Filipino Freelancers’ Welfare: Assessing, Consolidating, and Proposing Legal Measures

Filipino Freelancers are on the rise. The ASEAN country even placed sixth in the world as the fastest growing market for the freelancing industry.

Because of the pandemic, millions turned into freelancing work globally. Many have shed off the security of permanent, full-time jobs, and others have no choice at all.

Freelancing, with all its glamour and insecurity (such as no benefits and predictable income), has often become a dangerous breeding ground for abusive practices and maltreatment. It could be a feast or famine.

Before things blow-up, the best thing that the legal powers can do is to set-up measures for the welfare of this sector.

“I don’t believe in a law to prevent a man from getting rich; it would do more harm than good. So while we do not propose any war upon capital, we do wish to allow the humblest man an equal chance to get rich with everybody else.”

~ Abraham Lincoln

I. Intro

Development of new technologies has changed the way the labor industry works. Due to the emergence of the need for online labor, freelancing as a job has skyrocketed.

According to the Online Labour Index, as of January 2021, the Philippines ranks 6^th in the market share for the gig economy which includes the categories: software development and technology, writing and translation, clerical and data entry, creative and multimedia, sales and marketing support, and professional services.

With the advent of online freelancing, there are not only new opportunities for the laborers, but also new risks. This includes the movement away from standard practices, which lead to a major impact on labor rights. Particularly, online freelancers are more prone to abuse than the “standard” employees due to the nature of their work.

Their non-standard work arrangements have been beneficial both for them and their employers. However, without proper regulations, abuse will surely come its way, specifically from the employers, who hold more power in this arrangement.

Despite this, the government lacks in providing for programs and institutions that would not only address the needs of freelancers, but also protect their rights and promote their welfare. Among the 14 bills consolidated, 18 elements which get to the root of the problematic working conditions have been selected and further reported on.

This research provides a comparison in occurrences of the elements in the bills. It also presents implications to related individuals and bodies such as the online freelancers, government, businesses and the academe.

The findings highlight drawbacks to the work and promotes several ways of addressing the needs and improving the working conditions of freelancers.

II. Objectives

To identify pending bills concerning online freelancers
To consolidate these existing measures which provide for a Magna Carta for online freelancers that shall protect their interests, promote their welfare, and build a freelancer-friendly environment.
To discuss the implications of the integration to online freelancers, government, business, and academia.
To give recommendations based on researchers’ findings, experiences as freelancers and exposure to the gig economy sector

III. Methodology

4.1 Introduction to the Topic

The COVID-19 Pandemic, reaching it’s one year on earth, had incapacitated our way of life and had pushed people to stay indoors for the fear of being infected by the virus. Borders were closed and strict implementations on crossing them has taken a toll on people trying to get to their jobs in other places and due to this, businesses and companies were forced to close due to decrease in sales thus causing the majority of people to be laid off from work.

With these trying times, people have coped and have resorted in online freelancing. According to a 2020 Upwork/Edelman Intelligence survey, the sudden shift of people to prefer online freelancing as an aftermath of the pandemic has skyrocketed.

In the United States of America alone, over two million people have started freelancing since COVID-19 broke out and took a toll on everyone’s quality of life. This had bolstered the workforce of Upwork, a freelance job platform, by 36%. Also, according to Freelancer Income Report of the digital financial services company, Payoneer, 70% of freelancers worldwide are millennials.

It could be foreseen that potential careers grounded on virtual platforms might be what the future has in store for people.

The rights, security, and tenure of the workers are now in question; whether or not the drastic rise of the platform would proportionately affect the aforementioned aspects. The researchers, being inquisitive with the entailed effects, decided to tackle this topic.

The researchers, having decided on the topic for research, had plotted out what was to be included and excluded in the study. In this subtopic of chapter 4 is a conclusive discussion of the scope and limitations in the study of the researchers.

4.2 Scope and Limitations

4.2.1 Geographical Target

The study’s scope will cover the various provinces, cities and islands of the Philippines wherein online freelancers reside.

