Tax & Revenue

House approves More Benefits for Employees from Service Charge Collection

Date: 01 January 2019; Type: Legal News; Source: House of Representatives

Employees of hotels, restaurants and similar establishments may soon receive a bigger share in the service charge collection, giving more benefit to the workers.

The House of Representatives already approved on second reading House Bill 8784 seeking to increase 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 remaining 10 percent shall be retained by management to cover pilferages and breakages, and for distribution to local managerial employees.

The bill, principally authored by Rep. Dennis Laogan (Party-list, Ang Kabuhayan), further provides that the share of the regular rank-and-file and supervisory employees shall be fully and equally distributed among them.

In case the minimum wage is increased 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.

To implement all these, 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 said 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.

In an effort to further aid rank-and-file employees, he said he filed his proposal 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.

Laogan also sponsored the bill on the floor.

Other authors of the bill are 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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