House tax panel approves committee report on labor protections for freelancers

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The House Committee on Ways and Means has approved the unnumbered substitute bill which provide legal and contractual protections to freelancers, or self-employed individuals who take seasonal or short-term jobs, such as wedding planners, content writers, artists, and others who take ‘gigs.’

The protections will also entitle freelancers to benefits such as nightshift differentials and hazard pay.

Albay Rep. Joey Salceda’s House Bill No. 1527 was the base of the substitute bill.

According to Salceda, the Labor Code currently does not define “freelancers” and there is no formal contractual framework for freelancers in the law.

The solon said that some 1.5 million Filipinos were employed in the ‘gig’ economy or freelancing prior to the pandemic, and he expects the number to have risen at the height of COVID-19.

Among the protections that the proposed substitute bill will include are:

1.  A framework for contracts between employers and freelancers;

2. Eligibility for nightshift differential for freelancers who are required to be physically present in the workplace or those on field assignments; and

3. Hazard pay for freelancers deployed in dangerous areas

The proposal also makes it unlawful to:

Pay the compensation due the freelancer later than fifteen (15) days after the date of payment of compensation stated in the written contract or after the rendition of services in cases where there is no written contract;

Require as a condition of payment of compensation, at any time after a freelancer has commenced rendition of services, that a freelancer accept less than the specified contract price; and

Retaliate against a freelancer under certain conditions.

“Freelancing has become the lifeline for millions of Filipinos, especially those who lost their regular jobs during the pandemic. As the economy becomes more digital, there will be more freelancing. Without legal protections, we will also see more labor exploitation,” Salceda said.

Salceda adds that he foresees many industries, including business process outsourcing (BPO), moving towards freelancing in the coming years.

“Freelancing will be the natural consequence of the shift towards working from home. We have to protect workers in this sector now, while the potential problems are still on a scale we can solve,” he added.

The solon also said that many foreign employers hire Filipino freelancers in the creatives and design sector.

“Freelancers will be like work-from-home OFWs in the future, because as the world grows more digitally-connected, millions of freelancers will have the chance to earn foreign currency while staying the Philippines. In fact, thousands already do. There is great potential in this sector. But we have to ensure that the labor issues we face in other sectors now do not spill over to this promising sector,” he stressed.

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