Kasambahay Bill A Case Study

Illustration by Steph Bravo

  1. When did the Batas Kasambahay or Republic Act No. 10361, and its implementing rules and regulations (IRR) come into effect?

RA 10361 or “Batas Kasambahay” was published on April 15 in the Official Gazette. By explicit provision of the Act, it came into full force and effect 15 days after its complete publication in the Official Gazette.

Its implementing rules and regulations (IRR) were promulgated on May 9. The IRR was published in The Manila Times and The Philippine Star on May 19; hence, by its express provision, the IRR took effect on June 3.

  1. What is the significance of the law?

RA 10361 is highly significant because it underscores the need to afford special protection to domestic workers or kasambahay, the sector of workers, which in turn, affords household employers who are workers themselves the opportunity to focus on work elsewhere for their livelihood.

Thus, the law translates into very concrete terms the constitutional mandate to afford “full protection” to labor wherever situated, regardless of status and nature of position.  The need for full protection is more pronounced when the concerned worker renders services in the household wherein practically no monitoring by concerned government agencies can be done because the work of the kasambahay is hidden from view.

Moreover, RA 10361 serves as our country’s compliance with the commitment it made on Sept. 5, 2012 to implement all the obligations provided in the International Labor Organization’s Convention No. 189 (2011), concerning decent work for domestic labor.

  1. Is RA 10361 a mere consolidation of the provisions in other laws for the protection of domestic workers? Or does the new law provide more protection for a kasambahay?

While considering the pertinent provisions in the Civil Code and the Labor Code, RA 10361 grants additional significant rights and benefits to the kasambahay. These are the 13th month pay, Pag-Ibig membership and additional pay for work beyond the agreed hours of work, not to mention the provisions which categorically declare as unlawful a number of prohibited acts.

  1. Has the government widely disseminated the law and its IRR to the public?

Reports have it that the draft IRR of the Batas Kasambahay was posted online to help raise awareness and solicit inputs faster. Moreover, the labor secretary directed regional offices of the Department of

Labor and Employment (DOLE) to conduct “town-hall” type consultations in Luzon, the Visayas and Mindanao during the 90-day period within which DOLE was to come up with the IRR.

Whether or not such public consultations suffice to widely disseminate the law and its IRR remains to be seen. This can be manifested in a situation where an overwhelming majority of employers will comply not only with the registration/reportorial requirements but also with the grant of benefits to the kasambahay pursuant to RA  10361.

  1. What are the obligations of the employer to a kasambahay under the law?

Under RA 10361, the household employer has the following obligations:

To treat the kasambahay with dignity, not subject him/her to any kind of abuse or inflict any form of physical violence or harassment;

To provide the basic necessities of the kasambahay—at least three adequate meals a day and humane sleeping arrangements that ensure safety;

To provide appropriate rest and assistance in case of illness and injuries sustained during the service without loss of benefits.

. To respect the privacy of the kasambahay—extends to all forms of communication and personal effects;

To grant the kasambahay access to outside communication during free time, or even during work time in case of an emergency;

To afford the kasambahay the opportunity to finish basic education and to allow access to higher education or training;

To register all the kasambahay in the Registry of Domestic Workers in the barangay where the employer resides;

To comply with the terms and conditions of employment, such as:

  • Health and safety
  • Daily rest period
  • Weekly rest period
  • Minimum wage (P2,500 in Metro Manila; P2,000 in chartered cities and 1st class towns; and P1,500 in other towns)
  • 13th month pay
  • Leave benefits
  • Social and other benefits
  1. Does the law provide for the centralized registration of kasambahay nationwide?

While RA 10361 does not explicitly provide for such centralized registration of domestic workers, Rule IV, Sec. 9 of the IRR mandates the SSS, Pag-Ibig and PhilHealth to develop a unified system of registration and enrollment within six months from the IRR promulgation.

Moreover, Rule IX, Sec. 2 of the IRR requires the punong barangay, together with SSS, Pag-Ibig and PhilHealth representatives to conduct a common registration of all kasambahay nationwide.

  1. Are employers themselves required to register a kasambahay in the barangay office?

Yes, Sec. 17 of RA 10361 makes it the duty of employers to register all kasambahay under their employment in the Registry of Domestic Workers in the barangay where the employer resides.

  1. Are employers required to enroll a kasambahay with the SSS, PhilHealth and Pag-Ibig?

Yes.  Sec. 30 of RA 10361 provides that the kasambahay who has rendered at least one month of service shall be covered by the SSS, PhilHealth and Pag-Ibig and shall be entitled to all the benefits in accordance with law. This means that the employer has to register both himself and the kasambahay in these three agencies.

  1. How long does it take to register a kasambahay with these agencies (based on your experience and anecdotal evidence)?

Currently, registration with the punong barangay will not take five minutes as it merely involves writing down the employer’s  and the kasambahay’s names and address(es) in the barangay record book without any prescribed form.

Employer registration with Pag-Ibig is systematic and does not take long. The kasambahay can even register online.

SSS registration can, however, entail almost one whole day.  In my case, I left the house at 8:30 a.m. Upon arriving at the SSS main office on East Avenue in Quezon City, I was almost discouraged to go through the long queues, not to mention that while the guidelines specified two copies for certain forms, the SSS staff required me to accomplish a third copy of the same.  I was done by 2 p.m. Note that I got the forms and accomplished the same a day earlier.

