DOLE warns firms to only work with legit contractors

CEBU, Philippines — The Department of Labor and Employment has warned companies in Central Visayas to only engage with registered contractors and subcontractors.

Only service providers that are registered with DOLE can engage in contracting or subcontracting business.

DOLE regional director Salome Siaton noted the mandatory registration of contractors.

As of April 30, DOLE posted 243 registered contractors in Region 7.

Their registration, DOLE said, presupposes they possess substantial paid-up capitalization of at least P5 million for corporations or partnerships and P5 million net worth for sole proprietorship to ensure they have enough funds for employees’ wages and other related benefits required by law.

Labor-only contracting, which is prohibited by law, happens when the contractor or subcontractor merely recruits, supplies or places workers to perform a job for a company.

The prohibited activity happens when a contractor or subcontractor does not have substantial capital; and it does not have investments in the form of tools, equipment, machinery, supervision and work premises.

It also happens when the employees recruited by the contractor are doing the work related to company’s main business; and when the contractor does not control over the work of the employees.

Siaton said companies should only engage with legitimate contractors as they are “solidary liable” based on labor law.

Contracting or subcontracting is when a company agrees to sourcing or farming out to a contractor the performance or completion of a specific job or work within a definite or predetermined period, regardless of whether such job or work is to be performed or completed within or outside the premises of the company.