House approves bill protecting freelance workers

By Filane Mikee Cervantes

February 1, 2023, 6:26 pm

MANILA – The House of Representatives on Wednesday approved on second reading a measure providing protection and incentives to freelance workers.

During the plenary session, the chamber passed through voice voting House bill 6718, or the proposed Freelance Workers Protection Act, to promote the safety and well-being of freelance workers, specifically by mandating the provision of mandatory hazard pay and night shift differential pay.

The bill also requires a written contract between the employer or the hiring party and the freelancer covering services to be provided by the worker.

The written contract shall likewise contain the details of compensation and benefits, employment period, grounds for breach of contract and other conditions as may be directed by the Department of Labor and Employment (DOLE).

Pangasinan Representative Christopher De Venecia, sponsor and author of the bill, cited the 2018 Global Freelancer Insights Report by PayPal showing that the Philippines has one of the highest freelancers per capita at around 2 percent of the population, or an estimated 1.5 million freelancers.

"This measure acknowledges the changing landscape of how jobs are performed by granting the protection of law for the unique circumstances of freelance workers by providing them protection and, of course, promoting their welfare," De Venecia said.

He noted that President Ferdinand R. Marcos Jr. has vowed to protect the creative industry during his first State of the Nation Address (SONA) in July last year.

“The creative industry likewise faces many challenges including workplace conditions, working hours, intellectual property rights and the welfare of our beloved freelancers who were left vulnerable during the height of the pandemic,” Marcos said.

“We require an institutionalized creative industry that will advance the interests of its stakeholders — sila na nagbibigay ng kaluluwa at [pagkakilanlan] sa ating pagka-Pilipino. Protektahan natin sila (they who are preserving our soul and identity as Filipinos. Let us protect them),” Marcos added.

De Venecia said it is "high time" to pass a measure that would protect the critical mass of the creative industries, which is the freelance community.

A freelance worker is defined in the bill as any person whether incorporated under the Securities and Exchange Commission (SEC), registered as a sole proprietor under the Department of Trade and Industry (DTI), or registered as self-employed with the Bureau of Internal Revenue, "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 bill provides that an initial partial payment for the contracting of services of the freelance worker shall be made upon engagement, which shall be not less than 30 percent of the contract price.

The bill likewise provides a civil penalty of PHP50,000 to PHP500,000 for unlawful practices under the proposed law, which include engaging with a freelance worker without a written contract; paying the compensation due to the freelance worker later than 15 days after the date of payment of compensation stated in the written contract; or requiring as a condition of payment of compensation that a freelance worker accepts less than the specified contract price.

Freelance workers shall be granted a tax relief within the threshold specified under Republic Act No. 10963 (Tax Reform for Acceleration and Inclusion Act), and Republic Act No. 9178 (Barangay Micro Business Enterprises Act). (PNA)