The House of Representatives on Thursday unanimously approved on third and final reading substitute House Bill 8817, the proposed Freelance Workers Protection Act, principally authored by Albay 2nd District Rep. Joey Sarte Salceda.
The House committee on labor and employment earlier passed and endorsed the measure.
Salceda, who also chairs the House ways and means committee, thanked his peers and colleagues in the chamber for the unanimous approval of the measure with 195 affirmative votes, zero negative votes and zero abstention. The proposed law seeks legal and contractual protection for freelance workers such as content writers, artists and even wedding planners.
The lawmaker said the measure aims to advance the rights and welfare of freelance workers in the ‘gig economy’ Sector, ensure humane working conditions and proper living wages for them and protect their interest in instances where their employers refuse to pay them for the services they rendered, or similar such cases.
The Labor Code does not define freelancing and provides no formal contractual framework for Filipinos working under such category, who already number about 1.5 million prior to the Covid-19 pandemic.
“If this measure is enacted, freelancers will have contractual protections and tax amnesty for their own sector to help them register legally,” said Salceda, adding he is presently working on ways to give freelance workers—whom he referred to as ‘saviors of the economy’ –a sound pension system.
Under the measure, a freelance worker is defined as any person registered as self-employed with the Bureau of Internal Revenue, "hired or retained to provide services in exchange for compensation."
The measure provides that any hiring party obtaining or retaining the services of a freelance worker should execute a written contract with the freelancer before said services are rendered. Both of them should each retain a signed copy of the contract.
When enacted, freelancers will be granted hazard pay equivalent to at least 25 percent of the total payment for the period of work deployment unless there is a more favorable fee stipulated in the contract.
Those required to be physically present in the workplace or on field assignments should be paid a night shift differential of not less than 10 percent of one's regular pay for each hour of work performed between 10 p.m. and 6 a.m., unless there is a more favorable fee stipulated in the contract.
The bill also provides a civil penalty of P50,000 to P500,000 for unlawful practices under the measure, which include paying the compensation due to the freelance worker later than 15 days after the compensation payment date stated in the contract; or requiring as a condition of compensation payment that a freelance worker accepts less than the specified contract price.
It also makes unlawful for hirers to require as a condition of payment that freelancers accept less than the specified contract price, and to retaliate against freelancers for: 1) opposing any practice prohibited under the bill; 2) filing a complaint with the Department of Labor and Employment; 3) testifying or assisting in any proceeding authorized under it; 4) filing a civil case claiming violation of the bill; 5) assisting the DOLE in an inquiry; and 6) providing DOLE with information pursuant to the terms of a mediation or conciliation agreement.
Under the measure, those who would commit these violations would be fined between P50,000 and P500,000. It also provides that all freelance workers would register with the Bureau of Internal Revenue and would pay taxes annually.
Salceda said that “in our age of millennialism, interconnectivity activities, instantaneous global communication and creative entrepreneurship with internet-based work, we can only expect a growing pool of workers who do not need to report to office but rather work from home or in a creative stationary set up.”
Freelancing, he said, “has already become the lifeline for millions of Filipinos, especially those who lost their regular jobs during the pandemic, and as the economy becomes more digital, there will be more freelancing, and without legal protections, there will be more labor exploitations.”
He said freelancing is the natural consequence of the trend towards digital transformation and shift to working from home, and likely, there will be “freelancers or work-from-home overseas Filipino workers in the future, millions of whom will have the chance to earn foreign currency while staying in the country as the world grows more digitally-connected,”
“In fact, thousands already do. There is indeed a great potential in this sector. There is thus a need to ensure that labor issues in other sectors now do not spill over to this promising sector.” Salceda said.