Littler Global Guide - Philippines - Q1 2024

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Revised Rules Regulating the Service Charge Law

New Regulation or Official Guidance

Authors: Emerico O. de Guzman, Of Counsel – Angara Abello Concepcion Regala and Cruz Law Office

On February 1, 2024, the Department of Labor and Employment revised the rules regulating the Service Charge Law. Among the significant revisions are the addition of a clause on non-diminution of benefits and the removal of the phrase “under the direct employ of the covered establishment” in the definition of covered employees. With the removal of the said phrase from the definition of covered employees, it appears that the intention is to include in the distribution of service charges, personnel from contractors/manpower agencies engaged by the covered establishments, and not just their direct employees.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.