4.2.2 Primary Beneficiaries/Main Target of this Research

Virtual/Digital
- Definition: Primarily uses electronic devices to render services remotely
- Uses the advantage of a certain skill / knowledge / talent
Can be Voice or Non-Voice
- Voice: Sales reps, Outbound/Inbound caller
- Non-Voice: Programmers, chat, accountants
Part-time or Full-time Freelancers but not under the status of an employee
Filipino or Non-Filipino Employer
Project-Based, Commission-Based, or Hourly
Working in the Ph, or Abroad

4.2.3 Secondary Beneficiaries/Minor Target

Independent Contractors or Corporate BPO’s
- I.C.’s are those hired by an entity regulated by Ph laws
- Examples: 51talk, Acadsoc, FoodPanda & Grab drivers
- Reason: These types of workers are hired by a juridical entity duly recognized and regulated by other specialized agencies such as SEC, PEZA, BCDA, etc; or the workers such as the riders are hired as independent contractors with regulatory supervisions by the government
Offline Gig Workers
- Examples: Make-up artists, models, actors r.e. agents
- Reason: Although they are included in the broader sense of term, the tools of the trade require less use of online, and therefore associate to offline personal or juridical entities which are subject to more regulations that are already in place

4.3 Research Instrument

Due to the pandemic and the restraints and dangers that follow with it, the researchers used secondary sources as the research instrument for the study by means of Internet-Based Research Method. This method of research relies on in-depth searching in the World Wide Web for related studies or literature, or in this study’s case, bills and laws that would conform to the researcher’s objectives. To further elaborate, the Internet-Based Research Method refers to any research method that uses the Internet to collect data (Neil J. Salkind, 2010). The use of the Internet offers new opportunities for access to participants allowing for larger and more diverse samples.

Although the research was limited to secondary sources, this would not make the study incomplete. The resources that the researchers have found using the above-mentioned method were substantial to the furtherance of this study. The Internet-Based Research Method not only made research much safer in the time of the pandemic but it had also broadened the horizon of the researchers in tapping bills and related legislation that could have only been discovered with the help of the Internet.

4.4 Consolidation of Bills

The researchers identified fourteen bills that qualified for freelancer’s protection and welfare. These bills were identified by the use of the Internet-Based Research Method either by finding the keywords in their title or in the main body of the bill. The researchers then evaluated each measure and highlighted and compiled common provisions and segregated elements that fall into the same criteria. The researchers then took note and highlighted uncommon provisions that were unique to each bill.

IV. Discussion

5.1 Identification of Bills

Fourteen (14) bills qualified for freelancers’ protection and welfare. They were identified by either finding the keyword in their title or in the main body of the bill. The bills vary from having a very broad scope, such as encapsulating the entire informal economy in various sectors, down to the most specific niche of online freelancers.

This also means that the need or urgency to pass this law is ripe for legislation since not one, not two, but 14 legislators are pushing for it to pass.

5.2 Consolidation of Bills

The researchers evaluated each measure, highlighted common provisions, and segregated elements that fall on the same criteria. Additionally, significant measures were highlighted nevertheless their absence in other provisions. Such highlighted measures were considered highly relevant or unique as not to consider it as an inclusion.

5.3 Discussion of implications

Upon consolidation, eighteen (18) elements stood out which can constitute the aggregated Magna Carta for online freelancers. The following are both visual and textual representations of such elements:

Chart 1: Highly-common shares represent majority of the bills (above 50%), while the less-common slice represent less than 50% of the bills. 33% of elements are present in the majority.

Chart 1: Among the eighteen, 7 elements were common among 7 to 10 bills; while 11 elements were common in 2 to 5 bills. To put it in percentage, only 38% of the elements are supported by majority (50%+1), while 62% of elements are supported by less than half of the bills. Meaning, more than half of the measures are not simply doing “redundancy of work” or mere copying of legal provisions. Each has its own set of insights, recommendations, and solutions to the problem. This also means that the majority of the bills, have 38% common elements in mind that enable this legislative action to take place.

