House approves bill to protect PH freelancers, gig economy workers

RG Cruz, ABS-CBN News

Posted at Feb 06 2023 07:23 PM | Updated as of Feb 06 2023 08:38 PM

MANILA - Voting 250-0, the House of Representatives approved Monday on third and final reading the House Bill 6718 or the proposed "Freelance Workers Protection Act."

A press release from the Speaker's office explained that the said measure would provide protection and relief to over 1.5 million Filipino freelance workers.

“As the digital economy expands, the number of Filipino freelance workers also increases. And if no laws are in place to protect our gig economy freelancers or to establish a formal grievance system to enforce their rights, they will be susceptible to all kinds of abuse,” House Speaker Ferdinand Martin Romualdez said in a statement.

“This is the reason a majority of lawmakers in the House threw their support behind this measure. As a sector with an exploding growth spurt in the coming years, they need protective cover under our laws to ensure their transition as a significant driver of our economy,” Romualdez added.

Under HB 6718, a freelance worker is any natural person or entity composed of no more than one natural person, whether incorporated under the Securities and Exchange Commission, registered as a sole proprietorship under the Department of Trade and Industry (DTI) or registered as self-employed with the Bureau of Internal Revenue (BIR). 

The bill states that this person must be “hired or retained to provide services, in exchange for compensation, as an independent contractor to do work according to one’s own methods and without being subjected to the control of the hiring party, except only as to the results of the work.”

The press release explains that the measure also mandates that a written contract be executed by any hiring party with the freelance worker that contains the extent of the services retained or obtained and important details such as the amount of compensation and the schedule of payment.

Likewise, the measure penalized unlawful practices such as the engagement of a freelance worker without a contract or payment of compensation later than 15 days after the date stipulated by both parties with a fine of not less than P50,000 but not more than P500,000.

Sec. 19 of the bill also mandates that freelancers shall be entitled to tax relief “within the threshold provided under the National Internal Revenue Code of 1997, as amended, and Republic Act No. 9178, otherwise known as the “Barangay Micro Business Enterprises (BMBEs) Act of 2002.”

The BIR is also mandated to designate a special lane or assistance desk to assist freelancers with their inquiries and in complying with the processing of documents.

Kabataan Partylist Rep. Raoul Manuel voted for the bill, saying they "welcome the presence of legislation which protects the rights of freelancers to proper compensation and protection, and offers avenues of complaint when these rights are denied to them."

Manuel, however, said that the resurgence of the freelancing industry is a reflection of the lack of quality employment in the country, thus pushing many people towards the said job options.

"This lack of quality employment is prompted by the absence of genuine national industries and the government’s poor response to issues of labor rights." Manuel said.

Although, Manuel noted that the bill does not delve into the matter of big foreign companies hiring freelance virtual or online assistants in the Philippines and paying them very low rates compared to the rates they usually pay for the same job. 

"We should also stick to the principle of compensating workers for the work they do, rather than where they are based. Companies who exploit workers here in the Philippines using these practices should be covered by this law and mandated to pay the same rates they usually pay a worker for doing the same job." Manuel said.

The bill will be submitted to the Senate for action.