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Comprehensive Guide to Employers of Record in the Philippines

In an era where remote work transcends borders and technology bridges the gap between continents, businesses are increasingly turning their gaze abroad in search of exceptional talent. The Philippines has emerged as a hotspot for companies seeking skilled tech professionals, boasting a wealth of software developers, engineers, and programmers.

However, venturing into the Philippine employment market comes with its unique set of challenges. To streamline the international hiring process, numerous organizations are now leveraging the expertise of Employers of Record (EORs).

Understanding EORs in the Philippines
An Employer of Record is a specialized entity that takes on the role of the legal employer for tax and legal matters. These organizations handle a variety of human resources and legal functions, including payroll, taxes, compliance, and employee benefits. By assuming responsibility for these formal employment tasks, EORs enable businesses to efficiently expand their workforce into new global territories.

The advantages of partnering with an EOR are manifold. Such collaborations make the Philippine talent pool more accessible and mitigate the complexities associated with global employment. For instance, companies like Oyster offer comprehensive services to manage overseas employment, covering everything from onboarding and offboarding to payroll and managing time off.

To discover how a global employment platform can simplify the process of integrating team members from the Philippines into your workforce, consider consulting with an expert advisor.

Key Considerations for Employing in the Philippines
Hiring from the Philippines opens doors to a vast array of tech talents and skilled professionals. Yet, it’s crucial to be mindful of the differences between Filipino and U.S. hiring practices. Below are essential aspects to consider when hiring in the Philippines.

Leave and Benefits
Unlike in some countries, Philippine law does not mandate employers to provide paid sick leave. After a year of service, employees become eligible for “service incentive leave,” entitling them to at least five days of paid leave, which can be used for vacations.

Female employees are entitled to up to 105 days of fully paid maternity leave for each pregnancy, with additional provisions for miscarriage and emergency pregnancy termination. Married male employees, for their first four children, may avail up to seven days of paid leave.

13th Month Salary
A unique aspect of Filipino employment law is the 13th month salary, equivalent to one-twelfth of an employee’s annual earnings, paid no later than December 24th. Often disbursed in December or in two installments in June and December, this payment is distinct from any Christmas bonus, which remains at the employer’s discretion.

Work Hours and Overtime
The standard workweek in the Philippines is 48 hours, spread over six days, with eight-hour workdays. Overtime work should be an exception and is compensated at an additional 25% of the base rate. Special holidays command a higher overtime rate of an additional 30%. It’s noteworthy that managerial positions do not qualify for overtime compensation.

Employment Terms
The probationary period for new hires is six months. Both employees and employers are required to give a 30-day notice for resignations and dismissals for authorized reasons, respectively. Immediate terminations can occur for just causes, following a specific procedure. Severance pay is due only in cases of termination for authorized reasons, potentially amounting to a month’s salary for each year of service.

In conclusion, while the Philippines offers a promising avenue for accessing top-tier tech talent, successful integration of this workforce necessitates a thorough understanding of local employment laws and practices. Employers of Record can play a pivotal role in navigating these complexities, ensuring a smooth transition into the global employment landscape.

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