Among the most common in the measures are Social Security System and health care benefits, which rank top 1 or appearing in ten bills; while the following five elements are common in nine bills: (a) creation of or assignment to a governmental committee, (b) unification through a local organization, (c) support services (training, collateral-free credit, marketing assistance), (d) laws against labor-aversed conditions (bonded labor, hazardous work), and (e) labor standards and enforcement of labor laws.

The other half of the elements, however, are less common. This is due to the fact that they are provided in less than half of the related bills. Nevertheless, the highlighted elements are significant to constitute a well-rounded legal provision. They are the following which their respective number of legal provisions: (f) Security of workplace, (g) Allocation from National Budget and other initiatives, (h) Annual Dues To Be Accrued for the Development of Sector, (i) Required to Register for Income Tax, (j) Develop a System of Registration, (k) Required Written Contract, (l) Civil and Criminal Penalty for violators, (m) Requisites for Employment Agreement, (n) Graduation to formal status, (o) Tax Exemption, (p) Night Shift Differential and Hazard Pay, (q) Work for Minor Age.

The researchers assessed the results and systematically arranged the elements based on their corresponding implications to respective sectors. However, these consolidated provisions do not jeopardize the fact that when certain provisions do not make it to become a law, the rest is still deemed relevant to the subjects and the latter should take necessary steps recommended by this research and/or other studies.

5.3.1 Implications to Online Freelancers

The following provisions will have the most impact on online workers when these consolidations take place, were passed, and promulgated.

(h) Annual Dues To Be Accrued for the Development of Sector

The main challenge for this is how to encourage the freelancing community to onboard in such an organization. However, with the help of the government and the private sector, the community can offer benefits for members, empowerment sessions, network, learning opportunities, and the like.

(i) Required to Register for Income Tax

In the time of the pandemic, this can be eased, but having the internal revenue encapsulate these concepts into the tax system certainly opens up opportunities for both sides.

Although there are already existing measures to tax freelancers, legislative acts can solidify these processes and address current systemic challenges that will establish national uniformity.

The government can have an additional means of revenue, while freelancers have more established documents that can prove their entity, access to credit, public documents as proof, and a way to contribute to nation-building.

(k) Required Written Contract

Government-supervised contracts would be a tremendous help as an added security for both the freelancers and clients. But the mandatory stipulation could be confined within the boundaries of those who have platformless contracts, prefer government-controlled escrow, or establishing a secure contract between Filipino Citizens.

Fact is, there are already private-led platforms that have a robust system of checks and balances. However, there are Filipinos who aspire to be freelancers and do not have a robust platform to start with and are subject to freelance scams. One of the best ways to help is for a government-led agency can provide a platform where workers can find, apply, accept, work and manage such contracts, and where clients can search, hire, and manage freelancers.

(n) Graduation to formal status

This element is equivalent to online courses with certification but the main challenge for this is having the freelancers to grasp its benefits and procedure. Although this digital proofing is already existing in agencies like TESDA, such graduation or certification status may be incorporated into the said agency or other, which can give Filipino freelancers more credence and confidence as they face the world of freelancing.

(o) Tax Exemption

Tax exemption should be materialized particularly as a means of help for those starting out. A law or a section could be devoted providing exceptions of tax compliance for new graduates, first time freelancers or those who just transitioned to such environment.

(q) Work for Minors (awareness of limitations)

The freelancer community should also be made aware of the limitations of having minors to work or perform ‘freelance gigs.’ In fact, the building up of “soft skills” could ultimately be honed through practical exposure to online work but measures could be set in place such as providing a healthy time schedule or student-friendly compensation.

The freelancing sector has a total of 6 relevant elements to take heed of.

5.3.2 Implications to Government

(a) Dedicated Entity / Creation of or assignment to a governmental committee

The shift to digital revolution lies in the hands of the government. The government sector has one of the most elements to take observance of if these consolidated provisions take place. In this research, a total of eighteen (18) elements fall under this sector which are identified by their alphabetical ID in the proceeding paragraphs.

