Malacanang on Tuesday announced that President Rodrigo Duterte signed a law that requires restaurants, hotels and similar establishments to distribute service charges in full to their employees.
The President signed Republic Act 11360 7 August which directs all service charges to be “distributed completely and equally among the covered workers except managerial employees.”
Managerial employees refer to those who can “hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or to effectively recommend such managerial actions.”
The measure also said that service charges will not be considered in determining an employer’s compliance to law or orders that raise the minimum wage and mandates the establishment of a “grievance mechanism” to resolve any dispute between employees and the management on the distribution of the service charge.
The law also amended the Labor Code of the Philippines in which, under the previous setup, 15 percent of the service charge went to the management while the rest was for employees.