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 had earlier passed on and endorsed the measure.
Salceda, who also chairs the House Ways and Means Committee, thanked his peers and colleagues in the chamber for their 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.
Salceda 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 interests in instances where their employers refuse to pay them for the services they rendered, or similar such cases.
The Labor Code currently does not define freelancing and provides no formal contractual framework for Filipinos working under such set up. Prior to the Covid-19 pandemic, they already reportedly numbered about 1.5 million.
“If this measure is enacted, freelancers will have contractual protection and get 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 bill provides that any hiring party obtaining or retaining the services of a freelance worker shall execute a written contract with the freelancer before said services are rendered. Both of them shall each retain a signed copy of the contract.
When enacted, freelancers will be granted hazard pay equivalent to at least 25% 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 shall be paid night shift differentials of not less than 10% of their 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 measure also provides a civil penalty of P50,000 to P500,000 for unlawful practices under it, which include paying compensations due the freelance worker later than 15 days after the compensation payment date stated in the contract.
It likewise 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. It also provides that all freelance workers should register with the Bureau of Internal Revenue and pay taxes annually.
Salceda explained 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 added, “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 freelancers and more labor exploitations if they have no legal protection.”
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 added.