The following are data systemization in nature:

(j) Developing a System of Registration is the crucial first step to have the system of data for freelancers. This step will lead to precise management activities such as (a) Record-keeping and monitoring, (b) Escrow/administration of contracts, (n) Graduation to formal status (standard compliance).

The following are regulative in nature:

Enforcing protections for freelancers is one of the top powers that the government, if not them alone, can enforce. (p) Night-shift differential and Hazard Pay elements were mentioned in several measures but the researchers think that this would be necessary since many freelance work setups conform to the timezones of the West or other international companies. Observing such pay would be irrelevant in the eyes of the employers. (o) Tax Exemption or compliance fees exemption could be crucial especially for first-time job-hunters, new graduates, and new arrivals to the freelance world. Agencies that can be tapped are BIR and LGUs which can implement such exemptions.

The Enforcement of (e) sound labor standard, (d) prohibitions against labor-aversive conditions (bonded labor, hazardous work), (f) Security of workplace (infrastructure such as internet, electronics), (q) Limitations of work for the Minor Aged would need the assistance of the government; although since most freelance jobs are mental or creative work, the violations may not be as rampant as those labor set-ups that require hard labor.

Digital revolution is actualized closer to individuals when there’s (b) Unification through local government organization. City and Barangays Officials and Sangguniang Kabataan officers could be tapped for knowledge dissemination and skill-building campaigns.

The following are financial in nature:

(c) Support services for freelancers such as government-managed credit programs and marketing assistance will be a tremendous help especially those who would like to build a start-up agency. Start-up agencies are those well-experienced freelancers who would like to train, manage, and provide freelance services but do need start-up capital or financing to buy equipment, overhead, internet, office rents, furnitures, and more. Financial wisdom seminars could also be upheld where financial gurus, startup founders, and successful freelancers could be tapped.

The government can delegate and oversee an agency that will hold (h) Annual Dues To Be Accrued for the Development of Sector. Such funds, as stated, will be used for furtherance of the community’s soft and hard skills, and networking capital. Awareness amongst our congressmen will be crucial to achieve (g) Allocation from National Budget and other initiatives (GAA) such as (c.) Access to Credit or Loans will need government help for such development to materialize.

The Judiciary and Law-Enforcement sector, specifically, could be tapped in order for the following measures to be actualized: (l) Civil and Criminal Penalty for violators, (q) Work for Minor Age (awareness).

5.3.3 Implications to Businesses

In contrast to government-led agencies for freelancer development, the private sector’s role for (b) Unification of freelance development initiatives, and (c) support services (credit, training) will be an essential factor.

Private establishments have a crucial role for the implementation of internal policies against (d) labor-aversive conditions, establishment of (e) labor standards and policies, and implementation of (f) well-rounded security of the workplace.

They can work together with the government for awareness drives on (l) Civil and Criminal Penalty for violators, (m) Employment guidelines with freelancers, (n) Graduation to formal status or official certification, and observations of (q) Work limitations for minor freelancers.

5.3.4 Implications to Academe

Just like the private sector, the academe has an essential role for building a culture among the youth for freelancing or start-up such as (c) Support services or Freelance Clinics, offering hard skill courses, externships, and partnerships with the private sector.

The academe can share or overlap roles with businesses but have a more dominant role in inculcating awareness, forming culture, and training the youth that will suit their overall to a well-rounded and well-supported freelance ecosystem.

The future for Filipinos could be one that no longer needs many to leave their families, but instead start their ventures here in the homeland.

VI. Conclusion

The research consolidated 14 bills which aim to address the needs of freelancers, protect their rights and promote their welfare. In the 14 bills, 18 elements stood out which can constitute the aggregated Magna Carta for online freelancers. These are:

1. Social security and health care benefits;

2. Creation of or assignment to a governmental office/committee;

3. Unification through municipality / provincial / regional / national federation or association;

4. Support services;

5. Prohibitions;

6. Labor standards and enforcement of labor laws;

7. Security of workplace;

8. Allocation from National Budget and other initiatives;

9. Annual Dues To Be Accrued for the Development of Sector;

10. Requirement of registration for income tax;

11. Development of a registration system separate from that of BIR;

12. Requirement of a written contract;

13 Civil and criminal penalty for violators;

14. Requisites of employment agreement;

15. Graduation to formal status;

16. Tax Exemption;

17. Night shift differential and hazard pay; and

18. Work for minor age.

These all aim to broaden and improve the treatment, welfare, protection, and security of tenure of freelancers. Through these elements, it can also be seen how bad the current situation is for freelancers, which is exactly why there are at least 14 bills waiting to be passed into law.

