Private Employment Agency Regulation Act

Definitions governing licensing and fees

Section 2 defines “license” (or “license certificate”) as a document issued by the competent authority allowing a person to establish, direct, or manage the business/occupation of an employment agent, or have an employment office/agency, or procure/look for/furnish employment/work/positions/contracts, or employees/laborers/servants, for another.
Section 2 defines “fees” as any form or description of fees, remuneration, profit, or compensation promised, paid, or received directly or indirectly for any service rendered, offered, or promised by an employment agency or agent.
Section 2 defines “applicant for employment” as any person applying for employment/work/contract or hire of services; and “applicant for employee” as any person applying for procurement of an employee/laborer/work-man for service.
Section 2 defines “licensee” (or “licensed person”) as an employment agency or agent duly authorized to engage in the licensed business of obtaining/procuring/looking for/furnishing employment/work/positions or employees/laborers/workmen for another.

Licensing requirements and application details

Section 3 requires that no employment agency be established, directed, or managed in the Philippines, nor acted as agent/recruiter for such business, without a license issued by the Director of Labor and duly approved by the Secretary of the corresponding Department.
Section 4 requires the license application to be in writing and filed with the Director of Labor, and to state (at minimum) the applicant’s full name, age, whether single or married, and residence with street name and house number.
Section 4 requires the application to name the recruiter/agent(s) to be used for the agency’s outside activities, and to state whether the applicant is the only person interested in the business or whether others are interested (including their names and personal circumstances).
Section 4 requires specifying the place, street, and number where the agency will be established; and if the applicant is a corporation/registered company/partnership, to state the names and addresses of the president, treasurer, and secretary (or officers performing their duties); if a partnership or unregistered company, to state the names and addresses of all members.
Section 4 requires subscription and swearing: natural persons must personally subscribe and swear; corporations/registered companies must be sworn by the president or chief and attested by the secretary under the corporate seal; unregistered companies must be sworn by all members.

Taxes, bonds, and proof of bond

Section 5 requires the application to be accompanied by the necessary sum to pay the tax for the period covered by the license, following the schedule in Section 7(a), (b), and (c), and states the sum shall be refunded if the application is denied.
Section 5 requires a bond subscribed by the applicant and by two or more solvent and reputable sureties or by a reputable fidelity bond company.
Section 5 sets the bond penal sum at not less than PHP 3,000 nor more than PHP 10,000, in the discretion of the Director of Labor.
Section 5 requires the bond to be conditioned on strict compliance with the Act and other existing or future regulations relative to employment agencies and their operation; payment of any penalty imposed for violations; and payment of damages ordered by a competent court.
Section 5 requires the Director of Labor, upon payment of PHP 1, to furnish any applicant a certified copy of any bond registered in the Bureau, and declares that certified copy prima facie evidence of the bond in any court of justice.

Notice, objections, subpoenas, and hearing

Section 6 requires that immediately after filing the application, the applicant post a notice of filing and its contents in public places designated by the Director of Labor.
Section 6 allows any person to file written objections stating just and reasonable grounds; if found true, the grounds are sufficient cause for refusal of the license.
Section 6 requires that upon receipt of an objection, the Director of Labor designate the date, hour, and place for a hearing, by written notice to both the applicant and the objector.
Section 6 authorizes the Director of Labor to issue subpoenas and subpoenas duces tecum, administer oaths, and take affidavits for hearings on the application and for investigations under the Act.

Issuance, registration, and license validity

Section 7 requires the Director of Labor to issue the license and register it in his office when all requisites are complied with and the applicant pays the proper tax under Section 7.
Section 7 sets annual tax depending on location:
- PHP 100 per annum if the agency is to be established in the City of Manila;
- PHP 50 per annum if established in a province.
Section 7 sets additional tax for agencies procuring/furnishing for foreign countries individuals other than those included in Section 1 of Act No. 2486:
- PHP 1,500 if established in a province; and
- PHP 2,500 if established in the City of Manila.
Section 7 requires, in addition to the above taxes, an annual payment of PHP 25 to the treasurer of the City of Manila or of the province where the agency is established.
Section 7 requires an appointment issued over the Director of Labor’s signature and the Bureau’s dry seal to each licensee and each recruiter/agent person; it also requires payment of PHP 1 for each such appointment.
Section 9 provides that each license takes effect on the first day of the month in which issued and expires on December 31 of the year issued.
Section 9 requires renewal through a new application if desired; limits validity to the province or provinces specified in the license.
Section 9 requires the license to contain the licensee(s) name(s), the sitio/barangay, street, house number, story, municipality, province of authorized establishment, the license number, and the date of issuance.
Section 9 prohibits use of the license by any person other than the one in whose favor it was issued, use at any place other than the one stated, and transfer/conveyance/assignment to another.
Section 9 requires the license to be displayed at all times in a conspicuous and suitable place in the agency; and requires that appointments be exhibited upon request by any person in relation with the business of the agency or its employees, the Director of Labor or delegates, or any peace officer.

