New House bill protects rights of freelancers in ‘gig economy’

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Lawmakers are calling for the swift approval of a measure that aims to safeguard the rights of freelance workers, whose numbers are expected to grow exponentially as the country transitions to a digital economy.

Davao City First District Rep. Paolo Duterte and Benguet Rep. Eric Yap filed House Bill 3738 that seeks to make written contracts mandatory in obtaining the services of freelancers, along with providing them with night differential and hazard pay when applicable.

The lawmakers said independent estimates show that there are about 1.5 million to 2 million Filipino freelancers in the country.

“Freelancers mostly belong to what we now call the ‘gig economy’ and have risen in numbers especially during the pandemic. Despite contributing significantly to the country’s economic growth, they remain vulnerable to abuse and exploitation,” Duterte said.

“With their numbers expected to grow even more as we shift to a digital economy, we need an enabling law to protect their rights and welfare,” he added.

Duterte and Yap filed HB 3738 with ACT-CIS Party-list Reps. Edvic Yap and Jeffrey Soriano.

According to the lawmakers, the Philippines ranks 6th among countries with the fastest growing market for freelancers, according to the 2019 Global Gig Economy Index of the financial services provider Payoneer.

Payoneer said this growth has contributed to a 35-percent rise in freelance earnings.

A freelance worker is defined under HB 3738 as a person “whether incorporated under the Securities and Exchange Commission [SEC], registered as a sole proprietor under the Department of Trade and Industry [DTI], or registered as self-employed with the Bureau of Internal Revenue [BIR], who is hired or retained to provide services, in exchange for compensation, as an independent contractor to do work according to one’s own methods and without being subjected to the control of the hiring party, except only as to the results of the work [done].”

Written contracts made mandatory under the bill in hiring freelancers shall include 1) the itemization of all services to be provided; 2) details of compensation and other benefits, including rate, method and schedule of payment; 3) period of employment; 4) grounds for breach of contract on the part of both the hiring party and the freelancer; and 5) the tax identification number (TIN) of the freelancer.

“The bill also states that ‘no modification of the terms of the contract shall be enforceable unless signed by both the hiring party and the freelance worker,’” Yap added.

It also provides for the grant of night shift differential pay of not less than 10 percent of the freelance worker’s regular compensation for those who are required to be physically present in the workplace or those on field assignments for each hour of work performed between 10:00 p.m. and 6:00 a.m., “unless there is a more favorable fee stipulated” in the contract.

“The bill also encourages freelancers to register with the BIR and file and pay taxes. Freelancers are covered by the tax relief provisions under the Tax Reform for Acceleration and Inclusion [TRAIN] law and the Barangay Micro Business Enterprises Act, the bill, likewise, states,” Yap added.

Under the measure, freelance workers assigned to dangerous locations are also entitled to hazard pay equivalent to at least 25 percent of their total payment for the period of their deployment to such areas.

Dangerous areas identified under the bill include  “strife-torn or embattled locations, distressed or isolated stations, prison camps, mental hospitals, radiation-exposed clinics, laboratories or disease-infested areas, or in areas declared under a state of calamity or emergency.”

Complaints about any violation of the bill’s provisions may be filed with the Department of Labor and Employment (DOLE) through the Undersecretary for Workers with Special Concerns.

To ensure that freelancers receive just compensation for services rendered, the bill makes it unlawful for a hiring party to pay them later than 15 days after the stated payment date in their contracts; or require them to accept less than the specified contract price as condition to receive compensation.

It is also unlawful to commit any form of retaliation arising from the acts of freelancers meant to protect their rights as workers.

These unlawful practices are penalized with a fine of not less than P50,000 but not more than P500,000 under the bill.

The top 3 freelance jobs Filipinos take are in sales and marketing (32 percent), customer service (21 percent), and data entry/internet research (20 percent), according to a joint survey done by Payoneer and mobile wallet GCash.

The rise of social media has also paved the way for freelancers in creative/media graphic design (7 percent), the survey results show.

Key issues and concerns that freelancers face include lack of company-sponsored benefits (37 percent), uncertainty about future income (29 percent), and isolation from working alone (23 percent), the survey found.

Similar measures protecting the rights and welfare of freelance workers were filed in the previous Congress.





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