1. ORIENTATION ON RECRUITMENT AND
PLACEMENT FOR LOCAL EMPLOYMENT
AND JOB CONTRACTING
1

2. LABOR CODE PROVISION
Article 25
“... the private employment sectors
shall participate in the recruitment
and placement of workers locally
and overseas, under such guidelines,
rules and regulation, as may be issued
by the Secretary of Labor and
Employment.”

3. LABOR CODE PROVISION
Article 13 (b) “recruitment and placement”
Any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring
workers, and includes referrals, contract
services, promising or advertising for
employment, locally or abroad, whether
for profit or not.

4. ADMINISTRATIVE CODE OF 1987, BOOK IV, TITLE VII
Section 17. Bureau of Local Employment.
The Bureau of Local Employment shall -
(4) regulate and supervise private sector
participation in the recruitment and
placement of workers locally under
such rules and regulations as may be
issued by the Secretary;

5. PART I
RULES AND REGULATIONS
GOVERNING PRIVATE
RECRUITMENT AND
PLACEMENT AGENCIES FOR
LOCAL EMPLOYMENT

6. RECRUITMENT AND PLACEMENT
PRPA
Service Contract
EMPLOYER
(AGENT)
Employment
Recruitment Contract
Contract
WORKER

7. LICENSES /AUTHORITIES ISSUED TO PRPA
AND REPRESENTATIVES
SCOPE VALIDITY
LICENSE National two (2) years
AUTHORITY TO OPERATE Regional co-terminus
BRANCH OFFICE with license
AUTHORITY TO RECRUIT Regional co-terminus
with license
No license shall be transferred, conveyed or
assigned to any other person or entity

8. CO-TERMINUS VALIDITY OF AUTHORITY
VALIDITY
Nov. 21, Nov. 20,
LICENSE 2007 2009
AUTHORITY TO OPERATE
Nov. 20,
BRANCH OFFICE 2009
Nov. 20,
AUTHORITY TO RECRUIT 2009

9. QUALIFICATION AND DOCUMENTARY
REQUIREMENTS
• Application for PRPA License
Qualifications:
o if single proprietorship: must be Filipino citizen
and must have a minimum networth of
P200,000.00
o if partnership or corporation: 75% of the
authorized capital stock must be owned and
controlled by Filipino citizens & a minimum
paid-up capital of P500,000.00
o of good moral character
o An office space with a minimum floor area of
fifty (50) square meters

10. A. Application for PRPA License
Requirements
o if single proprietor: A filing fee of P1,000.00 and certified
copy of the Certificate of Registration of Firm or business
name
o if partnership or a corporation: A filing fee of P3,000.00 and
a certified copy of the Articles of Partnership or
Incorporation
o A sworn statement of assets and liabilities and/or duly
audited financial statement;
o Owner's certificate/title of office location or contract of lease
of office space for at least two (2) years;
o NBI clearance of the applicant, partners or all the officers;

11. A. Application for PRPA License
Requirements (CONT’D)
o Income Tax for at least two (2) years
o A verified undertaking that the applicant shall:
 not engage in the recruitment of children
 assume full responsibility for claims and liabilities
o Organizational structure and list of all officers
o Specific address and location map of the
Office/proposed office
o List of all authorized representatives,

12. B. Application for Authority to
Operate Branch Office
Requirements
o Filing fee of One Thousand Pesos (P1,000.00)
o Certified copy of the current license
o Organizational structure
o NBI clearance, bio-data of the branch manager and
staff members;
o Minimum floor area of fifty (50) square meters;
o Certification that the licensee has no pending case
o List of all authorized representatives

13. C. Application for Authority to Recruit
Requirements
o Letter request by the agency;
o Copy of current license;
o Proposed recruitment activities ;
o NBI clearance and bio-data of the representative;
o Clearance from previous agency, if applicable; and
o Previous Authority to Recruit, in case of renewal
No application shall be accepted unless all the requirements
have been complied with.

14. FEES
 LICENSE FEE - (P6,000.00)
 REGISTRATION FEES:
 AUTHORITY TO ESTABLISH
BRANCH OFFICE - (P3,000.00)
 AUTHORITY TO RECRUIT - (P1,500.00)

15. FEES
Ì SERVICE FEE - shall not exceed twenty percent
(20%) of the annual basic salary of the worker
Ì PLACEMENT FEE - shall not exceed twenty
percent (20%) of first month's basic salary
Ì TRANSPORTATION EXPENSES - transportation
expenses of the worker from the place of origin to
the place of work shall be charged against the
employer

16. BONDS
CASH BOND - (P 25,000.00)
SURETY BOND - (P100,000.00)
ADDITIONAL SURETY BOND -
For each branch office (P 50,000.00)