Fee limits, written contracts, and records

Section 11 requires that any contract between the agent/recruiter and the applicant for employment be written in a language or dialect known to the applicant and executed before any clerk of Court of First Instance or justice of the peace.
Section 11 provides that the clerk/justice of the peace shall not charge any fee for services or for preparing the contract.
Section 11 imposes a duty on the clerk/justice of the peace to carefully explain the scope and effects of the contract, satisfy himself regarding the correctness of any debt or obligation set forth (including fees), and sign the contract while certifying in the acknowledgment clause that Section 11 requirements are complied with.
Section 11 states that failure to comply with the clerk/justice duty is sufficient cause for reprimand and removal from office.
Section 12 requires every licensee to keep a register (approved by the Director of Labor) that records the language, date of application for employment, name/address of applicant to whom employment is promised/offered, sum received for fees, employment secured, and (when possible) names/addresses of known persons acquainted with the applicant.
Section 12 requires every licensee to keep a separate register (approved by the Director of Labor) that records, in an official language, for applicant-for-employees: name/address, date of application, kind of employee/laborer requested, names of persons sent, whether employed, and the sum received as fees.
Section 13 requires the registers to be open during office hours for inspection or supervision by the Director of Labor or deputies or any peace officer.
Section 14 requires each licensee to post the license in a conspicuous place and to post a printed, posted table of fees in the required format and languages, bearing approval of the Director of Labor.
Section 14 requires the table of fees to be printed on a card measuring not less than 20 centimeters by 30 centimeters, in type not smaller than 18 point, and printed in the local dialect, English, and Spanish.
Section 15 requires the table of fees to include:
- A cap that fees collected from an applicant for employment/position/work shall not exceed 20% of the applicant’s wages during the first year of employment;
- Collection only when the applicant has secured the employment/position/work, and has received wages for the first month;
- Payment in monthly installments of 20% of monthly wages until the fees are paid in full.
Section 15 requires the table of fees to include a refund rule for applicants for employees/laborers/workmen:
- 75% of the money paid must be refunded if not accommodated within 15 days after acceptance of the application;
- If the furnished employee/laborer/workman leaves service before serving at least one month without being dismissed, the agent must replace within 15 days or refund 75% of the fees received.
Section 16 requires that any receipt issued to an applicant must have Section 15 printed on its back.
Section 17 prohibits a licensee from dividing fees with contractors, contractor’s agents, employers, or employer’s agents to whom applicants for employment are sent or to be sent.

Place restrictions and agency operations

Section 10 prohibits establishing any agency in a hotel or boarding house or building where liquors or intoxicating beverages are sold.
Section 10 allows a licensee to establish barracks for temporary accommodation of applicants for employment even in provinces/municipalities other than where the agency is established, provided the barracks are regulated by rules submitted by the licensee and approved by the Director of Labor.

Prohibited acts by licensees

Section 20 prohibits a licensee from charging or accepting, directly or through another, any sum greater than that specified in the fee schedule, or from making the employee/laborer/servant pay an imaginary debt or a sum greater than the sum actually received as a loan or advance.
Section 20 prohibits a licensee from giving any false notice or voluntarily deceiving any applicant for employment or employees with false information.
Section 20 prohibits inducing or attempting to induce a person already employed to quit his employment in order to offer him to another through the licensee’s agency.
Section 20 prohibits attempting to influence or induce any person, corporation, or company not to admit in its service any employee/laborer/workman who has not applied for employment/work/position through the licensee’s agency.
Section 20 prohibits assisting in the admission as employee/servant/laborer of any minor without the written consent of his father, mother, guardian, or person in charge (with the consequence that absence of written consent bars the assistance).
Section 20 prohibits sending, directing, or taking any woman to a house of ill fame or exposing her to being corrupted.

Enforcement and inspection duties

Section 18 requires the Director of Labor to regulate the activities of private employment agencies and to inspect personally or through agents, deputies, or inspectors the agencies, offices, buildings, barracks, and records/books/other documents.
Section 18 requires that after each inspection, the Director of Labor certify the condition in which he found the agency and its related facilities/records/documents.

Exemptions for plantation, estate, or factory recruiting

Section 19 exempts persons while employed by a plantation, estate, or factory owner, provided they are not engaged independently and exclusively in the recruiting business and are engaged in work for and hiring laborers for the owner’s plantation/estate/factory.
Section 19 requires the plantation/estate/factory owner to furnish the Bureau of Labor a list of the agents or employees designated for recruiting laborers for the plantation/estate/factory.

Penalties, liability, and license cancellation

Section 21 punishes any violation of the Act with a fine of not less than PHP 25 nor more than PHP 200, or imprisonment of not less than one month nor more than six months, or both, at the court’s discretion.
Section 21 increases punishment for violation of Section 20(f) to imprisonment of not less than six months nor more than six years.
Section 21 authorizes the court, as an additional penalty for any violation, to impose cancellation of the violator’s license and states the violator is permanently disqualified from obtaining any license.
Section 22 imposes criminal liability on the president, director, administrator, or manager of any company/firm/corporation when the violation is committed by the company/firm/corporation.

Fees administration, treasury remittances, and regulations

Section 8 directs that monies collected under the Act that are not payable to the treasurer in the City of Manila or the province where the agency is established (as provided in Section 7(d)) shall be covered into the Insular Treasury.
Section 24 authorizes the Director of Labor to prepare regulations and blank forms necessary to carry out the purposes of the Act, subject to approval of the concerned Department Head.

Relationship to other laws; effectivity

Section 23 provides that none of the Act’s provisions shall be construed as amending or repealing Act No. 2486, as amended, and Acts Nos. 2541 and 31048.
Section 25 provides that the Act takes effect on January 1, 1933.
The Act was approved on December 2, 1932.