Details released on employer understudy and notice rules

IMPACT – MEDIUM

What is the change? The Department of Labor has released templates that employers will use to fulfill new rules requiring notice of employment permit applications and proof of understudy programs to train Filipino workers.

What does the change mean? One template shows the expanded information, including salary ranges, that will be published by the Department of Labor upon receipt of an Alien Employment Permit application. The other template shows the required details of the employer’s training program, including the names of two Filipino understudies for each foreign worker.

• Implementation time frame: Immediate.
• Visas/permits affected: Alien Employment Permits (AEP).
• Who is affected: Companies sponsoring foreign workers for AEP.
• Impact on processing times: The new understudy program requirements may lengthen processing times.
• Business impact: The new rules may make it harder to recruit and hire foreign workers in the Philippines.
• Next steps: Employers should work with their BAL representative for advice on the completion of the understudy training program plan.

Background: The Philippines implemented new labor rules Sept. 28 for companies employing foreign workers. Certain foreign employees are exempt from the AEP, including intracompany transferees, service contractors in executive or managerial roles, and foreign board members of Philippine companies who do not participate in day-to-day management or operations of the company.

The Department of Labor will publish the detailed notices of the filing of employment permit applications in the newspaper and now also on its website. Filipino workers will have 30 days to object.

Perhaps the most significant change requires employers to provide details of an understudy program to be implemented once the foreign national starts work. The training program plan must include the names of two Filipino understudies and a timeline, organized over the proposed length of the foreign national’s assignment, describing the skills that will be transferred and when it will be done. The foreign national must also complete an assessment of the Filipino understudies every six months to confirm that the necessary skills are being transferred. Assessment dates must also be included in the plan.

BAL Analysis: Employers in the Philippines should be aware that labor authorities are stepping up labor market testing and localization programs as conditions for companies seeking to employ foreign workers.

This alert has been provided by the BAL Global Practice group and our network partner in the Philippines. For additional information, please contact your BAL attorney.

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