for a New Graduate’s Incentive Card, PESO shall encourage the new
graduate to:

(a) Submit a curriculum vitae in order for the PESO to include his or her name in a
database and enable them to link him with the appropriate companies or employers, as
well as facilitate easier tracking of the number of new graduates in every industry,

(b) Attend an orientation seminar/workshop on basic labor laws rights, and other
useful information on public and private employment including appropriate career and life
coaching.


SEC. 7. Implementation. The DOLE, Civil Service Commission and concerned attached
agencies shall be responsible for the administration and monitoring of the implementation
of the provisions of this Act, and shall promulgate the necessary implementing rules and
regulations within thirty (30) days from its effectivity.

SEC. 8. Appropriations. To carry out the provisions of this Act, such sum as may be
necessary is hereby authorized to be appropriated from the National Treasury. Thereafter,
the sum necessary for the continuous operation of this Act shall be included in the annual
appropriation of DOLE.

SEC. 9. Separablity Clause. If any provision, or part hereof, is held invalid or
unconstitutional, the remainder of the law or the provision shall remain valid and
subsisting.

SEC. 10. Repealing Clause. Any law, presidential decree or issuance, executive order,
letter of instruction, administrative order, rule or regulation contrary to or inconsistent
with the provision of this Act is hereby repealed, modified or amended accordingly.

SEC. 11, Effectivity Clause. This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspaper of general circulation.

Approved,