Based on recent legal precedents and regulatory enforcement patterns, here are common legal violations that companies encounter when hiring Filipino employees. This is not a complete list, just the most common issues in the news right now.

Employment Contract Violations

1. Insufficient Contract Terms
   • Missing mandatory provisions required by Philippine Labor Code
   • Unclear probationary period specifications
   • Incomplete confidentiality clauses
   • Missing dispute resolution procedures
2. Non-Compliant Probation Periods
   • Exceeding six-month maximum probation limit
   • Improper extension of probationary status
   • Failure to provide written evaluation notices
   • Unauthorized conversion of probationary to regular status

Compensation and Benefits Violations

1. Minimum Wage Non-Compliance
   • Underpayment of regional minimum wage rates
   • Incorrect application of wage orders
   • Failure to provide mandated cost-of-living adjustments
   • Unauthorized deductions from employee salaries
2. Leave Entitlement Issues
   • Denial of mandatory service incentive leave
   • Improper calculation of leave credits
   • Unauthorized leave deductions
   • Failure to provide required holiday pay

Social Security Compliance Violations

1. SSS Non-Compliance
   • Late or missed SSS premium payments
   • Underreporting of employee earnings
   • Failure to register new hires
   • Inaccurate contribution reporting
2. PhilHealth Violations
   • Delayed premium remittances
   • Incomplete employee coverage
   • Incorrect contribution calculations
   • Missing beneficiary enrollments
3. Pag-IBIG Fund Issues
   • Untimely monthly contributions
   • Incorrect member status reporting
   • Failure to update employee information
   • Insufficient fund management documentation

Documentation and Record-Keeping Violations

1. Personnel Records
   • Incomplete employee 201 files
   • Missing attendance records
   • Improper handling of confidential documents
   • Unauthorized destruction of personnel records
2. Payroll Documentation
   • Inadequate payslip requirements
   • Missing BIR Form 2316 compliance
   • Incomplete withholding tax documentation
   • Unauthorized alterations to payroll records

Working Hours and Overtime Violations

1. Regular Working Hours
   • Exceeding eight-hour daily limit
   • Failure to provide mandatory rest periods
   • Improper shift scheduling
   • Unauthorized work on rest days
2. Overtime Non-Compliance
   • Excessive overtime without approval
   • Failure to pay proper overtime rates
   • Missing overtime documentation
   • Unauthorized overtime arrangements

Termination Procedure Violations

1. Regular Employment
   • Termination without just cause
   • Insufficient notice periods
   • Incomplete separation process
   • Missing final pay requirements
2. Probationary Employment
   • Termination without written notice
   • Failure to state reasons for termination
   • Improper documentation of performance issues
   • Unauthorized extension of probationary period

Consequences of Non-Compliance

• Substantial fines and back pay
• Court-ordered damages up to PHP 500,000
• Attorney's fees and litigation costs
• Reputational damage
• Increased regulatory scrutiny
• Possible criminal charges for severe violations (even if they are simple ignorance of the intricacies of the labor laws by a foreigner)

These violations frequently arise from inadequate documentation, insufficient training, and poor compliance monitoring systems. Regular audits and proper documentation protocols can help prevent these common legal issues.

Key Differences from US Labor Laws

US-based employers are not evil. They just don’t understand the differences between the two countries:

1. Employment Protection
   • Philippines: Stricter termination requirements
   • US: Many states are “at-will employment” (fire for no reason)
   • Philippines: Mandatory regularization after probationary period
   • US: More flexible contractor classifications
2. Social Security Requirements
   • Philippines: Three-tier mandatory system
   • US: Two-tier system (Social Security/Medicare)
   • Philippines: Higher employer contribution rates
   • US: Lower overall contribution requirements
3. Leave Policies
   • Philippines: Comprehensive mandatory leave system
   • US: Minimal federal leave requirements
   • Philippines: Special holiday pay calculations
   • US: Even meal breaks are not mandated, much less holiday pay

From just this short list, it is easy to see how US-based employers would be confused by the myriad requirements in the Philippines. They may even disagree in principle, but that does not matter to the lawyers. Even the Canos that are trying to do the right thing are getting caught off guard and accidentally violating laws and regulations in the Philippines.

That is why we only facilitate connections between employers and independent contractors. (Yes, we know that some companies are also using our site, but we don’t take those jobs down because there is a Filipino out there that really needs that job.) We want everyone to be informed and to make the best decision for their situation. If you don’t know what you are facing, it is easy to make innocent mistakes that can be very costly. We know about independent contractors because that is what we have been doing for the past five years.

As a reminder, we are a Filipina Contractor and an American Employer. That is why we share this information. We have been living it.

Coleen & Darin