Following the need to enforce the 18 elements, the research discusses implications to related bodies such as the online freelancers, the government, businesses and the academe. For the government, there is a need to provide regulatory rules to promote the working conditions of the laborers. There is also a need to provide financial support and a development of proper agencies and bodies to overlook the growth of this industry. For the businesses, particularly those using the freelancing workforce, there is a need to structure new internal policies and support services as well. The academe must also facilitate and support the growth of this industry through trainings and campaigns.

VI. Recommendations

The researchers, upon analyzing the current measures and provisions, have come up with a series of recommendations that they deem necessary but lacking among the bills identified.

The purpose of these recommendations is to broaden and improve the treatment, welfare, protection, and security of tenure of freelancers.

These include suggestions, ideas, and insights for future researchers, congressmen, government offices, companies and businesses to utilize in further discussions regarding this study.

Except for the analyses of the elements and discussions in section V of this research, the researchers provide the following recommendations:

7.1 For Businesses

For businesses or companies working with or dealing with freelancers, limit the additional costs placed upon the shoulders of online freelancers.

Since most companies that procure the aid of online freelancers give no benefits such as holiday pay, overtime pay, or 13th month pay, health benefits or even Christmas bonuses, companies or businesses should make it their discretion to shoulder the cut of payment that are due to 3rd party sites like PayPal or GoLance that provide for the transfer of salary to the company to the freelancer or another option is to settle with a 3rd party site that does not give additional costs to freelancers in receiving or withdrawing their salaries.

Hiring freelancers does also reduce capital expenditures of businesses since most freelancers do work on their own equipment, homes, and network infrastructure. This can be translated by business owners to tangible or intangible benefits that will increase their retention of talent.

Another recommendation is for companies to continually research and maintain sound policy for freelancers. Digital transformation is a fast-evolving environment, and businesses should keep up with the evolving needs of freelancers.

Now that work for these companies have been compartmentalized and external disturbances minimized, companies can now focus more on generating economy and revenue. To give freelancer’s sound policy regarding their security, welfare and protection will ensure the development of employer-employee relationships and will foster growth for both parties.

Legal contracts and securing of insurance are ways in protecting the security and welfare of freelancers. Trained freelancer’s will continue to stay if they feel secured and important thus securing companies in their economic growth.

7.2 For Government

For government offices, Section 18 of Article II of the 1987 Constitution states that, “The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.”.

Section 3 of Article XIII further provides that, “The State shall afford full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law as part of their right to participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.”

The world of freelancing is novel for many, but although it’s an entirely new world for some, we are not without light into this arena since we have the Fundamental Law as our guiding light.

The constitutional provisions found in the Declaration of Principles and State Policies hold merit for the researcher’s study. The researchers strongly recommend to take freelancer’s rights with utmost importance and prioritize the bills regarding the protection, welfare and security of tenure of those in the Informal Economy Sectors.

The researchers have discussed in Section V the recommendation of a dedicated government office or agency to cater for the needs or concerns of online freelancers.

The researchers further point out that the Informal Sector, where freelancers belong here in the Philippines, needs to step up in terms of national recognition and organization. Likewise needed is the government’s support to build a sturdy platform for online work.

We still live in a culture wherein it is perceived that the only serious work or learnings can only happen in an office but that has all changed during this pandemic – and it may be here to stay for good. Younger generations have shown that there are indeed opportunities outside the four corners of an office.

They have shown that the economy can be fixed. By the help of freelancers and their procured work from in or outside the country, companies can be a means of increasing the country’s revenue if, and only if, online freelancers are given the same treatment as how a “regular” employee is treated.

