Freelancers Protection Act

Oilip of thes TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) ) 25 AUG -4 First Regular Session P6:15 SENATE RECEWED BY S. No.. Introduced by Senator Jinggoy Ejercito Estrada AN ACT PROVIDING PROTECTION TO FREELANCERS AND FOR OTHER PURPOSES EXPLANATORY NOTE The onslaught of the COVID-19 pandemic disrupted the traditional work arrangements. The prospect of working in flexible hours, performing duties at the comfort of your own home, and the opportunity to get hired in multinational and foreign companies seemed attractive for many Filipinos. A lot of the members of our workforce are able to participate in this new wave of employment scheme. Many Filipinos, especially the younger generation, being digital and tech-savvy, fluent in the English language, armed with inherent creativity and resourcefulness saw great career opportunities in freelancing. Still, there are causes for concern with respect to this relatively new work setup. A number of freelance workers complain of failing to receive any or appropriate compensation for their output. Some workers enter into this arrangement without the benefit of a written contract providing the terms and conditions of employment. Others fall outside the reach of social protection and welfare benefits.

According to the paper, "The Filipino online freelancers: Digital workforce of the world" published by the Philippine Institute for Development Studies on January 7, 2025, "The online freelancing sector has emerged as a vital component of the Philippine economy in recent times. According to reports, the country has approximately 1.5 million registered freelancers, contributing significantly to local and national economies. The Philippine Institute for Development Studies (PIDS) reportec a staggering 208 percent growth in freelance revenues from 2019 to 2020. This trend has continued into 2023 as digital platforms proliferate and more Filipinos seek flexible work arrangements." The paper also pointed out the unique challenges of freelancing in the country despite its benefits: • Project-based freelancers often face uncertainty because they lack job security and access to essential benefits such as health insurance, retirement plans, and paid leaves. This absence of safety nets can lead to financial insecurity during medical emergencies or other unforeseen circumstances. • Delays in receiving client payments are common, with some freelancers experiencing weeks or months without compensation for their work. • The lack of comprehensive policies protecting their rights leaves some of them vulnerable to exploitation and abuse by foreign clients. • Countryside freelancers still struggle with unreliable internet connectivity. • Freelancers in the country are also beginning to feel the increasing competition for jobs, especially since most Filipino freelancers possess only low-level skill sets like virtual assistance, which will become vulnerable because of the advent of artificial intelligence. This bill seeks to offer protection to the emerging labor sector. It provides for the Labor Bill of Rights for Freelancers (right to a written contract or agreement, right to just compensation, right to self-organization, right to be free from any form of discrimination and abuse, etc.) as it establishes standards to be implemented by the Department of Labor and Employment (DOLE). 1 PIDS - Philippine Institute for Development Studies

In view of promoting gainful employment and decent work and upholding the rights of Filipino workers under the so-called "Future of Work," the passage of this bill is hereby endorsed. JINGGOY EJERCITO ESTRADA

SERIE Other of the sinctary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session ) 25 AUG -4 P6:15 SENATE RECEIVED BY S. No. Introduced by Senator Jinggoy Ejercito Estrada AN ACT PROVIDING PROTECTION TO FREELANCERS AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Short Title. - This Act shall be known as the " Freelancers Protection

2 Act".

Sec. 2. Declaration of Policy. - It is the policy of the State to promote gainful

4 employment and decent work for all workers. Towards this end, the State shall provide 5 a regulatory framework that guarantees full protection to all workers in new forms of work arrangements, such as freelance work, whether in-person or through online 7 platforms or gig economy, which has grown exponentially with technological 8 development, and changing concepts of work and employer-employee relationship.

Sec. 3. Coverage. - This Act shall cover all freelancers, regardless of the

profession, talent, skills, task, work or service required or to be rendered.

Sec. 4. Definition of Terms. - As used in this Act:

(a) Client refers to any foreign or Philippine-based person, company or entity, or platform provider who engages a freelancer to render specific task, work or service in-person or online; (b) Crowdwork refers to online work through platforms that connect vast numbers of clients, organizations, and businesses, often across borders. It is performed online by an infinite number of workers for clients spread over large geographic distance;

(c) Freelance workers or freelancer refers to any natural person who offers or renders a task, work or service through his or her freely chosen means or methods, free from any forms of economic dependence, control or supervision by the client, regardless of whether he or she is paid by results, peace, task, hour, day, job, or by the nature of the service as required; (d) Freelance work refers do the work that is infrequent, unpredictable and short term, and rendered in-person, online, or through any online web platforms, such as crowdwork, work on-demand or any digital lifestyle application; (e) Platform provider refers to any foreign or Philippine-based online web platform provider the connect workers with the consumer of work and facilitate the exchange of goods and services for money such as crowd work, work on-demand or any digital lifestyle applications, that provides facilities, accounts, and training for one or several freelancers in the Philippines; (f) Work-on-demand refers to the platform-facilitated yet place-based and geographically limited work; (g) Written contract refers to a document, whether electronic file or printed copy, reflecting the mutual consent of the parties to be bound by the terms and conditions of their freelance work engagement and the consideration for the services rendered by the freelancer.

