Service Charge Law to cover 'more employees' —DOLE

The Department of Labor and Employment on Saturday gave details of the revisions to the Implementing Rules and Regulations (IRR) for the Service Charge Law.

"The revised IRR, Department Order (DO) No. 242, series of 2024, expanded the coverage of service charge distribution by removing the direct employment clause from the previous IRR," said DOLE in a statement. 

DOLE said that this means "equal payment of service charges to all covered employees of service charge-collecting establishments."

"Dapat maisama pati mga manggagawa ng service providers for as long as bahagi sila ng pagbibigay ng serbisyo... Lalawak ang bilang ng mga manggagawa na dapat pag-ukulan ng nasabing service charges,” said DOLE Secretary Bienvenido Laguesma in an interview on Super Radyo dzBB on Saturday. 

(Even workers of service providers must be included for as long as they are part of the service... There will be a wider range of workers who will benefit from the said service charge.)

The new IRR also specified that "the non-diminution of benefits, which means the new rules on service charge distribution shall not diminish the existing benefits of the covered employees."

“Covered employees refer to all employees, except managerial employees as defined herein, regardless of their position, designation, or employment status, and irrespective of the method by which their wages are paid,” according to the IRR.

Laguesma, meanwhile, reminded service providers that the maximum service charge may only be up to 10%. He also said that 85% of the total should be for rank-and-file employees, while the remaining 15% will be allocated to management. 

“85% sa mga rank and file at 15% sa management [ang hatian]... Mayroon ding kompanya na 100% na ang binibigay sa manggagawa,” said Laguesma.

(The division should be 85% for rank and file and 15% for management, but there are companies that give 100% to their workers.)

The service charge law was signed into law by former President Rodrigo Duterte in August 2019, mandating 100% of service charges collected in restaurants and hotels be distributed among their employees. —Jiselle Anne Casucian/ VAL, GMA Integrated News