MANILA - President Rodrigo Duterte has signed a law that requires restaurants, hotels and similar establishments to distribute service charges in full to their employees, according to a copy of the measure released Tuesday.
Under Republic Act 11360, which Duterte signed on Aug. 7, all service charges shall be "distributed completely and equally among the covered workers except managerial employees."
Managerial employees refer to those who can "hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or to effectively recommend such managerial actions."
Service charges will not be considered in determining an employer's compliance to law or orders that raise the minimum wage, according to the measure.
It also mandates the establishment of a "grievance mechanism" to resolve any dispute between employees and the management on the distribution of the service charge.
The law amends the Labor Code of the Philippines. Under the previous setup, 15 percent of the service charge went to the management while the rest was for employees.
- With a report from Joyce Balancio, ABS-CBN News