Omnibus Rules Implementing the Labor Code

Core definitions for recruitment

Section 1 of Book One, Rule I defines “Bureau” as the Bureau of Employment Services; “NSB” as the National Seamen Board; and “OEDB” as the Overseas Employment Development Board.
“Private recruitment entity” means any person or entity engaged in recruitment and placement of workers locally or overseas without charging any fee against the worker, directly or indirectly.
“Private employment agency” means any person or entity engaged in recruitment and placement of workers for a fee charged directly against the workers or employers, or both.
“Authority” is the document issued by the Secretary of Labor and Employment authorizing a person or association to engage in recruitment and placement as a private recruitment entity.
“License” is the document issued by the Secretary of Labor and Employment authorizing a person or entity to operate a private employment agency.
“Employment permit” is the authority issued by the Secretary to a non-resident alien to work in the Philippines or to an employer to employ such alien.
“Recruitment and placement” includes canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers, and also includes referrals, contract services, promising, or advertising employment locally or abroad, whether for profit or not; it deems any person offering or promising employment for a fee to two or more persons as engaged in recruitment and placement.
“Contract worker” covers any person working or who has worked overseas under a valid employment contract and includes seamen; “Overseas employment” covers work outside the Philippines, including work on board vessels plying international waters, covered by a valid employment contract.

Powers for employment promotion

Section 1 empowers the Secretary of Labor and Employment to: organize public employment offices; establish a nationwide job clearance and information system; develop programs for occupational, industrial, and geographical mobility; require submission of employment information; and issue rules to regulate and supervise private sector participation in recruitment and placement.
Section 2 mandates free placement services in public employment offices for both domestic and overseas placement.
Section 3 requires public employment offices to interview applicants to determine occupational qualifications and refer them to appropriate vacancies.
Sections 4 to 8 require public employment offices to provide vocational guidance and testing, classify applicants using Philippine Standard Classification codes, maintain a registry of skills, arrange training/retraining for employability, and arrange inter-area placement using the job-clearance and information system.
Section 9 requires every employer with at least six (6) employees to submit monthly reports to the nearest public employment office on vacancies, new employees, terminations/lay-offs/retirements, total employed workers, and requests for assistance.

Recruitment and who may participate

Section 1 of Rule III prohibits any person or entity from engaging in recruitment and placement for local or overseas employment except those enumerated: public employment offices, OEDB, NSB, private recruitment offices, private employment agencies, shipping/manning agents or representatives, and other persons or entities authorized by the Secretary.
Section 2 of Rule III prohibits any employer from hiring a Filipino worker for overseas employment except through those enumerated or as authorized by law or by the Secretary.
The ban on direct hiring provides an exemption for direct hiring by members of the diplomatic service, officials and employees of international organizations, and other employers authorized by the Secretary; such hirings must be processed by OEDB.
Rule IV, Section 1 permits only private sector participants to engage in recruitment and placement: private employment agencies, private recruitment entities, shipping/manning agents or representatives, and other entities authorized by the Secretary.
Rule IV, Section 2 requires a citizenship rule: only Filipino citizens or corporations/partnerships/entities with at least seventy-five percent (75%) of authorized and voting capital stock owned and controlled by Filipino citizens may participate.

