IRR on workers’ service charge distribution out

MANILA, Philippines — Twice a month, workers in hotels and other similar establishments will be receiving additional pay coming from the collection of service charges.         

The new policy is provided under the newly issued implementing rules and regulations (IRR) for the new law providing that service charges collected by hotels and similar establishments shall be distributed in full to all covered employees.

President Du-terte signed in August Republic Act 11360 or the Service Charge Law mandating hotels, restaurants and similar establishments to distribute all service charges collected at the rate of 85 percent for all covered employees and 15 percent for management.

Labor Secretary Silvestre Bello III said the IRR of the law shall take effect 15 days after its publication in a national newspaper. The IRR was signed last Tuesday.         

Under the IRR, Bello said the distribution of service charges should be based on actual hours or days of work rendered by employees, including those already receiving benefit of sharing service charges.         

“The shares shall be paid to covered employees not less than once every two weeks or twice a month, an interval not exceeding 16 days,” Bello said.        

According to the Department of Labor and Employment (DOLE), the share from service charges shall not be considered as compliance with the increase in pay in the event a wage hike is granted for minimum wage earners.         

It added that the financial benefit shall apply to workers of all establishments collecting service charges such as hotel, restaurants, lodging houses, casinos and sports clubs.         

“All employees, except managerial positions, regardless of their employment status and irrespective of the methods by which they are paid,” are included in the distribution, Bello said.

Any dispute on the distribution of service charges, Bello said, shall be settled through grievance machinery as provided under the collective bargaining agreement.

DOLE regional offices will have jurisdiction over disputes for unorganized establishments.

The country’s largest labor group, meanwhile, sees an increase in take-home pay of workers with the implementation of the new law requiring establishments to distribute service charges they collected to employees.

“The law will definitely improve the take-home pay of workers during these times when they badly needed cash to daily cope with the rising cost of living,” Trade Union Congress of the Philippines (TUCP) president Raymond Mendoza said in reaction to the enactment of Republic Act 11360.

“This measure will also boost employees’ morale to be loyal and improve productivity to the company. This will also improve the quality service employees render to customers,” Mendoza added.          

The new law also provides that such benefit will not diminish existing benefits under present laws, company policies and collective bargaining agreements.        

The TUCP expressed hope that all business owners and employers will fully comply with the new law for the benefit of their employees and for improving the reputation of their business.