The Department of Labor and Employment (DOLE) in the Philippines has introduced new rules and regulations concerning the employment of foreign nationals in the Philippines (Department Order No. 248, series of 2025) ("New Rules"). The New Rules have introduced significant changes to the Philippine foreign employment policy, specifically under the Alien Employment Permit ("AEP") system, with the aim of streamlining the process of hiring foreign nationals while protecting the local economy and workforce. The New Rules will take effect 15 days after publication in the Official Gazette or a newspaper of general circulation. However, the exact date of implementation is yet to be announced. The New Rules bring forth several key changes that global companies must navigate when sending employees to the Philippines. Some of the key changes are discussed below:
- AEP Application Timeline: The New Rules have extended the period for filing an AEP application to 15 calendar days (up from 10 calendar days) from the execution of the employment contract or the issuance of an appointment by the company. This adjustment provides companies with a slightly longer timeframe to comply with the AEP process.
- Labor Market Test: Companies must now advertise job openings in a local newspaper, on the PhilJobnet website, and at the nearest Public Employment Service Office (PESO) or Job Placement Office (JPO) depending on the job location. This change ensures transparency and gives local job seekers the opportunity to apply before a foreign national is considered.
- Certificate of Exemption: Foreign nationals who are exempt from the requirement to obtain an AEP must now request a Certificate of Exemption, ensuring that all foreign employees are documented, including those who do not require an AEP.
- Expanded List of Prohibited Acts: The New Rules have expanded the list of prohibited acts, and now include misrepresentation and fraudulent activities, which may lead to the denial or revocation of an AEP. Companies must exercise caution to avoid any actions that could compromise their compliance status.
- Labour Market Test Waiver for Corporate Officers: Companies are not required to advertise vacancies before hiring foreign nationals for certain corporate officer positions, as long as the appointment is verified by the corporate secretary. The exemption facilitates the recruitment process for executive-level positions.
- Conditional Employment Contract Effectivity: According to the new regulations, the effectiveness of an employment contract or appointment depends on the acquisition of an AEP from the DOLE. To prevent legal complications, companies must ensure that their employment offers are conditional on the issuance of an AEP.
- Overseas AEP Application: AEP applications can now be processed while the foreign national is abroad, but the AEP will only be handed over to the foreign national once they have entered the Philippines with the appropriate visa. This provision allows for more flexibility in the hiring process.
- Skills Development and Understudy Training Programs: Companies are required to implement training programs that facilitate the transfer of expertise from foreign nationals to Filipino workers. This initiative may lead to additional operational costs for companies but is aimed at enhancing the skill set of the local workforce and promoting knowledge sharing.
The aforementioned changes call for careful planning and coordination and necessitate a shift in the strategic approach used by companies while sending employees to the Philippines. Moreover, the stringent measures against prohibited acts highlight the importance of maintaining transparency and integrity throughout the AEP application process.
In summary, the New Rules introduced by DOLE represent a comprehensive update to the foreign employment regulatory framework in the Philippines. Companies must stay informed of the changes and must modify their procedures to guarantee uninterrupted business activities and adherence to regulations. As the Philippines continues to be a major service hub, these regulations will significantly influence the structure of international employment and the progression of the domestic job market. It is imperative for companies to consult with legal experts and maintain diligence to proficiently maneuver through the revised regulatory framework.
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