Part III of The Definitive Guide to Hiring Remote Employees from the Philippines
In Part II of the series, we talked about how to hire your first VA from the Philippines. But before you can do that, there are things you will have to know about how it works and what to expect to create a fruitful working relationship.
And if you’re still not sure if hiring Filipino VAs is for you, you can read our 8 reasons why it’s a game-changer for your business.
So what do you need to know about hiring a VA from the Philippines? We break down the essential information.
Philippine Labor Laws
Before you go out and hire your first VA, you will want to make sure everything is done by the book to avoid any future troubles.
First, you need to establish what kind of worker you are employing. That is, if you are hiring a full or part-time employee or if you are hiring an independent contractor. Generally, the lines are pretty vague between the two classifications, especially when hiring a remote worker, so it’s good to be clear and direct in your discussion before the hire.
Both regular employees and independent contractors are governed by the Labor Code of the Philippines, but Department Order 174 also governs and protects Filipino independent contractors.. Understanding which parts apply to the hire you are making with a remote worker in the Philippines is crucial to ensure you will not be vulnerable to any legal issues.
For hiring remote employees from the Philippines, it is generally recommended that the employer lays out a comprehensive contract to sign before work begins. It can be a regular contract if hiring a part-time or full-time employee, or an Independent Contractor Agreement if hiring a contractor.
Either way, the contract should include the following:
- A warranty that the worker is complying with local tax laws and following the appropriate labor regulations that apply to them
- An agreement that any work the contractor produces on the assignment basis is the intellectual property of the employer and their company
- The expected schedule of work and the expectations for the working relationship of both parties
- As prescribed in the Labord Code and DO 174, the contract needs to spell out the specific description of the job
- A statement of the wage rate both parties agreed to for the work produced
Holidays in the Philippines
The Philippines has quite a large number of public non-working holidays every year. With such a diverse culture and history, there are many days to honor and Filipino often take full advantage of these days to relax and have fun with their families.
This can often be a problem for companies looking to hire remote employees from the Philippines, as Filipino REs expect to have days off on holidays that may interfere with a foreign company’s calendar.
For 2019, these are the following regular holidays and special non-working days (denoted by *) in the Philippines:
- 1 January – New Year’s Day
- 5 February – Chinese New Year*
- 25 February – EDSA Revolution Anniversary*
- 9 April – Day of Valor
- 18 April – Maundy Thursday
- 19 April – Good Friday
- 20 April – Black Saturday*
- 1 May – Labor Day
- 12 June – Independence Day
- 21 August – Ninoy Aquino Day*
- 26 August – National Heros’ Day
- 1 November – All Saints’ Day*
- 2 November
- 30 November – Bonifacio Day
- 8 December – Feast of the Immaculate Conception of Mary*
- 24 December
- 25 December – Christmas Day
- 30 December – Rizal Day
- 31 December – Last day of the year*
While the number of holidays in a single year can seem daunting for a prospective employer, there are ways to circumvent the possibility of losing precious work time. Before hiring a remote employee, agreements can be made regarding what days are non-working holidays and which days their work is expected. That way, they are bound by a prior agreement to complete their tasks on that day.
Of course, this would mean you would have to also agree on the appropriate compensation for working on a holiday, as the Philippines has specific laws about how much an employee should be paid for working on a holiday.
How to Pay Your Remote Staff
We are lucky to live in a world where money is easily transferrable across the world. And this is particularly good for people looking to outsource work to the Philippines. There are many platforms that can be used to pay your remote staff, safely and securely. These are the most popular ways of paying a remote employee:
PayPal is more popularly known as a platform for making online purchases, but it has also developed its own technology for transferring money online across countries. It’s a safe and reputable platform that has great security measures in place.
PayPal charges each transaction with a corresponding fee that depends on the source of the transfer (the country, if it was made with either a linked bank account or a card, and the amount) and the destination. The exchange rate on PayPal between currencies is also slightly higher than the real market exchange rate.
If you decide to use PayPal to transfer money, you and your employee will need to decide who shoulders the fee of transferring.
TransferWise is another platform for transferring money internationally. It has a similar formula to PayPal but has two key differences: the first is that TransferWise uses real-time exchange rates when transferring money internationally. The second is that unlike PayPal, the standard time for a transfer is at least two days. There is an express transfer option but it has an extra fee.
You will have to discuss times and who pays fees if you choose to pay your remote worker with TransferWise.
Electronic funds transfer
If you’re looking for a direct way to transfer money without a third party, an electronic funds transfer might be the best option for you. It is a transfer between two bank accounts so the process is safe and secure, but there can sometimes be some holdups that may delay compensation, which puts you at a vulnerable spot legally.
Cultural Differences Between the Philippines and the Western World
Though the Philippines is in many ways similar to the Western World because of its history with the United States, we can still expect some degree of difference between the cultures.
Close Family Ties
One cultural difference that usually surprises foreign bosses is how close Filipinos are with their families. And that doesn’t just mean direct family members, it includes everyone from their grandparents, aunts. uncles, cousins, second cousins, and just about everyone who is related to them. And because family is extremely important to Filipinos, you will usually hear about people taking the day off to celebrate an aunt or cousin’s birthday.
Because Filipinos may assume people from the West understand this, they can become surprised when their requests for a day off aren’t granted. That’s why it is important for both parties to go through days of the year to go over any planned absences or events, save for emergencies that cannot be foreseen. Letting your Filipino virtual employees know exactly what you expect from them can save you a whole load of trouble and can make the relationship easier and more open.
Giving and Receiving Feedback
Filipinos are generally uncomfortable with feedback. Giving feedback, even constructive criticism, is usually deemed as disrespectful to the authority figure. Most Filipinos either just lie or disappear from their places of employment when they become dissatisfied with work.
It is important to let your remote employees know that you appreciate and even seek out feedback and to create a trusting environment that will help them open up.
On the other side of the coin, Filipinos do not generally appreciate any kind of feedback as they see it as criticism. If you want to give feedback to your employee, you will need to be couple it with a compliment and be clear that you are satisfied with their work. Another route you can take to give feedback is to take more of a “coaching” tone that they will not misinterpret.
If you plan on taking advantage of the great benefits that come with hiring remote employees from the Philippines, you will need to know the facts about the reality of it to avoid any disappointments or problems in the future.
Being well-versed in Philippine Law is extremely helpful in understanding where your company stands as a foreign employer and how that relates to the Filipino remote employee you want to hire. Interestingly enough, you can actually find many Filipino legal assistant remote workers online to help you unravel the complexities of the Philippine Labor Code.
There are many holidays in the Philippines, and depending on the kind of worker you hire, you may be obliged to give them the day off on those days. But it is helpful to agree to terms about working on holidays prior to the hire to get the most out of your remote worker.
There are many ways to pay your remote worker, and it will be up to both employer and employee to make the decision about a payment method.
And though there are cultural differences between Filipinos and the West, these differences can be bridged with proper understanding, empathy, and open discussion.
Next time on this series, we tackle the hiring process of Filipino remote employees, including everything you need to know about the digital hiring process!