Sec. 5. Contractual Relations. - The relationship between the client and the

freelancer, absent proof of existence of employer-employee relationship, shall be governed primarily by applicable civil and commercial laws. In no case however, shall the terms and conditions thereof derogate the rights of workers guaranteed by the Philippine Constitution or be lower than the minimum standards provided by the Labor Code of the Philippines, as amended, or by industry standards and international labor standards.

Sec. 6. Rights of Freelancers. - The State shall accord the freelancers all the

rights of workers guaranteed under the 1987 Philippine Constitution, applicable provisions of the Labor Code of the Philippines, as amended, and relevant international

1 human rights instruments and international labor standards. For this purpose, the 2 State shall ensure the formulation by concerned the agencies of policies and programs for the free agents eyes of the following: (a) Right to a written contract or agreement; (b) Right to just compensation and equal remuneration of work of equal value without manipulation or distinction of any kind; (c) Right to safe and healthy working conditions; (d) Right to self-organization and to collectively negotiate with the government, the client, and other entities for the promotion of their welfare and in the advancement of their rights and interests; (e) Right to be free from any form of discrimination, violence, sexual harassment, and abuse; (f) Right to representation and participation in policy and decision-making processes and social dialogue; (9) Right to access their own data, information and resources for the promotion and protection of their rights and welfare; (h) Right affordable and adequate financial services, including, among others, collateral-free and gender-balanced credit at low interest; (i) Right to education and skills training; 0) Right the social protection and social welfare benefits; and, (k) Right to speedy redress of grievances, including alternative dispute resolution processes.

Sec. 7. Standards for Freelance Work. - The Department of Labor and

Employment (DOLE) shall ensure: (a) Compliance with the written contract between the freelancer and the client, which shall be in a language understood by both parties. Each party to the contract shall retain a copy thereof, and shall include, at the minimum, the following: 1) Itemization of all work and/or services to be provided by the freelancer end the terms and conditions of the engagement;

2) The rate and method of compensation, date on which the client shall pay the compensation or the mechanism by which such due date shall be determined; 3) The name and registered address of the client, and in the case of a foreign or foreign-based entity, the name and address of the local agent or representative, or any duly acknowledged representative based in the Philippines; and. 4) Any other terms and conditions that govern the performance of the mutual obligations of the parties that are not contrary to law, morals, good customs, public order or public policy. In the absence of a written agreement, any written exchange or proof of submission and receipt of completed task, work or service subject of the freelance work engagement, whether electronic or printed, shall be sufficient basis for claim for compensation or payment against the client; (b) Registration of freelancers or freelancers' association in the DOLE registry of freelancers and provide them with labor market interventions and assistance: Provided, That registration with the DOLE shall not be construed as a requirement to be able to engage as a freelancer; (c) Free exercise of freelancers' right to self-organization and to collectively negotiate with the government, the client, and other entities for the promotion of their welfare and in the advancement of their rights and interests, and their representation and participation in policy and decision-making processes and social dialogue; (d) Observance of programs and policies on non-discrimination, absence of violence, sexual harassment, and abuse of freelance work environment; and (e) Entering into bilateral or multilateral agreements with countries where online web platforms are registered or located for the protection and enforcement of Philippine freelancers' rights.

Sec. 8. Right to Access their Own Data and Information. - The Department of

Information and Communications Technology (DICT) shall conduct trainings for online freelancers, freelancers, and in coordination with the appropriate regulating agency,

1 such as the Department of Transportation (DOTr) and the Department of Trade and 2 Industry (DTI), ensure that freelancers engaged with or through platform providers 3 or online web platforms shall have access to their own data, information and resources for the promotion and protection of their rights and welfare.

Sec. 9. Right to Affordable and Adequate Financial Services. - The DTI and

6 other government financial institutions shall provide freelancers access to affordable 7 and adequate financial services, including, among others, collateral-free and gender- balanced credit at low interest.

