Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

EIGTHEENTH CONGRESS
First Regular Session
|

HOUSE BILL NO. | 2019

INTRODUCED BY REPRESENTATIVE ALFRED VARGAS

EXPLANATORY NOTE.

Freelancing is easily becoming a popular industry in the country and the
population Filipino freelancers is rapidly burgeoning. Online freelancing platforms
Upwork and Freelancer.com alone boasts of 1.4 million and 800,000 Filipino active
users, respectively. Furthermore, clients of freelancing platforms prefer Filipino
workers as we are known for our hardworking culture, fast work turnover, and fluency
in the English language

Indeed, freelancing has become an attractive long-term career track for many
Filipinos as it offers schedule flexibility, work-life balance, and greater financial
freedom, But despite these perks, there still remain certain challenges faced by an
average Filipino freelancer like taxation, job security, and employee protection. Thus,
this bill

This bill recognizes the potential contribution of the freelancing to the
development of our nation and thus seeks to institutionalize the industry by providing
protection and incentives to Filipino freelance workers.

In view of the foregoing, the immediate approval of this bill is sought.

| ALFRED VARGAS


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

EIGTHEENTH CONGRESS
First Regular Session

2019
HOUSE BILLNO,

INTRODUCED BY REPRESENTATIVE ALFI

ANACT |

PROVIDING PROTECTION AND INCENTIVES FOR FREELANCE WORKERS

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

CHAPTER |
GENERAL PROVISIONS

SECTION 1. Short Title. - This Act shall be known as the "Freelancers
Protection Act.”

SEC. 2. Declaration of Policy. - It is the policy of the State to promote gainful
employment and decent work, protect all workers, and assure their right to just and
humane condition of work. Towards this end, the State shall recognize the right of
freelance workers to protection from late or non-payment for service rendered, It
further recognizes and supports workers in the freelance industry through fair
taxation

SEC.3. Definition of Terms. As used in this Act, the following term shall
mean

a) Department refers to the Department of Labor and Employment.

b) Freelance Worker refers to any natural person or entity composed of no
more than one natural person, whether incorporated under the
Securities and Exchange Commission (SEC), registered as a sole
proprietorship under the Department of Trade and Industry (DT!), or
registered as self-employed with the Bureau of Internal Revenue (BIR),
that is hired or retained as an independent contractor by a hiring party
to provide services in exchange for compensation


©) Hiring Party refers to any natural person or entity who retains a
freelance worker to provide any services.

d) Retaliation refers to any act reasonably likely to deter a person from
engaging in activity protected by Section 5 or this Act

SEC.4, Required Contract. - Any hiring party retaining the services of a

freelance worker in exchange for compensation of at least ten thousand (PHP

10,000) shall execute a written contract with such freelance worker before the

contracted-for work begins. The contract shall be in plain language understood by
both parties. Each party to be contract shall retain a copy thereof.

‘The written contract shall include at a minimum the following:

(a) Itemization of all services to be provided by the freelance worker;

(b) Duration of the work

(c) the rate and method of compensation;

(d) The date on which the hiring party must pay of the above-referenced
compensation or the mechanism by which such due date will be
determined; and

(c) Any other terms that the Department may be designate.

SEC.S. Unlawful Payment Practices - Ex¢ept as otherwise provided by law, all
compensation earned by the freelance worker shall be paid or provided no later than
thirty (30) days after the completion of the freelance worker's services under the

contract or the date such payment is due under the expressed terms of the contract,
whichever comes first.

Once a freelance worker has commenced performance under the contract, no
hiring party may require as a condition of payment that a freelance worker accept less
than the specified contract price. This provision does not preclude the settlement of a
good faith dispute regarding performance under the contract or preclude a
modification ofa contract in accordance with other applicable laws.

SEC. 6. Retaliation - No person engaged in any activity to which this Act
applies may retaliate against any person because such person has:

a) Opposed any practice prohibited by this Act;

b) Filed a complaint, testified or assisted in any proceeding under this Act;

¢) Commenced a civil action alleging a violation of this Act;

d) Assisted the Department in an investigation commenced pursuant to this
Act; or

¢) Provided any information to the Department pursuant to the terms of a
mediation or conciliation agreement under this Act.


CHAPTER 2
AGENCY ENFORCEMENT

SEC. 7. Complaints. - Any person aggrieved by violation of this Act, or such
person’s authorized representative, may file a complaint with the Department

SEC. 8. Jurisdiction. - The Department shall not have jurisdiction over a
complaint if

(a) The complaint is filed more than two years after the acts alleged to
violate this Act occurred;

(b) Either party to the agreement previolssly has initiated a civil action in a
court of competent jurisdiction alleging a 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 that is the subject of the complaint
under in this Act, unless such civil action has been dismissed without
prejudice to future claims; or

(c) Either party to the agreement previously has filed a claim or compliant
before any other administrative agency alleging a breach of contract or
any similar claim at law or equity arising out of the same transaction or
series of transactions that is the subject of the complaint under this Act,
and such complaint has not been withdrawn or dismissed without
prejudice to future claims

SEC. 9. Investigation. - Upon receiving a complaint alleging a violation of this
Act, the Department shall notify the respondent in writing and investigate such
complaint in a timely manner. Within thirty (30) days of receiving such written
notification, the person or entity identified in the complaint shall provide the
Department with a written response and such other information as the Department
may request. The Department shall notify each complainant in writing, not less than
sixty (60) days after the complaint is filed, of the status of the complaint and any
resulting investigation resolution

