Private Security Guards Employment Guidelines

Coverage and industry definitions

The guidelines apply to all private security agencies or operators, their principals or clients, and all companies allowed to directly employ security guards.
The guidelines apply to all security guards, whether security guards are employed by an agency or a company.
A “principal” is any employer, company, or establishment to whom a security job, service, or work is provided by a security service contractor, whether or not the arrangement is covered by a written contract.
A “security service contractor” is synonymous with a private security agency, meaning any person, association, partnership, firm, or private corporation that contracts, recruits, trains, furnishes, or posts any security guard or similar personnel for security needs as approved by the Philippine National Police.

Employment status rules

The security service contractor is the employer of its security guards and similar personnel.
The principal where security guards are assigned is an “indirect employer” for unpaid wages and other wage-related benefits based on the joint and several liability of the principal with the service contractor under the Labor Code, unless the private security agency is owned, managed, or controlled by the principal or the facts show that the principal controls the manner by which the security service is performed or where the security guard is directly hired by the establishment.
The probationary period of a newly hired security guard or similar personnel must not exceed six (6) months.
Services during probation may be terminated for failure to meet reasonable standards or criteria made known at the time of engagement or for just cause(s).
Any security guard or similar personnel who is allowed to work after the probationary period is considered a regular employee.

Service contract requirements

The security service contractor and/or principal must produce or submit the original copy of the service contract when directed by the Regional Director or the Regional Director’s duly authorized representative.
The service contract must stipulate that security guards/personnel shall be paid not less than the minimum wage and other benefits under the Labor Code and other existing laws.
The service contract must include an escalation clause immediately effecting wage order increases, with the contracts deemed amended accordingly.
The service contract must require compliance with Social Security, Employees Compensation, Philippine Health Insurance Corporation, and Home Development Mutual Fund laws on employees’ coverage or membership.
The service contract must state the kind or nature of security service.
The service contract must state the schedule of payment of 13th month pay per PD 851 and retirement pay per R.A. 7641.

Employment contracts and assignment details

The security service contractor must provide each security guard, detachment commanders/supervisors, and other security personnel a copy of the employment contract duly signed by the parties containing the terms and conditions of employment.
For every assignment of a security guard/personnel to a principal, the duty detail order must contain:
- a description of the job, work, or service to be performed; and
- hours and days of work, work shift, and applicable premium, overtime, and night shift pay rates.

Minimum wage, benefits, and computation

Security guards and similar personnel must be duly licensed and must have passed the physical and neuropsychiatric examinations required by the PNP.
Security guards are entitled to mandatory benefits under the Labor Code and other existing laws, including coverage by SSS, ECC, Philhealth, and HDMF.
The basic wage rate must be not less than the minimum wage rate for non-agricultural sector in the region where assigned, regardless of the nature of the principal’s business, or in the Region where the security guard has been engaged, whichever is higher.
If recruited through a branch office in another Region where the principal is located, the non-agricultural minimum wage rate applicable in the workplace of the principal governs.
If transferred, moved, or assigned to another Region, the security guard must be paid based on the more beneficial wage rate.
If transferred or reassigned to another principal within the same Region, wage rates may be adjusted, provided they must not be less than the applicable regional minimum wage rate.

Mandatory statutory benefits

Security guards and similar personnel are entitled to statutory benefits depending on working hours, work shift, and workdays, and these benefits should be included in the cost distribution in the service contract.
For all actual workdays and the ten regular holidays (holiday pay), basic salary must not be lower than the minimum wage rates and must be computed using recommended factors or more favorable practice.
Work on a regular holiday entitles the guard to 100% of the basic salary.
Allowance must be paid in addition to basic salary if prescribed by the applicable Regional Wage Order.
Premium pay must be paid for:
- 30% of the daily rate for work on special days and rest days; and
- 50% when work is performed on coinciding rest days and special days.
Overtime pay must be paid for work in excess of eight (8) hours a day, at least:
- 25% of the regular wage rate on ordinary days; and
- 30% on regular holidays, special days, and rest days.
Night shift pay must be paid at 10% of the regular hourly rate for work rendered between 10:00 pm to 6:00 am of the following day.
Service incentive leave is five (5) day service incentive leave for every year of service, convertible into cash equivalent if not used.
A proportionate leave benefit per month must be derived by dividing 5 days by 12 months times the daily rate.
Paternity leave is seven (7) days with full pay, granted before, during, or after childbirth or after spontaneous miscarriage by the legal spouse, and it is granted for only four deliveries, including miscarriage.
13th month pay must be paid at 1/12 of the total basic salary earned within a calendar year.

