IT has been a dream of many Filipino freelancers like me, particularly those performing various online tasks for foreign clients, to be protected under Philippine laws. That law might be passed soon as the House Committee on Labor and Employment on Monday endorsed the Freelancers Protection Act for plenary approval.
The substitute bill consolidates all of the legislation filed by several members of congress for the protection of freelancers or the self-employed that includes online contractors, creative talents, media workers, theater actors, and musicians, among many other workers in the so-called ‘gig economy’.
In a virtual hearing last January 25, the House Committee on Labor and Employment, chaired by Rep. Enrico Pineda and co-chaired by Baguio Rep. Mark Go, amended and approved the draft committee report on the substitute bill to House Bill Nos. 1527, 2019, 3219, 3951, 6132, and 7790 or the proposed Freelancers Protection Act.
The proposed legislation defines a freelancer 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, or registered as self-employed with the Bureau of Internal Revenue, that is hired or retained as an independent contractor to do work according to one’s methods and without being subjected to the control of the hiring party, except only as to the results of the work, and is hired to provide services in exchange for compensation.
The bill would also advance the rights and welfare of freelancers, ensuring them entitlement to humane working conditions and a proper living wage. It provides, among others, that the hazard pay to be granted to freelancers shall be equivalent to at least 25 percent of the total payment for the period of work deployment unless there is a more favorable fee stipulated in the contract.
Christopher de Venecia, representative of the fourth district of Pangasinan, one of the primary authors of the Freelancers Protection bill, said it is about time that Filipino freelancers are protected by the country’s labor laws. Most importantly, he said, this will finally give a semblance of legitimacy to the workers in the freelancing community who have been “overlooked by the state in terms of policy”.
The law also affords multiple protections around freelance contracts, compensation, and retaliations from clients, as De Venecia said freelancers, online or offline, are in a “dire situation” whenever issues are encountered in the now multimillion-dollar industry. In the Philippines, freelancing has accelerated amid the Covid-19 pandemic as many of the unemployed have started freelancing to make ends meet during the longer than usual lockdowns.
During several hearings conducted in Congress, it has been revealed that a system of “kaliwaan” in the freelancing community, where mostly those from the creative industries are employed, is prevalent thus making freelancers vulnerable to abuse from unscrupulous clients who will either change the terms of their contracts in the middle of project implementation or even go as far as to changing payment agreements or evade payment altogether.
It was also known during the previous hearings that several freelancers are at a loss whenever they want to seek redress from exploitative clients as most of them don’t even have agreements or contracts drafted before doing any project.
But before we celebrate this milestone, I have a few contentions. While I am happy that the measure has finally been passed at the committee level, I find some provisions of the law vague, given that the measure solely concentrates on self-employed individuals and not online freelancers whose clients are mostly based overseas. How will freelancers with the help of government agencies like DOLE or BIR run after or seek prosecution of abusive foreign clients who are based in New York, Dubai, London, or Sydney? That is something we have yet to see in the provisions of the law. Maybe the Implementing Rules and Regulations or IRR will give further clarity to this concern?
Another issue I have long observed in the freelancing community is that most freelancers are adamant about registering with the DTI or BI, claiming this will take a huge slice off the meager income they get from every gig or small project they undertake. Other freelancers are also hesitant to seek compensation whenever they are victimized by dubious clients as they are constrained by the high cost of legal expenses especially if the client is based overseas and can only be contacted online.
On these concerns, Rep. De Venecia admits it is still a long way for the measure to be passed into law citing a counterpart measure in the Senate is also pending. The Senate version of the Freelancers Protection Act or Senate Bill no. 1810 is co-sponsored by Senators Joel Villanueva and Bong Revilla.
De Venecia also stressed an important provision of the bill is Section 22 of the Information and Education Campaign provision. I agree with the young lawmaker’s views that there is a lack of awareness among freelancers on how to register as a taxpayer with the BIR. Most often, due to governmental red tape and the rigors of registering, many freelancers are discouraged from registering with the BIR. Another problem discussed by the Pangasinan legislator is that most freelancers are not cognizant of the country’s legal system. Many freelancers are not even aware of how and where and to what agency they should file their complaints against erring clients. As a result, some complaints are left in some online forums or on social media instead of proper agencies.
Lastly, the proposed measure also tasks implementing agencies like DOLE, DTI, BIR, and local government units to come up with programs to reach out to freelancers to improve awareness on tax payment as well as to inform freelancers of their contractual rights and to seek redress whenever a client breaches their contract. With all these discussions brewing in both houses of congress, I just hope this Freelancer Protection Act gets approved before the 18th Congress closes.