SEC. 10. Mediation and Conciliation. - The Department may, at any time after
the filing of complaint, attempt to resolve the complaint by any method of dispute
resolution including mediation and conciliation.

fa conciliation agreement is entered into, the Department shall embody such
agreement in an order and serve a copy of such order upon all parties to the
conciliation agreement. The terms of any conciliation agreement may contain such
provisions as may be agreed upon by the Department, the complainant and the
respondent. |


CHAPTER 3
ENFORCEMENT AND ADMINISTRATIVE PROCESS

SEC. 11. Notice of Violation. - If, as a result of an investigation of a complaint
or an investigation conducted upon its own initiative, the Department finds cause to
believe that a violation of this Act has occurred, it shall issue a notice of violation to the
offending person or entity. The Department shall prescribe the form and wording of
such a notice of violation

SEC. 12, Remedies. - The Department nay impose penalties provided for in
this Act and may grant a prevailing complainant all appropriate relief. Such relief shall
include damages, any appropriate equitable relief, and attorney's fees and costs. The
Department also may impose civil penalties as provided in Section 13.

SEC. 13. Civil Penalties. - Any person found to have violated this Act or any
rule or regulations promulgated thereunder is liable for a civil penalty of not more
than two hundred fifty thousand pesos (PHP 250,000).

SEC.14, Violation of Order. - Any person found to have violated an order
pursuant to this Act is liable to civil penalty not to exceed two hundred fifty thousand
pesos (PHP 250,000) and an additional civil penalty of not more than five thousand
pesos (PHP 5,000) for each day that the violation continues.

SEC.15. Civil Action. - Except as otherwise provided by law, the State or any
person claiming to be aggrieved by a violation pf this Act has a cause of action in any
court of competent jurisdiction for damages, injunctive relief and such other remedies
as may be appropriate, Such action may be brdught by the aggrieved person or such
person's authorized representative. A prevailing plaintiff in any such action shall be
entitled to an award of reasonable attorney's fee, court costs and disbursements. Any
claim alleging a violation of Section 4 shall be brought within two years of the date the
person knew or should have known of the alleged violation.

Notwithstanding the first paragraph of this section, no person claiming to be
aggrieved by a violation of this Act may bring an action in court alleging such violation
if that person, or the person's designated representative, has filed a complaint with the
Department pursuant to section 7,8, and 9 based upon the same conduct, unless the
complaint has been terminated without prejudice to a subsequent civil action.

The Commissioner and the corporation counsel each shall designate a
representative authorized person to receive copies of civil complaints in actions
commenced in whole or part pursuant to the first paragraph of this section, any
plaintiff shall serve a copy upon such authorized representatives. Failure to so serve a
complaint shall not bar or adversely affect any plaintiff's cause of action.

SEC.16. Criminal Penalty. - Any person who knowingly and willfully violates
the provisions of Section 5 shall be guilty of a misdemeanor punishable by a fine or not


more than twenty-five thousand pesos (PHP 25,000.00), or by imprisonment for not
more than three (3) months or by both.

SEC.17. Waiver. - Except as otherwise provided by law, any provision of any
contract or agreement purporting to waive rights under this Act is void as against
public policy. |

SEC.18. Effect on other Laws. ~ The provisions of Section 16 and 17, but do
not otherwise affect or replace any other basis of liability or requirement established
by other existing laws

SEC.19. Coverage. - This Act shall apply only to contracts or agreement
entered into on or after the effectivity of this Act.

SEC.20. Report. ~ One year after the effectivity of this Act, and every second
year thereafter, the Department Secretary shall submit a report to the Senate and
House Committees of Labor, Employment, and Human Resource Development
regarding the effectiveness of the provisions of this Act at improving freelance
contracting and payment practices. The report shall include, at a minimum, how many
complaints the Department has received pursuant to this Act, how many of such
complaints were settled by mediation or foam, how many investigations of
alleged violation of this Act the Department has Issued,

CHAPTER 4
TAXATION

BC.21. Taxpayer Registration. - All freelance workers as defined under this
Act shall be required to register with the Bureau of Internal Revenue (BIR).

SEC.22. Taxpayer Service. - Every BIR Revenue District Office (RDO) shall
have a lane or a special assistance desk dedicated to freelancers. This lane shall have
an officer who shall assist freelancers in their application, registration, processing of
documents, and other inquiries.

SEC.23. Filing and Payment. - Except as otherwise provided for by law, all
freelancers must pay their income taxes annually

CHAPTER V
OTHER PROVISIONS

SEC.26. Implementing Rules and Regulations. ~ Within sixty (60) days from
the effectivity of this Act, the Department of Labor and Employment, in coordination
with the Bureau of Internal Revenue, and other relevant government agencies, shall
promulgate the necessary rules and regulations for the implementation of this Act.

SEC. 27. Separability Clause. - Should any provision herein be declared
unconstitutional, the same shall not affect the validity of other provisions of this Act


SEC.28. Repealing Clause. - All laws,/decrees, order, circulars, rules, and
regulations or other issuances, or part of inconsistent with the provisions of this Act
are hereby repealed or modified accordingly.

SEC.29. Effectivity. - This Act shall take effect fifteen (15) days after
publications in the Official Gazette or in any two (2) newspapers of general
circulation in the Philippines.

Approved,