Remote Workers: A Guide For Employers In The Philippines

• Published date: 16 March 2022
• Subject Matter: Employment and HR, Contract of Employment, Employee Benefits & Compensation, Employee Rights/ Labour Relations
• Law Firm: SyCip Salazar Hernandez & Gatmaitan
• Author: Dante T. Pamintuan and Easter Princess U. Castro-Ty

This Q&A is part of the publication designed to provide insights into hiring remote workers in Asia Pacific by members of the Employment Law Alliance (ELA). SyCipLaw contributed the guide for the Philippine jurisdiction. You may access the complete publication here.

Q. Is it possible for a foreign jurisdiction entity to hire remote workers in your country? What are the basic legal requirements (if any) for hiring remote workers from a foreign jurisdiction (contractor vs. employee; work permits, VISAs, business registration in foreign country; which local laws will apply; benefits and compensation, etc.)?

A. Yes, it is possible for a foreign jurisdiction entity to hire remote workers in the Philippines as contractors without the need to establish a business presence in the country, as opposed to hiring the remote workers as employees, which would require a foreign jurisdiction entity to establish a business presence in the Philippines. The terms of the contracting arrangement, e.g., benefits and compensation, procedure for termination, etc., are left largely to the mutual negotiation and agreement of parties as opposed to the terms of an employment arrangement, which is subject to the terms of the local employment laws and is highly regulated by labor authorities. Foreign nationals seeking to work remotely for a foreign jurisdiction entity from the Philippines may enter the country only under a temporary visitor or other visa arrangement. They are generally not eligible to apply for a work permit or work visa as these applications will require a local sponsoring entity.

Q. What are the common risks involved in hiring cross-border workers (data privacy and security; monitoring productivity and communications; wrongful dismissal; dispute resolution; permanent establishment risk; workplace safety; tax implications, vicarious liability, etc.)?

A. The most common risk involved in hiring cross-border workers in the Philippines is mischaracterizing the working relationship between the parties. In the Philippines, the contractual relationship is defined by law and not by the parties. This means that notwithstanding the agreement of the parties, i.e., notwithstanding that the agreement is captioned as a contractor agreement, a remote worker who is hired as a contractor may be declared an employee by our courts and regulators. In such case, the remote worker may claim protection under local employment laws.

Our courts and regulators use several tests to determine...