Private employment agencies: licensing framework

Rule V, Section 1 requires license applicants for private employment agencies (local or overseas) to meet: the citizenship requirement; capitalization/net worth thresholds; and non-disqualification by law, rule, or regulations.
Capitalization requirements under Rule V, Section 1(b) are:
- Overseas recruitment and placement: minimum networth of P150,000.00 for a single proprietorship; and paid-up capital or networth of P150,000.00 for a corporation or partnership.
- Local recruitment and placement: minimum networth of P25,000.00 for a single proprietorship; and paid-up capital or networth of P25,000.00 for a partnership or corporation.
Rule V, Section 2 requires overseas license applicants to submit documents including certified Articles of Incorporation or domestic registration, proof of financial capacity (major stockholders), clearances from the Philippine Constabulary and Bureau of Internal Revenue, a statement of adequate competent staff for merit-based evaluation without undue discrimination, an undertaking to assume responsibilities for proper use of the license/authority and implementation of employment contracts, and any additional requirements the Secretary requires on recommendation of the Bureau Director.
Rule V, Section 3 provides that within thirty (30) days from receipt of the license application, the Bureau recommends denial or approval to the Secretary, who decides to approve or deny after considering findings and recommendations.
Rule V, Section 4 requires that upon approval, the applicant must pay a license fee of P6,000.00, post a cash bond of P50,000.00 (or equivalent negotiable bonds convertible to cash), and post a surety bond of P150,000.00 to answer for valid and legal claims arising from violations of license conditions or employment contracts and to guarantee compliance with the Code, its implementing rules, and Department issuances.
Rule V, Sections 5 and 6 require issuance after payment and bond posting, and provide that every license is valid for one year from date of approval unless sooner cancelled, revoked, or suspended for license-condition or Code/Rules violations.
Rule V, Section 7 mandates non-transferability of a license and restricts its use to the place stated; transfers involving business address, agents/representatives, or additional offices require final approval of the Bureau.
Rule V, Sections 8 to 13 establish operational-change controls, including automatic revocation upon transfer/change of ownership of a licensed single proprietorship for overseas employment, registration requirements for changes in directors (within 30 days), registration for officer/personnel changes (within 30 days), and prior authority/approval for transfer of business address (with attached documentary requirements).
Rule V, Section 13 prohibits recruitment activities outside the registered licensed address without prior authority from the Administration.
Rule V, Section 14 requires prior approval of appointments of representatives/agents, subject to specified requirements including proposed appointment/special power of attorney, PC-CIS and NBI clearances, passport-size pictures (two (2) copies), and a sworn/verified undertaking of responsibility; approval does not authorize establishment of a branch/extension office; revocations/amendments must be communicated or deemed not revoked/amended.

Renewals, reporting, and contract requirements

Rule V, Section 15 requires renewal applications to be filed not later than forty-five (45) days before expiry and supported by an operations report under oath and a verified financial statement including latest income tax payment.
Rule V, Section 16 requires the Bureau to complete renewal processing within thirty (30) days from receipt, recommend denial or renewal to the Secretary, and provides that release of the license is subject to the payment of P6,000.00, posting of a P50,000.00 cash bond (or equivalent), and renewal of the P150,000.00 surety bond.
Rule V, Section 16(a) requires bond replenishment within thirty (30) days from notice of garnishment; failure causes suspension or cancellation.
Rule V, Section 16(b) allows refund of cash bond only after posting a surety bond valid for three (3) years if the agency voluntarily surrenders the license/authority.
Rule V, Sections 17 to 19 require, before recruiting, submission of a formal appointment/agency contract executed by the foreign employer-principal (with specified contents), commercial registration and proof of foreign principal’s legal personality, job order/requisition with worker categories and master employment contract, and required work permits/visas where required.
Rule V, Section 18 requires submission to the Bureau for evaluation and approval of the master employment contract and related service/recruitment agreement, written in English and the language of the country of work whenever necessary, and requires Bureau endorsement for passport/travel applications of recruited workers.
Rule V, Section 19 requires the Bureau to adopt a standard format of service agreement and employment contract and requires employers to adopt the model contract for land-based overseas Filipinos.

Deployment and contract contents

Rule V, Section 20 makes deployment the private employment agency’s responsibility and provides:
- If the worker cannot depart within forty-five (45) days from release of passport without fault of the worker and without any valid reason by the agency, the worker is entitled to refund of expenses (if any) and standby pay if made to wait.
- If, after proper documentation and processing, the worker withdraws without any valid reason, the worker must reimburse the agency all processing and documentation expenses.
- The Bureau issues orders to implement the rule.
Rule V, Section 21 provides that employment contracts must not provide terms below Department standards and must include, at minimum: guaranteed wages for regular working hours and overtime pay; free transportation from point of hire to site and return including travel documentation; adequate board and lodging; free emergency medical and dental treatment; just causes for termination; workmen’s compensation benefits and war hazard protection including life and accident insurance; immediate transportation of remains and property in case of death; and remittance of salaries/allowances/allotments to beneficiaries through the Philippine banking system.
Rule V, Section 21(a) requires that workers hired overseas receive salaries or wages in accordance with standards promulgated by the Administration, including periodic review of prevailing worksites’ wages and salaries.
Rule V, Section 22 requires contract workers to advise renewal/extension of employment contracts either through the labor attaché/authorized foreign service official or by furnishing the Bureau a copy of the renewed contract.

