MANILA - The Department of Labor and Employment (DOLE) has officially released the updated implementing rules and regulations (IRR) for Republic Act (RA) 11360, also known as the Service Charge Law, which mandates the equitable distribution of service charges among all workers in hotels, restaurants, and similar establishments. The revised IRR, encapsulated in Department Order (DO) 242, series of 2024, was issued on February 1 and aims to refine the allocation of service charges collected by such businesses.
According to Philippines News Agency, this latest set of guidelines supersedes the previous DO 206, series of 2019, aligning more closely with the legislative goal of ensuring full and equal distribution of service charges among eligible employees. One significant change in the new IRR is the removal of the phrase "under the direct employ of covered establishments" from Section 2(a), expanding coverage to include contractual, non-regular, or agency workers in addition to direct hires.
The Service Charge Law's revised regulations clarify that "covered employees" encompass all staff except managerial personnel, regardless of their job title, employment status, or wage payment method. This delineation aims to direct more financial benefits towards non-managerial employees, with service charges to be distributed evenly on a bi-monthly basis, according to the hours or days worked.
Furthermore, the new rules ensure that employees or their representative unions have the avenue to raise grievances regarding the distribution of service charges. For workers without union representation, the DOLE offers assistance for resolving any disputes.
The updated IRR also includes provisions to safeguard against the reduction of existing employee benefits due to the implementation of these new service charge distribution guidelines. Additionally, it enhances the dispute resolution mechanism by broadening the referral system to include DOLE's regional, provincial, field, or satellite offices, depending on the workplace's location.
Compliance monitoring is another critical aspect of the new guidelines, tasking DOLE's regional and local offices with overseeing adherence to both the Service Charge Law and broader labor standards enforcement rules.
The revisions are set to take effect 15 days following their publication in at least two newspapers of general circulation. The labor sector, represented by the Federation of Free Workers (FFW), has expressed support for the updated DOLE order, particularly highlighting the inclusion of non-regular and agency workers in the service charge distribution process. This development follows a resolution from the National Anti-Poverty Commission (NAPC) - Formal Labor and Migrant Workers Sectoral Council, endorsed for approval to Labor Secretary Bienvenido Leguesma.
FFW Vice President Danilo Laserna, representing workers in the NAPC, emphasized the resolution's intent to extend coverage to non-regular and agency employees. He urged employers within the service sector to adopt these regulations promptly, ensuring a fair and smooth transition to this more inclusive distribution system.