How We Ensure Compliance with Philippine Labor Laws (So You Don’t Have To)
Hiring talent in the Philippines opens the door to cost savings, great people, and operational agility. But it also brings a critical responsibility: compliance with local labor laws.
For companies without a legal presence in the country, navigating government registrations, mandatory contributions, and employee benefits can be overwhelming—and mistakes are costly.
At Sabio Advisory, we remove that risk entirely by acting as the legal Employer of Record (EOR) in the Philippines. Here’s how we ensure full compliance—so you don’t have to.
Key Philippine Labor Requirements (and Why They Matter)
Here’s a quick overview of what every Filipino employee is entitled to under the law:
1. SSS (Social Security System)
Mandatory government insurance covering retirement, disability, sickness, and death benefits.
2. PhilHealth
National health insurance program covering medical expenses for employees and their dependents.
3. Pag-IBIG Fund
Government savings and housing fund—required contribution by both employer and employee.
4. 13th-Month Pay
A full month’s salary paid out before December 24 each year—mandatory for all rank-and-file employees regardless of tenure.
These aren’t optional. Failure to comply can result in legal penalties, back payments, and damage to your company’s brand.
Common Mistakes Foreign Companies Make
🚩 Hiring as “freelancers” or “contractors” without legal safeguards
What may look like freelance work is often classified as regular employment under Philippine law—especially if the person works full-time, reports to you, and relies on your company for income.
🚩 Using non-compliant contracts
Generic templates that don’t align with Philippine labor codes put you at risk—especially during audits or disputes.
🚩 Underreporting wages to avoid contributions
Some companies attempt to game the system by lowering declared wages. This is illegal and traceable through tax audits.
🚩 Missing out on mandatory benefits or timelines
Examples: Delaying 13th-month payouts, not remitting Pag-IBIG, or skipping government registration entirely.
How Sabio Advisory Keeps You 100% Compliant
As your Employer of Record, Sabio Advisory assumes all legal responsibilities under Philippine labor laws. We handle:
- Employee registration with SSS, PhilHealth, Pag-IBIG
- Legally compliant contracts (local language available if needed)
- Calculation and remittance of mandatory government contributions
- Administration of 13th-month pay and any earned service incentives
- Issuance of payslips and filing of related tax documents
- Offboarding with due process, including final pay and clearances
Every employee under Sabio is fully protected by law, and every client is protected from legal exposure.
Add-ons for Employer Peace of Mind
We also offer optional services to give your team more value and stability:
- HMO (Health Maintenance Organization) – additional private healthcare insurance
- Work equipment procurement – laptops, software licensing, etc.
- Workspace access – co-working or physical office options
- Time tracking and performance reporting – for operational visibility
These can be bundled into your monthly fee or added on-demand.
What This Means for You
You get:
- Full legal peace of mind
- No need to register a company or consult a local law firm
- A streamlined hiring and payroll setup
- Happy, protected employees who can focus on doing great work
We don’t just process payroll. We help you operate responsibly in the Philippine market without the overhead or risk.
Final Thoughts
Building a global team is exciting—but labor law compliance isn’t something you can afford to get wrong. With Sabio Advisory as your Employer of Record, you’ll never have to worry about regulations, penalties, or fine print.
📩 Need to hire in the Philippines with full legal coverage?
Talk to us at consultants@sabio-advisory.com
🔗 Learn more at www.sabio-advisory.com