Fees, receipts, and allowable charges

Rule V, Section 23(a) allows private employment agencies to collect a placement fee from every worker only in accordance with a schedule approved by the Secretary, payable only when the worker’s employment contract is approved by the Bureau and the worker is about to commence employment through the agency; every payment must be covered by an appropriate receipt showing amount and purpose; the Secretary may require an additional bond (subject to approval).
Rule V, Section 23(b) allows workers to shoulder costs of medical/psychological examination, inoculation certificate, and passport, provided the same are covered by appropriate receipts and unless paid by the employer of the principal.
Rule V, Section 23(c) requires records of payment to be available for inspection by an authorized Bureau representative during regular office hours.
Rule V, Section 24 requires agencies to charge a minimum mobilization fee to cover recruitment, processing, and documentation costs according to a Secretary-approved schedule, plus service charges that may be negotiated with the foreign employer/principal.
Rule V, Section 24(a) requires agencies to charge principals a manning service fee to cover services rendered in recruitment, documentation, and placement.
Rule V, Section 24(b) requires refund of amounts paid by withdrawing workers within one hundred twenty (120) days from signing of employment contracts, after deducting actual documentation expenses supported by receipts.
Rule V, Section 24(c) prohibits imposing any other fees or charges against any worker.
Rule V, Section 24(d) bars charging contract processing fees and Welfare Fund contributions to the worker, except that this does not apply to the Seafarers' Welfare Fund, which is contributory in nature.

Recruitment advertisements and limits

Rule V, Section 25(a) prohibits overseas recruitment advertisements in newspapers by a private employment agency without prior Bureau authorization.
Every authorized overseas recruitment advertisement must contain: number and nature of jobs including wage/benefit schedule; skills needed; employer name/nationality/address; and agency name/address and license number.
Rule V, Section 25(b) prohibits press notices/announcements on overseas job availability released by the agency prior to accreditation of one principal.
Rule V, Section 25(a)–(d) provides additional controls treating press releases as advertisements for overseas job openings and sanctions false and deceptive advertisements: such advertisements constitute valid grounds for suspension or cancellation of license or authority when not published according to prescribed format.

License cancellation, suspension, and enforcement

Rule VI, Section 1 applies cancellation/suspension procedures to persons/agencies/entities licensed or authorized to recruit and deploy Filipino workers for overseas employment.
Rule VI, Section 2 lists grounds for cancellation, suspension, or revocation including: charging/accepting fees/goods/services/bond amounts beyond prescribed; misrepresentation through false/deceptive notices/advertisements; false statements/testimonies/falsified documents; inducing workers to transfer/leave employment without worker-advantage; influencing to prevent employment; recruitment for jobs harmful to public health or morality or dignity of the Republic; obstructing inspection; substituting/altering approved contracts/documents without approval; failure to file reports on remittance of foreign exchange earnings and other required matters; travel-agency conflicts involving owners/partners/major stockholders/licensees/principal officers; withholding travel/documents for monetary considerations; recruitment activities outside approved areas; appointing representatives without prior approval; falsifying/altering employment contracts or travel documents; deploying workers to non-accredited vessels/principals; deploying workers whose documents were not processed by the Administration; publishing overseas vacancies in violation of rules; failure to deploy workers without valid reasons within prescribed period; failure to pay/replenish cash bond and renew surety bond; disregard of lawful orders/summons; withholding salaries/remittances without justifiable reasons; coercing workers overseas into prejudicial arrangements for certain benefits; and violation of other pertinent Labor Code provisions and relevant laws/rules/regulations.
Rule VI, Section 3 requires complaints or reports against private employment agencies to be filed with the Bureau, and mandates that the Bureau immediately investigate when a violation appears and require submission of comments/explanation within five (5) working days upon receipt of notice/order.
Rule VI, Section 3(a) requires the complaint to state the complainant/respondent names and addresses, the specific offense or omission, date committed, and relief(s) sought.
Rule VI, Section 3(b) requires that upon receipt, the Administration furnish the respondent with the complaint and supporting documents and require filing of an answer within ten (10) working days; the answer must be filed with the Licensing and Regulation Office with proof of service to the complainant; a hearing is scheduled within five (5) days from receipt of the last responsive pleading if a prima facie case exists; otherwise, summary judgment/minute resolution may be issued motu proprio.
Rule VI, Section 3(c) provides that failure to answer or appear renders the respondent in default, allows ex parte hearing/investigation, and the resolution/decision is based on complainant evidence.
Rule VI, Section 4 authorizes the Secretary to suspend a license pending investigation on grounds including failure to submit comments within five (5) days, strong prima facie case, or reasonable ground that continued operations will lead to further violations/exploitation or prejudice national interest/security; the Bureau Director similarly acts for domestic agencies.
Rule VI, Section 5 requires investigation by summoning the agency owner/official and other parties, receiving relevant evidence, and terminating the investigation not later than thirty (30) working days from the first hearing; it requires submission of findings and recommendations to the Department within fifteen (15) days from termination.
Rule VI, Section 6 provides that the order of suspension’s effectivity follows the penalty scale promulgated by the Administration.
Rule VI, Section 7 states that settlement or complainant desistance does not bar the Administration from proceeding with investigation; a full satisfaction settlement may mitigate liability.
Rule VI, Sections 8 and 9 authorize the Secretary or Administrator to impose fines and authorize the Administration to suspend documentary processing on grounds under Section 2 or for violations of the Rules.
Rule VI, Section 10 allocates issuing authority: cancellation orders by the Secretary; suspension/lifting orders by the Administrator (or Acting Administrator) on behalf of the Secretary; other orders not involving suspension/cancellation/revocation by the Director, LRO.
Rule VI, Section 11 makes suspension orders immediately executory, suspending all activities under recruitment and placement definitions; the Administration may seek assistance from other government institutions to implement suspension/revocation orders.
Rule VI, Section 12 grants authority to administer oath/affirmations, issue subpoenas, take evidence, compel attendance, and require production of relevant records to the Administrator, Director, LRO, and Hearing Officers.
Rule VI, Section 13 allows motion for reconsideration or appeal only when filed with the LRO within ten (10) working days from service of the order/decision; filing does not automatically stay execution, though the Secretary/Administrator may order a stay and require a supersedeas bond.
Rule VI, Section 14 provides finality: decisions of the Secretary in both overseas and domestic cases are final and unappealable; where the Secretary suspends a license/authority, suspension duration is not less than sixty (60) days unless sooner lifted.
Rule VI, Sections 15 to 21 require an inspectorate system, inspection powers during regular office hours, inspection before issuance/renewal, periodic inspections, requirements on inspection teams and presence of the office manager, and submission of inspection reports within 24 hours; violations found may support sanctions or denial of renewal; the Director, LRO must issue guidelines on inspection; and the Bureau issues guidelines on its functions and responsibilities.

