House approves bill on service-charge sharing in hospitality industry

THE House of Representatives approved on third and final reading a measure increasing the share of the service charge allocated to rank-and-file employees in the hospitality industry.

With 208 affirmative votes and zero negative, the chamber approved House Bill No. 8784, which will amend Article 96 of the Labor Code of the Philippines.

If enacted, it will increase the share of the service charge enjoyed by rank-and-file and supervisory employees to 90% from the current 85% , which shall be “fully and equally distributed.”

The remaining 10% will be set aside to pay for pilferage and breakage.

The measure also requires that any increase in wages will not be affected by the grant of the service charge benefit.

“In case the minimum wage is increased by law or wage order, service charges paid to the covered employees shall not be considered in determining the employer’s compliance with the increased minimum wage,” as stated in Section 1 of the bill.

The House Bill, however, differs from Senate Bill No. 1299, which proposed to distribute the service charge collection “completely and equally.”

The Senate version also specifically excludes managerial employees among the beneficiaries covered by the bill.

It identified managerial employees as those given power to “lay down, and execute management policies and/ or hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions.”

The Senate Bill was approved on third and final reading in December 2017.

Asked for comment, Employers Confederation of the Philippines (ECoP) Acting President Sergio R. Ortiz-Luis, Jr. said the House version won’t have an “earth-shaking” impact.

“There is nothing earthshaking about the bill,” he told BusinessWorld over phone.

“I don’t think it will be even noticed. The difference is so little that I don’t think it would make much difference,” he added. —