Recognizing that Filipino freelancers are being abused and exploited by their employers, Davao City 1st District Rep. Paolo Duterte authored a bill that aimed to safeguard the rights of freelancers, who have changed the landscape of Filipino employment because of access to online work.
Duterte, along with Benguet Rep. Eric Yap and ACT-CIS Partylist Reps. Edvic Yap and Jeffrey Soriano, filed House Bill (HB) No. 3738 because of the need to protect the rights of freelancers, whose numbers are expected to grow exponentially as the country transitions to a digital economy.
The bill sought to make written contracts mandatory in obtaining the services of freelancers, along with providing them with night differential and hazard pay when applicable.
“Freelancers mostly belong to what we now call the ‘gig economy’ and have risen in numbers especially during the pandemic. Despite contributing significantly to the country’s economic growth, they remain vulnerable to abuse and exploitation,” Duterte said in a statement.
“With their numbers expected to grow even more as we shift to a digital economy, we need an enabling law to protect their rights and welfare,” he added.
According to the measure, the mandatory written contracts should include the following:
⁃ The itemization of all services to be provided
⁃ Details of compensation and other benefits, including rate, method and schedule of payment;
⁃ Period of employment;
⁃ Grounds for breach of contract on the part of both the hiring party and the freelancer; and
⁃ The Tax Identification Number (TIN) of the freelancer.
Currently, the Philippines is sixth among countries with the fastest-growing market for freelancers, the 2019 Global Gig Economy Index of the financial services provider Payoneer said.
The growth contributed to a 35 percent rise in freelance earnings, the payment service provider added.
According to Duterte and Yap, “independent estimates” showed that there are about 1.5 million to two million Filipinos working as freelancers.
The proposed measure also stipulated that freelancers should receive a night shift differential pay of not less than 10 percent of the worker’s regular compensation for those who are required to be physically present in the workplace or those on field assignments 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 bill also encourages freelancers to register with the BIR and file and pay taxes. Freelancers are covered by the tax relief provisions under the Tax Reform for Acceleration and Inclusion (TRAIN) law and the Barangay Micro Business Enterprises Act, the bill likewise states,” Yap explained.
Furthermore, the bill stated that freelance workers assigned to dangerous locations are entitled to hazard pay equivalent to at least 25 percent of their total payment for the period of their deployment to such areas.
Dangerous areas identified under the bill include “strife-torn or embattled locations, distressed or isolated stations, prison camps, mental hospitals, radiation-exposed clinics, laboratories or disease-infested areas, or in areas declared under a state of calamity or emergency.”
To further protect the freelancers’ compensation, the measure would also make it unlawful for the hiring party to pay them later than 15 days after the stated payment date in their contracts, or require them to accept less than the specified contract price as condition to receive compensation.
It is also unlawful to commit any form of retaliation arising from the acts of freelancers meant to protect their rights as workers.
Violating the provisions of the law would leas to a penalty of a fine of not less than P50,000 but not more than P500,000.
Currently, the top three freelance jobs in the Philippines are in sales and marketing (32 percent), customer service (21 percent), data entry/internet research (20 percent), and creative/media graphic design (7 percent), a joint survey done by Payoneer and mobile wallet GCash reported.
The survey also found that freelancers are mostly concerned about the lack of company-sponsored benefits (37 percent), uncertainty about future income (29 percent), and isolation from working alone (23 percent).