17. Recruitment Process
START
Agency/Representative and
Sole proprietor or Representative
recruit enters into Recruitment
present license or Authority to
Contract
DOLE/PESO
Agency/Representative submits
DOLE/PESO verifies license or list of recruits and documents to
Authority and supervise DOLE and PESO
recruitment process
DOLE review list and documents
and issue Certification
Recruit submits medical and birth
certificate
Agency provide recruit with
stamped envelope
Agency/Representative explains
Recruitment Contract to qualified DOLE of origin notifies DOLE
recruits of destination

18. PROHIBITED PRACTICES, FINES AND
PENALTIES
GROUNDS FOR 3 MONTHS SUSPENSION OF
LICENSE and FINE of P5,000.00
 Violation of any of the provisions of Section 7,
13, 14 of these Rules
 Violation of DO 21, series of 1994 regarding
publication of job vacancies
 Non-issuance of official receipt for every fee
collected

19. PROHIBITED PRACTICES, FINES AND
PENALTIES
GROUNDS FOR 3 MONTHS SUSPENSION OF
LICENSE and FINE of P5,000.00
 Charging or accepting directly or indirectly any
amount in excess of what is prescribed
 Disregard of lawful orders and notices issued by
the Secretary or his duly Authorized
Representative
 Non-observance of the procedures on
recruitment

20. PROHIBITED PRACTICES, FINES AND
PENALTIES
GROUNDS FOR CANCELLATION OF LICENSE
and FINE of P10,000.00
 Violation/s of the conditions of license
 Engaging in act or acts of misrepresentation for
the purpose of securing a license or renewal
thereof
 Continuous operation despite due notice that

21. PROHIBITED PRACTICES, FINES AND
PENALTIES
GROUNDS FOR CANCELLATION OF LICENSE
and FINE of P10,000.00
 Incurring two (2) suspensions by a PRPA based
on final and executory orders
 Recruitment and placement of workers in
violation of RA No. 7610 as amended by RA
No. 7658
 Violation of any of the provisions, particularly
Art. 34 of the Labor Code, as amended, its
implementing Rules and Regulations

22. PROHIBITED PRACTICES - Article 34 of the Labor
Code
 To charge pr accept directly or indirectly any amount greater than the
allowable fees
 To furnish or publish any false notice or information
 To give any false notice, testimony, information or document
 To induce or attempt to induce a worker to quit his employment for another
employment
 To influence or attempt to influence any person or entity not to employ a
worker
 To engage in the recruitment and placement of workers in jobs harmful to
public health or morality
 To obstruct or attempt to obstruct inspection by DOLE
 To fail to file reports on the status of employment, placement, vacancies,
etc
 To substitute or alter employment contract

23. ILLEGAL RECRUITMENT – Art. 38 of the Labor Code
 Any recruitment activities, including the prohibited
practices under Art. 34 to be undertaken by non-
licensees or non-holders of authority shall be
deemed illegal and punishable under Art. 39
 When committed by a syndicate or in large scale
shall be considered economic sabotage
 Syndicate if carried out by a group of 3 or more
persons
 Large scale if committed against 3 or more persons
individually or as a group

24. PENALTIES – Art. 39 of the Labor Code
OFFENSE/OFFENDER PENALTY
Economic sabotage Imprisonment and fine
of P100,000
Licensee/holder of Imprisonment of 2-5
Authority years/Fine of P10,000 –
P50,000
Non-licensee or Imprisonment of 4-8
Non-holder of Authority Years/Fine of P20,000 –
P100,000
Corporation/Partnership Penalty to officer/s
Association/Entity responsible for violation

25. PART II
DEPARTMENT ORDER NO. 18-02
Rules Implementing Articles 106-109 of the
Labor Code, as Amended

26. Department Order No. 18-02
Section 3. Trilateral Relationship in
Contracting Arrangement
PRINCIPAL
Job-contract
Employment
contract
CONTRACTOR worker

27. Sec. 5 – Prohibition Against LOC
Elements to establish labor-only contracting:
The contractor or subcontractor does not have
substantial capital or investment which relates
to the job, work or service to be performed
AND the employees recruited, supplied or
placed by such contractor or subcontractor
are performing activities which are directly
related to the main business of the principal;
OR
The contractor does not exercise the Right to
Control over the performance of the work of

28. Section 6. Prohibited Acts
Section 6 prohibits the following:
 Contracting out of job, work or service when not
done in good faith and not justified by the
exigencies of the business which results in the
termination of regular employees and reduction of
work hours or reduction or splitting of the
bargaining unit
 Contracting out of work with a “cabo’