Overseas construction and corporate export program

Rule VII, Section 1 requires construction contractors to be issued authority to operate as private recruitment entities, subject to guidelines jointly issued by the Secretary and the Construction Industry Authority of the Philippines.
Rule VII, Section 2 directs the Bureau, in coordination with relevant agencies, to develop programs for hiring workers in organized or corporate groups.

Private recruitment entities: authority and obligations

Rule VIII, Section 1 requires authority applicants (for overseas private recruitment entities other than construction contractors) to meet the citizenship requirement and a capitalization minimum net worth of P300,000 for a single proprietorship and P300,000 paid-up capital or net worth for corporations or partnerships.
Rule VIII, Section 2 requires applications to include Articles of Incorporation or Bureau Domestic Trade registration, proof of financial capacity of major stockholders (for corporations) or proprietor/partners (for single proprietorship/partnership), clearances from the Philippine Constabulary and Bureau of Internal Revenue for incorporators/partners/proprietor, a statement that the entity employs competent personnel to evaluate and test recruits meritably without undue discrimination, a verified undertaking to assume responsibility for proper use of authority and implementation of contracts, and other requirements the Secretary may require on recommendation of the Director.
Rule VIII, Section 3 requires the Bureau to recommend denial or approval within thirty (30) days from receipt; the Secretary decides to deny or approve after considering the recommendations.
Rule VIII, Section 4 requires a registration fee of P2,000.00 and posting of a performance bond of P200,000.00 to answer for valid and legal claims arising from violations of conditions of authority/contract and to guarantee compliance with the Code, implementing rules, and Department issuances.
Rule VIII, Section 6 provides issuance of authority by the Secretary upon payment and bond posting.
Rule VIII, Section 7 requires that authority is valid for one year unless sooner cancelled/revoked/suspended; imposes non-transferability and prior approval requirements for changes in business address/agents/representatives/additional offices; and requires the Secretary to issue renewal guidelines consistent with applicable provisions.
Rule VIII, Section 8 requires private recruitment entities to recruit, hire, and employ workers for overseas jobs in accordance with applicable Rules, and requires Bureau endorsement for passports/travel of recruited and hired workers.
Rule VIII, Section 9 authorizes the minimum mobilization fee concept for private recruitment entities to cover recruitment-related costs.