Remote Employee Rights in the Philippines: A Practical Playbook for Australian Companies
Remote employee hiring in the Philippines is one of the most strategic moves Australian companies can make today. The market offers an English-speaking workforce, competitive costs, and a growing pool of highly skilled professionals. For many CEOs and COOs, it seems like a straightforward way to accelerate growth.
But the reality is more complex. The Philippines operates under a different labor framework than Australia, and misunderstanding employee rights is one of the most common—and costly—mistakes foreign companies make. What seems like a simple freelance agreement can quickly become a compliance issue. What appears to be a minor payroll oversight can evolve into a dispute.
For Australian leaders who are used to the clarity of the Fair Work Act, the Philippine system requires careful navigation. This guide provides a concise but comprehensive overview of remote employee rights in the Philippines and demonstrates how the Employer of Record (EOR) model eliminates compliance risk while enabling sustainable growth.
The Philippine Labor Landscape: What Australian Executives Need to Know
Unlike Australia, where workplace laws are unified under the Fair Work Act 2009, the Philippines operates under a mix of Labor Code provisions, government regulations, and mandatory benefits systems.
Here are the core employee rights every Australian business must comply with:
Minimum Wage Standards
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Wages are not uniform nationwide—they vary by region and sector.
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In Metro Manila, minimum wages are higher than in provincial areas.
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Employers must stay updated, as rates are reviewed regularly by the Regional Tripartite Wages and Productivity Boards.
13th-Month Pay
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Mandatory for all employees, equivalent to one month’s basic salary each year.
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Must be paid no later than December 24, regardless of performance.
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Failure to comply can result in penalties and disputes.
Leave Entitlements
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Service Incentive Leave (SIL): At least five paid days after one year of service.
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Maternity Leave: 105 days with pay, extendable by 30 days without pay.
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Paternity Leave: Seven days with pay for married male employees.
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Additional leaves for solo parents, women and child workers, and more.
Termination Protections
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Strict due process is required.
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Termination must be based on just cause (e.g., misconduct, fraud) or authorized cause (e.g., redundancy, retrenchment).
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Failure to follow due process exposes companies to reinstatement orders and financial damages.
Mandatory Contributions
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Employers must remit contributions for:
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SSS – Social Security System
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PhilHealth – National health insurance
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Pag-IBIG Fund – Housing and savings program
These contributions are non-negotiable. Missing or delaying them can harm both employees and the company.
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The Hidden Risks of Non-Compliance
Hiring Filipino workers without properly addressing employee rights can quickly turn from opportunity to liability. Here are the most common risks:
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Regulatory Sanctions: Government agencies can impose fines, back-pay obligations, and compliance orders.
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Employee Disputes: Workers can file complaints with the National Labor Relations Commission (NLRC), leading to costly cases.
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Reputation Impact: In today’s digital landscape, word spreads quickly among Filipino professionals—damaging your employer brand.
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Leadership Distraction: Senior executives end up handling disputes instead of focusing on growth and strategy.
For Australian companies expanding into the Philippines, these risks are not abstract—they are real, recurring issues that derail many well-intentioned expansion plans.
Employer of Record (EOR): A Strategic Compliance Solution in Hiring Remote Employees
This is where the Employer of Record (EOR) model enters.
An EOR in the Philippines acts as the legal employer on behalf of an Australian company. The client company directs the day-to-day work, but the EOR assumes responsibility for:
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Drafting and managing legal employment contracts
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Handling payroll, tax withholdings, and mandatory contributions
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Administering employee benefits such as health insurance and leave entitlements
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Ensuring compliance with all local labor laws and reporting requirements
Why It Matters for Australian Leaders
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Compliance Assurance: Every employee right is respected, every contribution remitted.
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Entity-Free Expansion: Hire talent without registering a local subsidiary.
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Cost Efficiency: Avoid the overhead of in-house HR and compliance functions.
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Agility: Scale teams up or down without being locked into complex local structures.
Put simply, an EOR eliminates the legal and administrative burden while allowing Australian leaders to focus on growth, strategy, and performance.
Compliance as a Growth Strategy
Too often, compliance is seen as a cost center. In reality, for Australian companies in the Philippines, it is a growth enabler:
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Retention Advantage: Filipino employees value employers who pay on time, provide benefits, and respect rights.
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Employer Brand Strength: Being known as a compliant and fair employer makes it easier to attract top talent.
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Investor Confidence: Companies with clean compliance records reduce risk for investors.
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Leadership Focus: With HR compliance handled, executives can concentrate on scaling operations.
In short: compliance is not bureaucracy—it’s a competitive edge.
Why EOR in Cebu Is Especially Strategic
Cebu has emerged as a prime hub for outsourcing and remote work. With a thriving ecosystem of Virtual Assistants, BPO professionals, and tech talent, many Australian companies are setting up teams here.
An EOR in Cebu, like The Company Philippines EOR, provides local expertise and tailored solutions, ensuring:
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Compliance with regional wage laws
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Access to top-tier talent in Cebu IT Park and beyond
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Integration with coworking and office spaces for hybrid setups
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A trusted partner embedded in the local business community
For businesses looking to hire Virtual Assistants in Cebu IT Park or scale specialized teams, this combination of EOR and local infrastructure is uniquely powerful.
Conclusion: The CEO’s Next Step
The Philippines offers Australian companies a tremendous opportunity to scale with skilled, cost-effective, English-speaking talent. But employee rights and compliance cannot be treated as afterthoughts. They are the foundation of sustainable, long-term growth.
The Employer of Record model provides the strategic bridge Australian leaders need:
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Protecting employee rights under Philippine law
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Eliminating compliance risk
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Enabling rapid, flexible expansion
For CEOs, the decision is not whether to prioritize compliance—it’s whether to leverage it as a source of strength.
By partnering with a trusted provider like The Company Philippines EOR, Australian businesses can expand in the Philippines with confidence, knowing that their teams are not only compliant but also supported, valued, and positioned for long-term success.
Scale Your Startup the Smart Way
Building a startup means moving fast, staying lean, and making every decision count. Expanding into the Philippines gives you access to world-class talent at competitive costs—but only if you hire the right way. With The Company Cebu’s Employer of Record services, you can onboard remote employees quickly, stay compliant with Philippine labor laws, and avoid the costly mistakes that slow startups down.
Whether you’re hiring your very first team member abroad or scaling a growing operation, we’re here to make the process seamless, compliant, and built for growth.
It’s time to scale smarter, not riskier. Ready to take your startup global with confidence? Let’s make it happen.
