Philippines Department of Labor Releases Expanded Guidelines on Telecommuting

Included in the new guidelines is an expanded and more specific definition of "alternative workplace", which encompasses locations where work is performed away from the employer’s principal place of business.  In addition, the new order defines more clearly what is meant by ‘telecommunication’ and ‘telecommuting’.

Of importance to employers is the requirement that the terms and conditions offered and agreed in a telecommuting agreement must not be less than the minimum labor standards, nor be a diminution of the terms and conditions of existing company policies, practices, contracts or Collective Bargaining Agreements.  Employees undertaking work through a telecommuting agreement must not be treated less favourably than those working from the principal place of business. 

In an interesting expansion of the definition of “alternative workplace”, the government is also considering whether work undertaken by an employee while commuting to a place of business should be consider working time, and hence covered and counted as hours worked.

The Philippines government has also had a change of heart with respect to tax incentives for call-centres located in the Special Economic Zone.  Earlier this year the government threatened to withdraw the incentives if companies failed to bring employees back to the office.  The decision to maintain the incentives is a further signal of the permanency of hybrid work arrangements. 

Outlook: Covid precipitated a dramatic shift in the way millions of Filipino workers undertook their work, as shared in our recent Global Pulse presentation.  The issuing of the Department of Labor regulations demonstrates an acknowledgement and acceptance that workplace flexibility and technological change are embedded for the future.