New Law Mandates 100% of Service Charge Be Fully Given To Workers

President Rodrigo Duterte signed Republic Act No. 11360 last August 7, amending a provision in the labor code in order to create the ‘service charge law’. In doing so he effectively changed the proportion of service charge workers are given.

waiter service worker

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Establishments like hotels and restaurants will now be required to give a full 100% of service charge collected to its covered employees. This differs from status quo wherein only 85% of service charge collected is given to the covered staff, while the remaining 15% is distributed to the management staff.

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According to the labor code, managerial employees are those “with powers or prerogatives to lay down and execute management policies or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or to effectively recommend such managerial actions.”

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Senator Joel Villanueva, who authored the bill, celebrated: “The law allows our frontline service workers to enjoy the fruits of their labor, the reward for providing good, quality service.”

What do you think of this law?

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