Recommended monthly rate formulas

Employers must use the applicable daily wage rate (ADR) and a factor representing paid days in a year to compute equivalent monthly rates (EMR) using the recommended formulas.
Where required to work every day, including Sundays/rest days, special days, and regular holidays:
- EMR = (ADR x 391.5)/12.
For the 391.5 factor, the guidelines define 391.5 as derived from:
- 302.0 ordinary working days
- 18.0 regular holidays x 200%
- 2.6 regular holiday on last Sunday of August x 200% + (30% of 200%)
- 66.3 rest days x 130%
- 2.6 special days x 130%
- 391.5 days considered paid in a year
Where considered paid on all including unworked Sundays/rest days, special days, and regular holidays:
- EMR = (ADR x 365)/12.
Where not working and not considered paid on Sundays/rest days:
- EMR = (ADR x 314.6)/12.
Where not working and not considered paid on Saturdays and Sundays or rest days:
- EMR = (ADR x 262.6)/12.
The guidelines explain that by using the above factors, basic wage for worked days and holiday pay for the 10 regular holidays are included in the monthly rates, and 30% rest day premium is integrated in the specified factors for Sundays/rest days and for the two special days (November 1 and December 31) under Executive Order No. 203 of 1987.
Premium pay due when an employee works on an ordinary working day proclaimed by the President as a special day (other than Nov. 1 and Dec. 31) is not integrated in the monthly rate factors described above.

Additional mandatory benefits and retirement trust fund

Security guards are entitled to mandatory benefits, including maternity benefits under the SS Law.
Separation pay applies depending on authorized causes and the amounts enumerated in the guidelines.
Where separation is due to retrenchment or reduction of personnel to prevent serious losses; closure/cessation not due to serious losses or financial reverses; illness or disease not curable within 6 months and continued employment is prohibited by law or prejudicial; or lack of service assignment for a continuous period of 6 months:
- separation pay is Half-Month Pay Per Year of service, but not less than One Month Pay.
Where separation is due to installation of labor-saving device; redundancy; or impossible reinstatement for reasons not attributable to employer fault (including when reinstatement ordered cannot be implemented due to closure or the position no longer exists and no substantially equivalent position is available):
- separation pay is One Month Pay Per Year of service.
Cash income benefits are granted under the State Insurance Fund for work-related sickness or other contingencies.
Retirement pay is granted by R.A. 7641 to security guards who retire under an applicable employer plan or policy.
For retirement under R.A. 7641, the security service contractor must create or put up a trust fund for retirement benefit, with a Trust Fund Agreement executed between trustor and trustee in favor of the employee-beneficiary.
The retirement trust fund must be administered by a trust company, bank, investment house, pre-need company, or corporation duly authorized to perform trust function exclusively for collective investment or re-investment of money received in its capacity as trustee, or a similar lawful arrangement.
Payments for retirement benefits collected in advance by the contractor from the principal/client must be deposited by the contractor/trustor to the trustee for payment of retirement benefits upon retirement or termination due to authorized causes.

Salary deductions and allowed withholdings

No deduction is made from the salary of security guards/personnel except for:
- SSS contribution
- EC contribution
- HDMF contribution
- Philhealth contribution
- withholding tax from income, provided a proper withholding tax receipt is issued to the employee before filing the income tax return every year
- union dues, if applicable
- other deductions authorized by law or applicable agreement

Contractor and principal liability structure

When the security service contractor fails to pay wages of its security guards/personnel, the principal is jointly and severally liable with the security service contractor to the extent of work performed, in the same number and extent the principal is liable to its direct employees.
If wage increases or adjustments occur after executing the service contract, the principal must bear the prescribed wage increases and the service contract is deemed amended accordingly.
If the principal fails to pay prescribed increases, the security service contractor is jointly and severally liable with the principal.
Security guards’ immediate recourse for wage increase before litigation is with their direct employer, the security service contractor, and the principal’s consideration for security wages must be adjusted to conform with mandated wage increases.
For violations on wages and other labor standards due to security guards, the DOLE Regional Director serves summons to both the security service contractor and the principal to determine each party’s extent of liability.

