Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. _____ 
Introduced by CIBAC Party-List Representative 
Eduardo “Bro. Eddie” C. Villanueva 
AN ACT 
ENHANCING THE REGULATION ON EMPLOYMENT OF FOREIGN 
NATIONALS AND TRANSFER OF TECHNOLOGY, AMENDING FOR 
THE PURPOSE ARTICLES 40, 41, AND 42 OF PRESIDENTIAL 
DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE 
LABOR CODE OF THE PHILIPPINES AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
The proposed amendments to Articles 40, 41, and 42 of the 
Philippine Labor Code is triggered by the lingering problem of coordination 
and accountability among government agencies for the increasing 
number of foreign nationals working illegally in the country.  Additionally, 
it is a show of good faith to other countries, regions, and international 
bodies that the country honors its commitments in the WTO-GATS, 
ASEAN Economic Community (AEC), and other bilateral, regional and 
multilateral agreements, to at least review the restriction in the hiring of 
foreign nationals, or the Labor Market Test (LMT), which is used to 
determine the non-availability of a qualified, able and willing person in the 
Philippines to do the services for which the foreign national is being hired. 
July 25, 2022
8:00 am
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The amendments aim to: (1) update the provisions and reflect the 
terms used by the country in trade negotiations and in its bilateral, regional 
and multilateral agreements’ commitments; (2)  provide flexibility in the 
Labor Market Test in cases where there is a short supply of skilled workers 
in specific industries, occupations and professions; (3) provide for training 
of Filipino understudies to transfer skills and technology from the foreign 
national through an understudy program; (4) emphasize that the 
Department of Labor and Employment is the sole issuing authority of 
employment permits all over the country including those working or 
employed in enterprises in preferred areas of investments or in economic 
zones; and (5) update the fines and penalties for violations which was set 
several decades ago. 
 
 
In conclusion, as the Philippines strives to meet its commitments in 
the WTO-GATS, AEC, and other bilateral, regional and multilateral 
agreements, the proposed amendments will improve but reiterate the 
restrictive policy on employment of foreign nationals. 
 
The immediate passage of this bill is earnestly sought. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. _____ 
Introduced by CIBAC Party-List Representative 
Eduardo “Bro. Eddie” C. Villanueva 
AN ACT 
ENHANCING THE REGULATION ON EMPLOYMENT OF FOREIGN 
NATIONALS AND TRANSFER OF TECHNOLOGY, AMENDING FOR 
THE PURPOSE ARTICLES 40, 41, AND 42 OF PRESIDENTIAL 
DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE 
LABOR CODE OF THE PHILIPPINES AND FOR OTHER PURPOSES 
  Be it enacted by the Senate and House of Representatives of the 
1 
Philippines in Congress assembled:
2 
3 
SECTION 1. Title II, Book I of the Labor Code is hereby amended to 
4 
read as follows: 
5 
6 
Title II - Employment of Non-Resident [Aliens] FOREIGN 
7 
NATIONALS 
8 
9 
SECTION 2. Article 40 of the Labor Code is hereby amended to 
10 
read as follows: 
11 
12 
ARTICLE 40. Employment permit of non-resident [aliens] 
13 
FOREIGN NATIONALS – [Any alien] ALL NON-RESIDENT 
14 
FOREIGN NATIONALS seeking [admission to the Philippines 
15 
for employment purposes and any domestic or foreign employer 
16 
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who desires to engage an alien for] employment in the 
1 
Philippines shall obtain an employment permit from the 
2 
Department of Labor AND EMPLOYMENT. 
3 
 
4 
[The] AN employment permit may be issued to a non-resident 
5 
[alien]  FOREIGN NATIONAL [or to  the applicant employer after 
6 
a determination  of the]  SUBJECT TO THE LABOR MARKET 
7 
TEST BASED ON THE  non- availability of a [person in the 
8 
Philippines who is competent, able and] QUALIFIED AND  
9 
willing [at the time of application to perform the services for 
10 
which the alien is desired] FILIPINO NATIONAL.  
11 
 
THE SECRETARY OF LABOR AND EMPLOYMENT IS 
12 
AUTHORIZED TO GRANT EXEMPTIONS FROM THE LABOR 
13 
MARKET TEST TO FOREIGN NATIONALS AS PROVIDED 
14 
FOR UNDER EXISTING LAWS AND REGULATIONS, AS 
15 
WELL 
AS 
IN 
INDUSTRIES 
OR 
OCCUPATIONS 
OR 
16 
PRACTICE OF PROFESSIONS WHERE THERE IS SHORT 
17 
SUPPLY, 
AS 
DETERMINED 
THROUGH 
TRIPARTITE 
18 
CONSULTATION. 
19 
 
