President Rodrigo Duterte has signed a law mandating that 100% of service charges collected in restaurants and hotels be distributed among their employees.
Duterte signed Republic Act 11360 on August 7.
The new law amended Article 96 of the Labor Code of the Philippines which gave restaurant and hotel workers 85% of the service charge collected from customers while management retained the remaining 15%.
Employees who are classified as managers—described by the law as those "who lay down and execute management policies or hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees or to effectively recommend such managerial actions"—are excluded from getting a share in the service charge.
Senator Joel Villanueva lauded the passage of the law, saying it allows frontline service workers “to enjoy the fruits of their labor, the reward for providing good, quality service."
“Concerns on the possible effect of the measure on the benefits that managerial employees may receive are understandable,” said the Senate labor committee chairperson.
“But we reiterate that the law also clarifies that nothing in it shall result in the diminution of existing benefits under present laws, company policies and bargaining agreements.”
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Villanueva said as of January 10, 2019, inspection data from the Department of Labor and Employment (DOLE) showed that 157 companies are in violation of the regulations on service charge.
He said the department admitted that they do not actually examine whether 85 percent of the total service charge collected is actually and accurately distributed to the covered employees. —NB, GMA News
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This article first appeared on GMA News.
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