Employment & Labour Law

House approves on Reading Bill raising Service Charge Collection Share of Employees

Date: 18 January 2019; Type: Legal News; Source: House of Representatives

A proposal to grant employees of hotels, restaurants and similar establishments with higher share in the service charges being collected by business firms is nearing enactment into law as the House of Representatives unanimously approved the measure on third and final reading.

The proposal embodied in House Bill 8784 garnered the approval of all 208 House Members present during the voting this week.

Principally authored by Rep. Dennis Laogan (Party-list, Ang Kabuhayan), the bill seeks to raise from 85 percent to 90 percent the share of rank-and-file and supervisory employees in the total service charges being collected by hotels, restaurants and similar establishments.

The bill, further provides that the share of the regular rank-and-file and supervisory employees shall be fully and equally distributed among them.

Management shall receive the remaining 10 percent of the service charge collection to cover pilferages and breakages, and for distribution to local managerial employees.

In the event the minimum wage is raised by law or wage order, service charges paid to the covered employees shall not be considered in determining the employers’ compliance with the increased minimum wage.

The bill seeks the amendment of Article 96 (Service Charges), Section 1 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines.

Laogan noted that for the longest time, rank-and-file employees of various establishments, which collect service charges from clients and customers, have been receiving only 85 percent of such charges, pursuant to the limit set by P.D. 442.

Laogan said his proposal aims to ensure that the workers will be better compensated compared to their managerial counterparts, because rank-and-file employees are the ones who deal with clients and customers most of the time and have wages that are barely compliant with minimum wage statutes.

The bill is also authored by Reps. Marlyn Primicias Agabas (6th District, Pangasinan), Lorna Silverio (3rd District, Bulacan), Carmelo Lazatin II ( 1st District, Pampanga), Sherwin Tugna (Party-list, CIBAC), Feliciano Belmonte, Jr. ( 4th District, Quezon City) Tom Villarin (Party-list, Akbayan), Kaka Bag-ao (Lone District, Dinagat islands), Luis Raymund Villafuerte, Jr. (2nd District, Camarines Sur), Gus Tambunting (2ndDistrict, Parañaque City), Ruby Sahali (Lone District, Tawi-Tawi), Erlpe John Amante (2nd District, Agusan del Norte), Randolp Ting (3rdDistrict, Cagayan), Raymond Democrito Mendoza (Party-list, TUCP), Mark Go (Lone District, Baguio City), Juliet Cortuna (Party-list, A Teacher), Florida Robes (Lone District, San Jose del Monte City), Virgilio Lacson (Party-list, Manila Teachers ), Makmond Mending, Jr. (Party-list, AMIN) and Edcel Lagman (1st District, Albay).

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