7.3 For Online Freelancers

For online freelancers, your welfare, protection and security are of utmost priority for this research. Since our lawmakers have begun their journey in passing legislation for your security and protection, the researchers recommend that you take precautionary measures when entering, or already venturing, the world of online freelancing.

In work found here in the country, it is the Human Resource Department that usually takes care of the deductions in the salary of employee’s to be given to the aforementioned government offices for certain benefits like pension, healthcare and loan privileges.

Since the set-up of freelancers isn’t like that of a regular office, freelancers should secure their Social Security System (SSS) accounts, Philhealth and PAG-IBIG and start to build those investments for themselves.

7.4 For Future Researchers

For the future researchers, this research may lead them to further investigation and extensive study.

This paper used the Internet-Based Research Methodology due to the pandemic, and although substantial on its own, the study could benefit in adding more primary and secondary means of research instruments in contributing to this paper.

The researchers thus recommend that future researchers venture out in having in-depth interviews with online freelancers to further reinforce the study for the rights of online freelancers and to have a first-person point of view of the people that will be affected by the bills.

VIII. Bibliography

VIII. Acknowledgements

The researchers would like to extend their heartfelt gratitude to the following people. The completion of this study would not have been possible without their guidance and expertise.

We would like to express our sincere gratitude to our adviser, Atty. Jocelle Sigue-Batapa for the continuous support. Her guidance helped us in the duration of our research study. Thank you for the patience, motivation and positive reinforcement which encouraged us to obtain the completion of this research study. In addition, we extend our thanks for always accommodating our questions, clarifications and for explaining helpful tips regarding research writing.

Our warmest gratitude to our family members for their understanding, love and support. Thank you for providing our financial needs and for being there for us one hundred percent of the way. Their considerations allowed us to stay focused in fulfilling this study. We dedicate all our efforts in accomplishing this research paper to you.

To all online freelancers, gig workers, and members of the informal economy sector, this paper is dedicated to you. For being innovative and resilient in these changing times, for making ways in providing for your families and being the pillar that supports their homes, for going out of your way just to make ends meet, as fellow Filipinos, we salute and thank you for being the brave people that you are. Once again, from the bottom of our hearts, thank you!

Last, but certainly not the least, We would like to offer this study up to God. In these trying times, no fire provides more warmth than the love of God. Thank you for giving us the perseverance in finishing our paper and for guiding the way for us. Achievement of this paper would have never been reached if You were not by our side Lord.

IX. Glossary of Terms

Gig Economy – a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. (Oxford Languages)

Informal Sector – The informal economy consists of independent, self-employed small-scale producers and distributors of goods and services. (International Labor Organization)

Online Freelancers – someone who carries out tasks for other people who have without time, skills, or inclination to carry out the tasks themselves.This is usually done by those who have spare time, have access to a computer device and internet connection.

As a general rule, the preceding three terms (Gig Economy, Informal Economy, and Online Freelancing) are synonymous in usage and nature with many overlapping areas. However, the researchers prefer to use ‘online freelancers’ and subject such terms to this research.

The researchers are also inclined to use ‘Online Freelancers’ due to its specific connotation. Based on the subject bills of this study and general usage by the market, the first two have a broader meaning. ‘Gig economy’ encapsulates the concept of usually modern task doers which are both online and offline. ‘Gig workers’ typically involve working in fashion, music, arts and tech which may not be necessarily online. ‘Informal sector’ has a more formal usage which would usually include livelihood workers, the marginalized sector, and those subject to income-generating programs for the poor. Certainly, both of these terms include online workers.

Law Student Researchers

Alyssa Alyanna Gangoso

Joseph Ian Motus

Bryan Villarosa

One thought on “Filipino Freelancers’ Welfare: Assessing, Consolidating, and Proposing Legal Measures”

Alex Bernabe Adion says:

August 25, 2021 at 3:01 pm

So proud and happy for you Bryan V. 🙂

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Filipino Freelancers’ Welfare: Assessing, Consolidating, and Proposing Legal Measures

I. Intro

II. Objectives