Hiring in the Philippines

Article XIII of the 1987 Philippine Constitution guarantees workers' right to security of tenure. The Labor Code operationalizes this through the doctrine that a regular employee can only be dismissed for 'just cause' or 'authorized cause,' and only with due process. There is no at-will employment. There is no 'we just didn't feel it was working out.' Every termination must fit a statutory ground and follow procedural due process.

An employee can be hired on probation for a maximum of six months. During this window, the employer can decline to regularize the employee — but only if (a) the standards for regularization were communicated in writing at the time of engagement, and (b) the employee was given a fair chance to meet them. Miss either of those, and the employee is deemed regular from day one. After six months, the employee is automatically regular — no further paperwork needed.

• 13th-month pay — 1/12 of total basic salary earned in a calendar year, paid by December 24. Non-waivable. (PD 851)
• SSS — Social Security System: 15% of Monthly Salary Credit total (10% employer, 5% employee) under the 2025 schedule. MSC ranges from ₱5,000 to ₱35,000.
• PhilHealth — universal health insurance: 5% premium split 2.5% employer / 2.5% employee, with a salary floor of ₱10,000 and ceiling of ₱100,000 (PhilHealth Advisory PA 2025-0002).
• Pag-IBIG (HDMF) — housing fund: 2% employer + 2% employee on the Maximum Fund Salary of ₱10,000 (raised from ₱5,000 in Feb 2024). Max employer + employee contribution is ₱400/month.
• Service Incentive Leave — 5 days per year after 1 year of service (commutable to cash if unused).
• Maternity leave — 105 days fully paid via SSS (additional 15 days for solo parents).
• Paternity leave — 7 days for the first four deliveries of the legitimate spouse.

For just-cause terminations, due process requires: (1) a first written notice specifying the grounds and giving the employee at least 5 calendar days to respond; (2) a hearing or conference where the employee can present a defense; (3) a second written notice communicating the decision. Skip any step, and even a substantively valid dismissal becomes illegal — costing you nominal damages (~₱30,000) at minimum, full back wages and reinstatement if the substantive ground also fails.

• Standard: 8 hrs/day, 48 hrs/week (most BPOs run a 40-hour shift pattern).
• Overtime: +25% on regular days, +30% on rest days or holidays.
• Night-shift differential: +10% for work between 10pm and 6am (huge for US-time-zone BPOs).
• Rest day: at least 1 in every 7 days.
• Regular holidays (12) and special non-working days (3+) with different premium rules.

'Endo' (end-of-contract) abuse — repeatedly hiring workers on 5-month contracts to avoid regularization — is illegal and a political flashpoint. DOLE Department Order 174 (2017) tightened the rules on labor-only contracting. If you 'contract' a Filipino worker who does work integral to your business, uses your tools, and works under your control, they are your employee — full stop. The labor inspector will not be sympathetic.

• Use a reputable EoR (PH-licensed) or set up your own PH entity — don't 1099 a Filipino employee.
• Issue regularization standards in writing on day one if you're using a probationary contract.
• Calendar 13th-month pay for December 24 and budget for it from month one (~8.33% loading).
• Register with SSS, PhilHealth, and Pag-IBIG before the first payroll cycle.
• Run a two-notice rule template for every disciplinary case. Document, hear, decide.
• Build authorized-cause separation pay (½–1 month per year of service) into your model.

Official sources to verify (keep this list bookmarked)