Sec. 10. Right to Education and Skills Training. - The Technical Education and

10 Skills Development Authority (TESDA)and other government agencies, such as the Department of Science and Technology (DOST), DTI and DICT shall provide training and certifications for upskilling and entrepreneurial enhancement of freelancers.

Sec. 11. Right to Social Protection and Social Welfare Benefits. - The Social

Security System (SSS), Philippine Health Insurance Corporation (PhilHealth) and Home Development Mutual Fund (HDMF) shall ensure a simplified and online registration and remittance process for freelancers as self-employed workers and provide easy access to members' benefits such as sickness and unemployment benefits.

Sec. 12. Right to Simplified Tax Registration, Filing and Payment System. - The

19 Bureau of Internal Revenue (BIR) shall simplify and automate the registration process 20 and minimize the requirements for the registration of freelancers. The BIR shall also further enhance the online filing of tax returns and payment of appropriate taxes, including online submission of requirements. It shall also provide assistance to freelancers in their application, registration, and processing of documents and other inquiries.

Sec. 13. Right to Redress of Grievances, Including Alternative Dispute

Resolution Process. - The right of freelancers to seek redress for grievances and to avail of alternative dispute mechanisms in accordance with law shall be guaranteed. For this purpose, the DOLE shall conduct seminars on the legal recourses available to freelancers, and as far as practicable, encourage the parties to a freelance work agreement to avail of alternative dispute mechanisms.

Sec. 14. Payment; Burden of Proof. - Except as otherwise provided under the

contract entered into by the parties, the agreed compensation shall be paid in full not

1 later than thirty (30) days after the completion of the task, work or service subject of 2 the freelance work engagement. The burden of proving the payment of the compensation or consideration due to the freelancer as agreed under the contract shall rest on the client, upon proof of 5 performance or completion of the job or service contracted.

Sec. 15. Prohibited Acts. - The following acts shall be prohibited under this Act:

(a) Contract Alteration. Once performance of the work or service under the contract has commenced, no freelancer shall be required to accept less than the specified or agreed contract price, as a condition for the payment of the service or work rendered: Provided, That nothing herein precludes the parties from arriving at a settlement in good faith of a dispute arising out of or in connection with a contract or from agreeing to a modification of the contract in accordance with applicable laws. (b) Deduction. No deduction shall be made on the agreed contract price or compensation, unless the parties have agreed otherwise, or such deduction is on account of payment of applicable taxes. (c) Waiver. Except as otherwise provided by law, any provision of any contract entered into by a freelancer and a client purporting to waive any of the rights provided under this Act shall be void as against public policy. Any person who commits any of the foregoing prohibited acts shall be meted a fine equivalent to up to three (3) times the contract price or compensation agreed upon in the contract between the freelancer and the client.

Sec. 16. Public Awareness Program. - The DOLE, DTI, DICT and other relevant

agencies shall raise public awareness on the rights and welfare of freelancers. Information dissemination on the provisions of this Act, its implementing rules and regulations and capacity building on reasonable pricing of task, work or service, payment methods, entrepreneurship and career development in freelance work shall also be conducted.

Sec. 17. Prospective Application. - This Act shall apply to contracts or

agreements entered into on or after the effectivity of this Act.

Sec. 18. Applicability to Freelancers in the Public Sector. - The Civil Service

2 Commission shall issue the appropriate rules and regulations applicable to freelancers in the public sector to ensure compliance with the rights and privileges granted to freelancers under this Act, subject to applicable laws, rules and regulations governing 5 workers in the public sector.

Sec. 19. Implementing Rules and Regulations. - Within sixty (60) days from

7 the effectivity of this Act, the DOLE, DTI, DICT, DOST, TESDA, DOTr, upon consultation with the BIR, SSS, PhilHealth and HDMF, and other relevant agencies and sectors, shall promulgate the implementing rules and regulations as may be necessary to carry out the provisions of this Act.

Sec. 20. Separability Clause. - If any provision or part hereof is held invalid or

unconstitutional, the remainder of the law or the provision or part not otherwise affected shall remain valid and subsisting.

Sec. 21. Repealing Clause. - Any law, presidential decree or issuance, executive

order, letter of instruction, administrative order, rule, or regulation contrary to or inconsistent with the provisions of this Act are hereby repealed, modified, or amended accordingly.

Sec.22. Effectivity. - This Act shall take effect fifteen (15) days after its

19 publication in the Official Gazette or in a newspaper of general circulation. Approved,