29. Section 6. Prohibited Acts
 Taking advantage of the economic situation or
lack of bargaining strength of the contractual
employee, or undermining his security of tenure or
basic rights, or circumventing the provisions of
regular employment, in any of the following
instances:
 Requiring to perform functions which are
currently being performed by the regular
employees of the principal or of the
contractor or subcontractor;

30. Section 6. Prohibited Acts
 Requiring to sign, as a precondition to employment or
continued employment, an antedated resignation letter; a
bank payroll; a waiver of labor standards including
minimum wages and social or welfare benefits; or a
quitclaim releasing the principal, contractor or
subcontractor from any liability as to payment of future
claims;
 Requiring to sign a contract fixing the period of
employment to a term shorter than the term of the contract
between the principal and the contractor or subcontractor,
unless the latter contract is divisible into phases for which
substantially different skills are required and this is made
known to the employee at the time of engagement;

31. Section 6. Prohibited Acts
 Contracting/subcontracting through in-house
agency;
 Contracting/subcontracting of job, work or service
DIRECTLY RELATED to the principal’s business
on occasion of strike or lockout;
 Contracting/subcontracting of job, work or service
being performed by union members when such
will interfere with, restrain or coerce employees in
the exercise of their rights to self organization

32. Section 8. Rights of Contractual Employees
Generally, all rights of regular employees are
enjoyed by contractual employees
Specifically, the contractual employee has the
right to -
 safe and healthful working conditions;
 labor standards such as service incentive
leave, rest days, overtime pay, holiday pay,
13th month pay and separation pay;
 social security and welfare benefits;
 self-organization, collective bargaining
and peaceful concerted action; and
 security of tenure

33. Section 9. Terms and Conditions of Contract
The contract shall be in writing and shall include the
following:
 Specific description of job, work or service;
 The place of work and terms and conditions of
employment, including a statement of
wage rate applicable to the individual
contractual employee; and
 The term and duration of employment, which
shall be coextensive with the contract of the
principal and subcontractor, or with the specific
phase for which the contractual employee is
engaged

34. Department Order No. 18-02
Section 11. Registration of Contractors of
Subcontractors
Registration is necessary for an
effective labor market information
and monitoring.
Failure to register shall give
rise to the presumption that
the contractor is engaged
in labor-only contracting.

35. Department Order No. 18-02
Section 12. Requirements for registration
c. Name, business address, areas covered
d. Names and addresses of officers
e. Nature of business and industries
where to operate
d. Number of regular workers; list of clients,
number of personnel to be assigned
to each client
e. Description of the phases of the contract and number of
employees covered in each phase
f. Copy of audited financial statement or latest ITR

36. Department Order No. 18-02
Section 12. Supporting documents
c. Certified copy of cert. of registration
with SEC/DTI/CDA/DOLE
b. Certified copy of license or
business permit from LGU

37. Department Order No. 18-02
Section 13. Filing and Processing of
application
Venue – where the applicant
principally operates
Registration Fee - P100.00
Processing Period - 7 working days

38. Department Order No. 18-02
Section 15. Annual Reporting
Submit to the appropriate Regional Office not later
than the 15th of January of the following year:
- List of contracts entered with the principal
- Number of workers covered by each contract
- Sworn undertaking that the benefits of SSS,
HDMF, Philhealth, ECC and remittances to
the BIR due its contractual employees have
been made

39. Department Order No. 18-02
Section 16. Delisting of Contractors/
subcontractors
Grounds for delisting:
 Non-submission of contracts between the
principal and contractor/ subcontractor when
required
 Non-submission of annual report
 Findings through arbitration that the
contractor/subcontractor has engaged in
labor only contracting and other prohibited
activities
 Non compliance with labor standards and
working conditions

40. Department Order No. 18-02
Section 17 – Renewal of Registration
Renewal of registration is every three
years upon compliance with the
following:
• allowable contracting activities
• administrative reporting requirements

41. Department Order No. 18-02
Section 20 – Supersession
Contracting or subcontracting
arrangements in the construction
industry, under the licensing coverage of
the Philippine Constructors Accreditation
Board (PCAB) and shall not include
shipbuilding and ship repairing works,
however, shall continue to be governed
by D.O. 19, series of 1993.

42. Department Order No. 18-02
LIABILITIES
• Principal deemed as DIRECT EMPLOYER
and solidarily liable in case of violations
by the contractor
• Principal solidarily liable in case of pre
termination of contract for reasons not
attributable to the fault of the
contractor or subcontractor

43. End of Presentation
The Rules and Regulation Governing
Private Recruitment and Placement
Agencies as well as the List of Licensed
PRPAs, Branch Offices and Authorized
Recruiters, and Registered Contractors
under DO 18-02 are available at
www.ble.dole.gov.ph