Solidary employer status for immediate relief

The principal is deemed the direct employer and is solidarily liable for monetary claims when any of the following applies:
- the security service contractor is engaged in labor-only contracting, contracts out work that displaces employees or reduces regular work hours, or commits prohibited activity;
- the security service contractor is declared guilty of unfair labor practice involving contracting out of work being performed by union members in a way that interferes with, restrains, or coerces employees in self-organization; or
- a relevant provision of the Labor Code is established violated by the Regional Director in enforcement powers.
The principal is also solidarily liable with the security service contractor for accrued claims and benefits in either case:
- the security service contractor’s license or business permit is cancelled, revoked, or not renewed; or
- the principal’s contract with the security service contractor is preterminated for reasons not attributable to the security service contractor’s fault.

Execution duties and record keeping

Service contracts between a security service contractor and its principal/s must ensure compliance with minimum wage and other labor standards under laws, including mandatory coverage by SSS, EC, Philhealth, and HDMF.
Government agencies or instrumentalities engaging security services must require the security service contractor, including through bidding requirements, to provide an undertaking to pay workers the above benefits.
Principals must keep and maintain their own separate records or files on assignment of security guards in their premises during the period of the service contract, and these must be open for inspection and verification by the Department.
Security agencies, as direct employers, must follow general record-keeping rules under the Labor Code, as amended.

Security of tenure and due process

Regular security guards and similar personnel enjoy security of tenure as provided by law.
Regular security guards may be terminated only for just or authorized causes after due process.
Termination for just causes under Article 281 of the Labor Code does not entitle separation pay unless provided by employer policy, individual contract, or collective agreement.
For authorized causes under Articles 283 and 284 of the Labor Code, the employer must serve a written notice on the security guard/personnel and the DOLE at least one (1) month before the intended termination date.

Reserved status and dismissal mechanics

A security guard or similar personnel may be placed in a workpool or reserved status due to lack of service assignments after expiration or termination of the service contract with the principal where assigned, or due to temporary suspension of agency operations.
A security guard/personnel cannot be placed in a workpool or reserved status in these situations:
- after expiration of a service contract when there are other principals where the guard can be assigned;
- as a measure to constructively dismiss the guard; or
- as retaliation for filing complaints against the employer for violations of labor laws.
If after six (6) months the security agency/employer cannot provide work or give an assignment to the reserved guard, the guard may be dismissed and must receive separation pay as prescribed in the separation pay rules in the guidelines.
A security guard on reserved status who accepts employment with other security agencies or employers before the end of the six-month period is not entitled to separation pay.

Preventive suspension limits and procedure

A security guard/personnel may be preventively suspended if continued employment poses a serious and imminent threat to life or property of the employer, the principal, or co-workers, subject to constitutional rights and notice requirements under Article 282 of the Labor Code.
Preventive suspension must not last longer than thirty (30) days.
After the initial preventive suspension period, the security agency must reinstate the guard to the former position or may extend the suspension, but during extension the agency must pay wages and other benefits due to the guard.
The employer must designate a day, time, and place within the preventive suspension period for a fact-finding investigation with notice to the employee.
The investigation must enable the suspended employee to be heard and assisted by counsel or a representative.
After investigation, the employer may exonerate the employee or, if found guilty, may terminate employment, without prejudice to the employee’s right to question the severance of relationship in the proper forum.
The same procedure must be observed when employment is terminated due to any just causes.

Reporting dismissals and retirements

The security service contractor must submit a monthly report of all dismissals or terminations, including retirements, made during the month to the DOLE Regional Office with jurisdiction over its main or branch office.
Reports must use the prescribed form and must indicate all information required by DOLE for policy and statistical purposes.

Rights to self-organization and collective bargaining

Security guards and other personnel employed by a security service contractor have the right to form, join, or assist in forming a labor organization of their own choosing for collective bargaining.
Security guards have the right to engage in concerted activities not contrary to law, including the right to strike.

Penalties for unlawful violations

Any violation of provisions of these guidelines that are declared unlawful or punishable by law is punished accordingly under the applicable law.

Effect on prior issuances and agreements

The guidelines serve as a guide for DOLE and its agencies in administering and enforcing applicable labor and social legislations and their implementing regulations.
Nothing limits the authority to prevent diminution of benefits; the guidelines must not be construed to authorize reduction of benefits security guards enjoy at the time of issuance.
Department Order No. 14, s. 2001 supersedes Department Order No. 40, s. 1994 and other inconsistent existing orders, and it takes effect immediately.