The House Committee on Labor and Employment recently approved the proposed House Bill 2821 or the Freelance Workers' Protection measure that seeks legal and contractual protection for freelance workers and provide them ease of doing business.

The bill aims to advance the rights and welfare of freelance workers, ensure humane working conditions and proper living wages, and protect their interests in instances where their employers refuse to pay them for the services they rendered.

The Lower House unanimously passed the measure, principally authored by Albay 2nd District Representative Joey Salceda, in 2021 during the 18th Congress but it failed to hurdle the enactment process.

Salceda said the existing Labor Code has no definition for freelancing and provides no formal contractual framework for it, even as Filipino freelance workers already numbered over 1.5 million prior to the Covid-19 pandemic.

The bill defines a freelance worker as any person "hired or retained to provide services in exchange for compensation, or as an independent contractor to do work according to one's own methods and without being subjected to the control of the hiring party," which may be a corporation registered with the Securities and Exchange Commission, or a sole proprietorship under the Department of Trade and Industry.

"If this measure is enacted, freelancers will have contractual protections and tax amnesty for their own sector, and will be required to register with the Bureau of Internal Revenue," Salceda said in a statement on Tuesday.

Under the measure, any hiring party availing of the services of a freelance worker shall execute a written contract with the worker before services are rendered.

Both parties shall each retain a signed copy of the contract, written in plain language and understood by both parties.

The contract will itemize the services to be rendered, details of compensation and related benefits, employment period, grounds for breach of contract, tax identification numbers and other conditions the Department of Labor and Employment may prescribe.

When enacted into law, freelancers who are required to be physically present in the workplace or those on field assignments, shall be paid a night shift differential of not less than 10 percent of the regular compensation for each hour of work performed between 10 p.m. and 6 a.m., unless there is a more favorable fee stipulated in the contract.

Freelance workers deployed in dangerous conflict areas, distressed or isolated locations, areas under state of calamities or emergencies, contagions, radiations and the like will be granted hazard pay equivalent to not less than 25 percent of the total payment stated in the contract.

The bill also provides a civil penalty of P50,000 to P500,000 for unlawful practices, which include paying compensation due the freelance worker not later than 15 days after the stipulated payment date.

The measure likewise seeks to make it unlawful for hiring entities to engage in illegal practices that are violative of the measure's provisions, like filing a complaint against freelancers who assist and provide DoLE with information related to mediation or conciliation agreement and in investigation of cases related to freelancing.

Those who violate the foregoing may be fined between P50,000 and P500,000.

"In our age of millennialism, inter-connectivity, instantaneous global communication and creative entrepreneurship with internet-based work, we can only expect a growing pool of workers who need not report to office but rather work from home or in a creative stationary set up," Salceda said.

He pointed out that "freelancing has already become the lifeline for millions of Filipinos, especially those who lost their regular jobs during the pandemic. As the economy becomes more digital, there will be more freelancing, without legal protections for which, we will also see more labor exploitation."