Republic of the Philippines

Bouse of Representatives
Queson City, Metro Manila

Twentieth Congress
First Regular Session

HOUSE BILL NO. 17

Introduced by Representatives Ferdinand Martin G. Romualdez,
Andrew Julian K, Romualdez and Jude A. Acidre

EXPLANATORY NOTE

It must be underscored that in recent years there was a significant growth
in technological advancement, together with the modifications in the pattern and
standards in employment that gave rise to a new sector in the workforce called
the “freelance workers.”

The Business Inquirer has reported that by 2027, majority of the world’s
workforce will engage in freelance work. The 2018 Global Freelancer Insights
Report by PayPal revealed that the Philippines has one of the highest freelancers
per capita, at around 2% of the population, where there are estimated 1.5 million
Filipino freelance workers, and 65% of which are women

The primary objective of this bill is to protect and promote the welfare of
freelance workers. Specifically, this measure requires a written contract between
the employer and the freelance worker that shall state the terms and conditions
of employment, including services to be provided by the freelance worker,
details of compensation and benefits, employment period. grounds for breach of
contract, and other conditions as may be directed by the Department of Labor
and Employment (DOLE). There is also a provision of night-shift differential
and hazard pay. It mandates freelance workers to register with the Bureau of
Internal Revenue and pay their annual income taxes. Violation of this Act would
entail a civil penalty of P50,000.00 but not more than P500,000.00.


We acknowledge Representatives Christopher V.P. De Venecia, Luis
Raymund "Lray" F. Villafuerte Jr, Miguel Luis R. Villafuerte, Tsuyoshi
Anthony G. Horibata, Nicolas C. Enciso VIII, among others. This measure was
passed on Third Reading during the Nineteenth Congress.

In view of the foregoing, immediate passage of this bill is earnestly

sought.
np G. ROMUALDEZ
JUDE # ACIDRE ANDREW JULIAN K. ROMUALDEZ


Republic of the Philippines

House of Representatives
Queson City, Metro Manila

Twentieth Congress
First Regular Session

17

HOUSE BILL NO.

Introduced by Representatives Ferdinand Martin G. Romualdez,
Andrew Julian K. Romualdez and Jude A. Acidre

AN ACT
PROVIDING PROTECTION AND INCENTIVES TO FREELANCE
WORKERS

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

CHAPTERI
GENERAL PROVISIONS,

SECTION 1. Short Title. — This Act shall be known as the “Freelance
Workers Protection Act.”

SEC. 2. Declaration of Policy. — Pursuant to Article II, 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. To 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

(c) 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 the
freelance worker before the 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;

(c) Period of employment;

(d)Grounds for breach of contract on the part of the hiring party and of
the freelance worker; and

(e) Any other condition, term or clause that the Department of Labor
and Employment (DOLE) may direct, subject to the provisions of this
Act.

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 clinic, 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. — \t 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 8 of this Act shall be punished by a fine of
not less than Fifty thousand pesos (P50,000.00) but not more than Five
hundred thousand pesos (P500,000.00).

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 initiated 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 thereof upon all parties to the conciliation agreement.

CHAPTER II
CIVIL ENFORCEMENT

SEC. 14. Notice of Violation and Order of Payment. - If, as a result
of 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


SSSLBES

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the prevailing party in case the violation continues.

SEC. 16. Civil Action. - Except as otherwise provided by law, any
person aggrieved by a violation of this Act may 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 attomey’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 II of this Act and based upon the same transaction or series of
transactions, unless that complaint has been terminated without prejudice to a
subsequent civil action.

SEC. 17. Non-Waiver. — Except as otherwise provided by law, any
provision of any contract or agreement purporting to waive rights under this
Act is 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 fifteen (15) days
after its publication in the Official Gazette or in a newspaper of general
circulation,

Approved,