DOLE bares Service Charge Law provisions

The Department of Labor and Employment (DOLE) has released the revised implementing rules and regulations (IRR) of Republic Act No 11360, or the Service Charge Law.

According to DOLE, the said revision is coherent with the legislative intent of full and equal payment of service charges to all covered employees of service chargecollecting establishments.

The revised IRR, under Department Order (DO) No. 242, series of 2024, expanded the coverage of service charge distribution by removing the direct employment clause from the previous IRR.

The DO No. 242 supersedes DO No. 206 series of 2019, which contained the previous IRR. It shall take effect 15 days after publication in at least two newspapers of general circulation.

“The new IRR also specifies the non-diminution of benefits, which means the new rules on service charge distribution shall not diminish the existing benefits of the covered employees,” said DOLE in a statement.

Further, the new IRR states that covered employees refer to all employees, except managerial employees as defined herein, regardless of their position, designation, or employment status, and irrespective of the method by which their wages are paid.

A provision on dispute resolution concerning service charge distribution among covered employees was also updated by expanding the dispute referral system to the regional, provincial, field, or satellite office level having jurisdiction over the workplace.

Conciliation through the Single-Entry Approach (SENA) is likewise stated in the new IRR.

Monitoring of compliance was also added under

Section 8, which orders DOLE regional, provincial, field, and satellite offices to monitor private establishments’ compliance per Department Order No. 239, series of 2023, or the Rules of Administration and Enforcement of Labor Standards Pursuant to Article 128 of the Labor Code.

The new IRR retained the provisions on covered establishments that include those that collect service charges for work or services, the frequency of distribution, i.e., twice a month with no less than 16 days of interval, and the non-determination of service charge payment in the establishments’ compliance to payment of minimum wages. -