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House OKs on final reading bill providing protection for freelance workers

The House of Representatives on Monday unanimously approved on third and final reading the bill providing safeguards to freelancers or those on a gig-basis job on third and final reading.

This developed after House Bill 6718 or the Freelance Workers Protection Act, which provides for night differential and hazard pay for freelance workers whenever they are applicable, among other benefits, gathered 250 yes votes.

In a statement, Speaker Ferdinand Martin Romualdez said the passage of such a measure is critical given the expansion of digital economy.

“If no laws are in place to protect our gig economy freelancers or establish a formal grievance system for enforcement of their rights, they will be susceptible to all kinds of abuse. They need protective cover under our laws as a significant driver of our economy,” Romualdez said.

The bill estimates that there are around 1.5 million freelance workers in the country.

HB 6718 defines a freelance worker as any natural person or entity composed of no more than one natural person, whether incorporated under the Securities and Exchange Commission, registered as a sole proprietorship under the Department of Trade and Industry (DTI) or registered as self-employed with the Bureau of Internal Revenue (BIR).

Likewise, the bill states that freelancers are those 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.

The measure mandates that a written contract be executed by any hiring party with the freelance worker.

Such written contracts made mandatory under the bill in hiring freelancers should also include:

  • the itemization of all services to be provided
  • details of compensation and other benefits, including rate, method and schedule of payment
  • period of employment
  • grounds for breach of contract on the part of both the hiring party and the freelancer and
  • Tax Identification Number (TIN) of the freelancer

In addition, the bill provides that no modification of the terms of the contract shall be enforceable unless signed by both the hiring party and the freelance worker.

The bill also lists unlawful practices such as engaging a freelance worker without a contract or payment of compensation later than 15 days after the date stipulated by both parties.

Those who will be found in violation of the law will be fined from P50,000 to as much as P500,000.

Any person or such person’s authorized representative aggrieved by a violation of this bill may file a complaint with the Labor department, through the Undersecretary for Workers with Special Concerns, without prejudice to the filing of civil action in appropriate cases.

Further, House Bill 6178 mandates that freelancers are entitled to tax relief within the threshold provided under the National Internal Revenue Code of 1997, as amended, and Republic Act No. 9178, otherwise known as the Barangay Micro Business Enterprises Act of 2002.

The bill also tasks BIR to designate a special lane or assistance desk to assist freelancers on their inquiries and in complying with the processing of documents, including the registration requirement. — Llanesca T. Panti/RSJ, GMA Integrated News