20 
For an enterprise registered in preferred areas of investments 
21 
OR IN DESIGNATED ECONOMIC ZONES, THE employment 
22 
permit SHALL ONLY BE ISSUED BY THE DEPARTMENT OF 
23 
LABOR 
AND 
EMPLOYMENT, 
[may 
be 
issued] 
upon 
24 
recommendation [of] BY the government agency charged with 
25 
the supervision of said registered enterprise OR LOCATOR.  
26 
 
27 
SECTION 3. A new Article 40-A of the Labor Code is hereby 
28 
provided to read as follows: 
29 
 
30 
ARTICLE 40-A. UNDERSTUDY PROGRAM – FOREIGN 
31 
NATIONALS ISSUED EMPLOYMENT PERMITS SHALL 
32 
TRANSFER TECHNOLOGY TO AT LEAST TWO (2) FILIPINO 
33 
UNDERSTUDIES WITHIN THE PRESCRIBED PERIOD AS 
34 
INDICATED IN THE DEPARTMENT OF LABOR AND 
35 


 
EMPLOYMENT-APPROVED UNDERSTUDY PROGRAM OF 
1 
THE ENTERPRISE. 
2 
 
3 
SECTION 4. Article 41 of the Labor Code is hereby amended to read 
4 
as follows: 
5 
 
6 
 
 ARTICLE 41. Prohibition against transfer of employment.  
7 
 
8 
(a) After the issuance of an employment permit, the [alien] 
9 
FOREIGN NATIONAL shall not transfer to another job or 
10 
change his/HER employer without prior approval of the 
11 
Secretary of Labor AND EMPLOYMENT. 
12 
 
13 
(b) Any non-resident [alien] FOREIGN NATIONAL who shall 
14 
take up employment in violation of the provision of this Title and 
15 
its implementing rules and regulations, AS WELL AS THE 
16 
EMPLOYER 
OR 
THE 
RESPONSIBLE 
PERSON 
17 
REPRESENTING THE EMPLOYER, shall be punished [in 
18 
accordance with the provisions of Articles 289 and 290] WITH 
19 
A FINE of [the Labor Code.]  NOT LESS THAN FIFTY 
20 
THOUSAND PESOS (P50,000.00) NOR MORE THAN ONE 
21 
HUNDRED 
THOUSAND 
PESOS 
(P100,000.00), 
OR 
22 
IMPRISONMENT OF NOT LESS THAN SIX MONTHS NOR 
23 
MORE THAN SIX YEARS OR BOTH SUCH FINE AND 
24 
IMPRISONMENT AT THE DISCRETION OF THE COURT. 
25 
 
In addition, the [alien worker] FOREIGN NATIONAL shall be 
26 
subject to deportation after service of his/HER sentence.  
27 
 
28 
THE SECRETARY OF LABOR AND EMPLOYMENT SHALL 
29 
ALSO IMPOSE A FINE OF FIFTY THOUSAND PESOS 
30 
(P50,000.00) OR A FRACTION THEREOF FOR EVERY YEAR 
31 
OF CONTINUING VIOLATION TO BOTH THE FOREIGN 
32 
NATIONAL 
FOUND 
WORKING 
WITHOUT 
VALID 
33 
EMPLOYMENT PERMIT AND TO THE EMPLOYER. 
34 
 
35 


 
SECTION 5. Article 42 of the Labor Code is hereby amended to read 
1 
as follows: 
2 
 
3 
ARTICLE 42. Submission of List. – Any employer employing 
4 
non-resident foreign nationals [on the effective date of this 
5 
Code] shall submit a list of such nationals to the REGIONAL 
6 
DIRECTOR OF THE DEPARTMENT OF LABOR AND 
7 
EMPLOYMENT WHICH HAS JURISDICTION ON THE 
8 
EMPLOYER [Secretary of Labor and Employment] within 30 
9 
days after HIRING, [such date] indicating their names, 
10 
citizenship, foreign and local addresses, nature of employment 
11 
and status of stay in the country. [The Secretary of Labor and 
12 
Employment shall then determine if they are entitled to an 
13 
employment permit.]   
14 
 
15 
SECTION 6. Implementing Rules and Regulations. – Within ninety 
16 
(90) days from the effectivity of this Act, the Secretary of Labor and 
17 
Employment, in coordination with concerned agencies and in consultation 
18 
with the relevant stakeholders, shall formulate the necessary rules and 
19 
regulations to implement the provisions of this Act.  
20 
 
21 
SECTION 7. Repealing Clause. – All statutory laws, orders and 
22 
issuances, rules and regulations and/or parts thereof inconsistent with the 
23 
provisions of this Act are hereby repealed or modified accordingly.  
24 
 
25 
SECTION 8. Effectivity. – This Act shall take effect after fifteen (15) 
26 
days from the date of its publication in Official Gazette or in a newspaper 
27 
of general circulation.  
28 
 
29 
Approved, 
30