Employee Leasing in the Philippines

Content:

• Advantages of Employee Leasing in the Philippines
• Employee Leasing Services Offered by FMC Group
• Advantages of the Filipino market
• Recruitment in the Philippines
  • Minimum Wage and Payroll
  • Social Contributions and Taxes
  • Working Hours and Overtime
  • Vacation Days
  • Parental Leave and Sick leave
  • Notice Period

• Employee leasing in the Philippines allows companies to quickly and easily enter the Filipino market, as well as the regional market of the Association of Southeast Asian Nations (ASEAN).
• Employee leasing gives businesses the opportunity to take control of their growth according to their own strategy, as they do not have to worry about administrative procedures and legal regulations relating to their expansion.
• Employee leasing gives companies full access to the renowned Filipino labor force and allows them to easily integrate the best candidates into their teams.

• Search and selection of the best candidates according to the client’s needs;
• Negotiation of employment contracts;
• Management of the payroll according to international standards;
• Payment of social security contributions and taxes according to the Filipino labor law;
• Payment of all types of expenses and allowances;
• Monitoring of paid leaves and vacations for employees;
• Negotiation and implementation of private health insurance for employees if needed;
• Maintenance of regular contact with companies regarding the management of their employees.

• Located in the heart of East Asia and at the crossroads of the eastern and western business worlds, the Philippines can serve as an important entry point to the ASEAN market with its 650 million consumers. The country can also act as a manufacturing platform to access the larger economies of East Asia, namely China, India, Japan, and South Korea.
• The domestic market of the Philippines is growing at a very rapid pace. The country’s average annual GDP growth between 2010 and 2019 stood at 6.4%. Despite the recession induced by the COVID-19 pandemic, the GDP growth rate in the Philippines is expected to quickly recover and reach around 5.7% in 2022 and 5.6% in 2023-24, according to the World Bank.
• The Philippines is a member of the ASEAN Free Trade Area and has trade agreements with several important markets, notably China, Japan, Hong Kong, India, South Korea, Australia, New Zealand, and the European Free Trade Association.
• The Philippines has well-developed infrastructures linking the three major island groups of the country. The Philippines is highly accessible by air, through 16 international airports, and by sea, with five major seaports.
• In terms of access to telecommunications, the Philippines has one of the highest internet penetration rates in the region of Southeast Asia, with around 82%. The country has more than 76 million internet users, and high-speed fiber-optic internet is widely available in urban areas.

Minimum Wage and Payroll

• The daily minimum wage in the Philippines is set at PHP 537 (EUR 9.62).
• Salaries in the Philippines are paid biweekly, at intervals not exceeding 16 days.
• It is mandatory in the Philippines to give employees a 13^th-month salary bonus every year before December 24^th.

Social Contributions and Taxes

Working Hours and Overtime

• Legal working hours in the Philippines cannot exceed eight hours per day and employees must have one full day of rest every week.
• Overtime work is generally paid at the rate of 125% of the regular pay.

Vacation Days

• Employees in the Philippines have the right to take a minimum of five paid vacation days per year after their first year of service, but a longer vacation can be specified in the employment contract.
• The Philippines commemorates 14 public holidays:
  • New Year’s Day: January 1^st;
  • Chinese New Year: Between January and February (moveable);
  • EDSA People Power Revolution Anniversary: February 25^th;
  • Maundy Thursday and Good Friday: Between March and April (moveable);
  • Day of Valor: April 9^th;
  • Labor Day: May 1^st;
  • Independence Day: June 12^th;
  • Ninoy Aquino Day: August 21^st;
  • National Heroes’ Day: August 29^th;
  • All Saints’ Day: November 1^st;
  • Bonifacio Day: November 30^th;
  • Immaculate Conception Day: December 8^th;
  • Christmas Day: December 25^th;
  • Rizal Day: December 30^th.

Parental Leave and Sick Leave

• Female employees in the Philippines can take up to 105 days of paid maternity leave, including 45 days before birth and 60 days after. The total duration is increased to 120 days for single mothers. The employer covers the full salary during maternity leave but gets reimbursed by social security afterward.
• New fathers can take seven days of paid leave after the birth of their child, paid for fully by the employer.
• A parental leave of seven days per year is given exclusively to single parents.
• Sick leave for employees in the Philippines is subtracted from the annual paid leave.

Notice Period

• The minimal notice period for employees wishing to resign in the Philippines is 30 days.