Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Batasan Hills, Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. _______ 
Introduced by  
HON. ATTY. GERVILLE “JINKY BITRICS” R. LUISTRO 
AN ACT  
MANDATING THE IMPOSITION OF SERVICE CHARGE IN HOTELS, 
RESTAURANTS, RESORTS, AND OTHER SIMILAR ESTABLISHMENTS, AND FOR 
OTHER PURPOSES  
EXPLANATORY NOTE 
The Philippine hospitality and service industries – comprising of hotels, restaurants, 
resorts, catering services, and similar establishments – rely heavily on the dedication and hard 
work of rank-and-file employees who directly interface with customers. These frontline workers 
are essential in providing quality service, yet many of them receive compensation that does not 
reflect the value they contribute to the business. 
Under existing laws, service charges are optional and left to the discretion of business 
owners. This has resulted in inconsistencies in employee benefits across establishments, with 
some workers receiving supplemental income through service charges, while others do not, 
despite performing similar duties and working under comparable conditions. 
This bill seeks to address this gap by mandating the imposition of a ten percent (10%) 
service charge in hotels, restaurants, resorts, and other similar establishments. The proposed 
measure aims to standardize this practice to ensure that workers are fairly compensated through a 
system that directly rewards service excellence. 
The bill also ensures that eighty-five percent (85%) of the collected service charge goes 
directly to the employees, with the remaining fifteen percent (15%) available for legitimate 
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operational costs such as breakages and pilferages. Moreover, safeguards are in place to protect 
micro and small enterprises by exempting those with fewer than ten (10) employees or earning 
below ₱2,000,000 annually. 
 
In addition to enhancing workers’ income, this measure promotes equity, fairness, and 
dignity in the workplace, which are cornerstones of sustainable economic development. 
 
In view of the foregoing, the passage of this bill is earnestly sought. 
 
 
 
 
HON. ATTY. GERVILLE “JINKY BITRICS” R. LUISTRO 
 
 
 
 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Batasan Hills, Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. _______ 
Introduced by  
HON. ATTY. GERVILLE “JINKY BITRICS” R. LUISTRO 
AN ACT  
MANDATING THE IMPOSITION OF SERVICE CHARGE IN HOTELS, 
RESTAURANTS, RESORTS, AND OTHER SIMILAR ESTABLISHMENTS, AND FOR 
OTHER PURPOSES  
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Title. – This Act shall be known as the "Mandatory Service Charge Act of 
2025." 
SECTION 2 Declaration of Policy. – It is hereby declared the policy of the State to 
promote the rights and welfare of workers in the hospitality and service industries by ensuring 
just compensation and fair sharing of revenues. In line with this, the State mandates the 
imposition of a service charge in certain establishments, which shall be distributed fairly among 
employees. 
SECTION 3. Definition of Terms. – For purposes of this Act: 
a.
Service Charge refers to the fee added to a customer’s bill, intended to serve as a
supplementary income for employees of an establishment;
b. Covered Establishments refer to hotels, restaurants, resorts, catering services, clubs, and
other similar enterprises engaged in the hospitality or food and beverage service
industries.
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c.​ Employees refer to all rank-and-file workers directly involved in the delivery of service 
to customers. 
SECTION 4. Mandatory Imposition of Service Charge. – All covered establishments 
are hereby mandated to impose a service charge equivalent to ten percent (10%) of the total bill, 
exclusive of taxes. 
 
SECTION 5. Distribution of Service Charge. – The entirety of the service charge 
collected shall be distributed as follows: 
a.​ Eighty-five percent (85%) shall be distributed equally among all rank-and-file 
employees of the establishment. 
b.​ Fifteen percent (15%) may be retained by management to cover breakages, pilferages, 
or administrative costs directly related to the operation of the establishment. 
 
SECTION 6. Exemptions. –  Small enterprises with less than ten (10) employees, or 
those whose gross annual revenues do not exceed Two Million Pesos (₱2,000,000), shall be 
exempted from the mandatory imposition of the service charge. 
 
SECTION 7. Penalties – Any establishment found violating this Act shall be subject to: 
a.​ A fine of not less than ₱100,000 and/or 
b.​ Suspension of business license for up to three (3) months, 
c.​ Payment of back wages equivalent to the undisbursed share of employees from the 
service charge, with interest of 12% per annum. 
 
SECTION 8. Monitoring and Enforcement. – The Department of Labor and 
Employment (DOLE), in coordination with the Department of Trade and Industry (DTI), shall 
formulate the necessary implementing rules and regulations (IRR) within ninety (90) days from 
the effectivity of this Act.​
 
 
SECTION 9. Separability Clause. – If any provisions of this Act is declared 
unconstitutional or invalid, the provisions thereof not affected by such declaration shall remain in 
force and effect. 
 
SECTION 10. Repealing clause. – All laws, executive orders, rules and regulations, or 
parts thereof, inconsistent with the provisions of this Act are hereby repealed or amended 
accordingly. 
 
SECTION 11. Effectivity. – This Act shall take effect fifteen (15) days after its 
publication in two (2) national newspapers of general circulation. 
 


Approved,