Also, note that registration with the SSS, PhilHealth and Pag-Ibig can be facilitated by downloading the forms online and accomplishing the same before going for the queue.

10.When should an employer register a kasambahay with the three agencies? Is there a deadline?

As a rule, the kasambahay should be registered with the SSS, PhilHealth and Pag-Ibig after one month of service.

There is no deadline for registration. In fact, the IRR clarifies in Rule IX, Sec. 3 that the kasambahay desk in the barangay hall should accommodate continuous registration by the employers.

11.Has the government put up a one-stop shop for the registration of kasambahay with the SSS, PhilHealth and Pag-Ibig?

As they say, “wish ko lang.”  The IRR itself allows the SSS, Pag-Ibig and PhilHealth a period of six months from the IRR promulgation to develop a unified system of registration and enrollment.

12.What are the preemployment requirements?

Even before the execution of the employment contract, the employer may require the kasambahay to submit, the following:

  • Medical certificate or a health certificate issued by a local government health officer
  • Barangay and police clearance
  • NBI clearance
  • Duly authenticated birth certificate or any other document showing the kasambahay’s age, such as voter’s ID card, baptismal record or passport (Art. III, Sec. 12)

13.Who will shoulder the cost of these preemployment requirements?

The law explicitly states that the costs of the foregoing preemployment documents shall be borne by the prospective employer or agency which facilitated the kasambahay’s employment.

14.For kasambahay employed for at least one year, are employers required to pay the premiums for or contributions to the SSS, PhilHealth and Pag-Ibig retroactively?

As regards the SSS and PhilHealth, the pertinent laws required registration as early as 1993 and 1995, respectively.  Unless Congress will act to amend such existing laws, retroactive application of RA 10361 cannot be avoided.

As regards Pag-Ibig registration, the requirement was introduced in RA 10361.  Thus, there should be no dispute that it should be applied only prospectively.

15.What are the penalties for employers for not complying with the

new law?

The new law provides that any violation of its provisions which are declared unlawful  shall be penalized with a fine of not less than P10,000 but not more than P40,000.

The same is without prejudice to the filing of an appropriate civil or criminal action by the aggrieved party.  For instance, an abused kasambahay who sustained physical injuries may file a complaint for serious or less serious physical injuries before the appropriate prosecutor’s office/court.

Since the new law also requires registration with the SSS, PhilHealth and Pag-Ibig, the existing laws in this regard must be applied. For instance, under the Revised Social Security Law (RA 8282 of 1997), failure or refusal to comply with the provisions of the law shall be punished by a fine of not less than P5,000 and not more than P20,000 or imprisonment of not less than 6 years and 1 day, and not more than 12 years, or both, at the discretion of the court.

16.What are the strengths and weakness of the kasambahay law in

terms of its enforceability?

Strengths In time, especially so when the unified registration system and the barangay kasambahay master list are completed within six months from the IRR issuance, the government should be able to fully comply with its duty to protect the rights and promote the welfare of this very disadvantaged sector of household workers.  For instance, a standard operating procedure for rescue and rehabilitation in cooperation with the Department of Social Welfare and Development (DSWD), Department of the Interior and Local Government (DILG), DOLE will be developed for the abused kasambahay.

The visitorial and enforcement powers of the labor secretary are in place.

Enforcement involves all pillars of justice—citizenry, local government unit, police, prosecution/judiciary, jail system and concerned departments and other agencies of the government.

Weaknesses

At present the processes that the employer must undergo to register are so tedious.  Unless the employer has online access and is IT savvy, he would have to spend a lot of precious time queuing just to secure the prescribed forms.

Considering also the fact that most kasambahay belong to the poorest of the poor and hence, unable to finish even elementary education,  they are in no position to determine whether or not there is strict employer compliance with the legal requirements.

The added financial burden on the employer which amounts to a total minimum of P689 (SSS, PhilHealth and Pag-Ibig), if the kasambahay’s pay is less than P5,000, not to mention the problem of retroactivity in SSS premium payments and its huge financial implications on household employers who are ordinary wage earners themselves, may encourage them to circumvent the law.

They may resort to the exceptions provided for in the law.  For instance, children under foster family arrangement may be initially enrolled, only to be forced to drop out of school after sometime.

The huge number of employers and kasambahay in our country will entail not only huge costs for the government but also difficulty in monitoring employer compliance.

17.Should the law be amended?

Yes. Congress must, however, look for guidance from whatever experiences may be drawn from the implementation of the law within the next year.

In time, with the inputs of all the stakeholders—kasambahay and household employers, concerned agencies of the government (DOLE, DILG [in particular, the punong barangay], DSWD, Philippine National Police, SSS, PhilHealth, Pag-Ibig plus the Department of Justice and the judiciary)—gaps in the law may be addressed. For instance, while Sec. 11 regarding employment contract specifies, as one of the minimum terms and conditions of employment—“hours of work and proportionate additional payment”—there is nothing in RA 10361 which specifies the normal hours of work of the kasambahay upon which to reckon such “proportionate additional payment.”

In simple words, household employers are now so obliged to pay overtime compensation with no clear basis.

In this regard, one may suggest the application of the pertinent provision of the Civil Code which, under Sec. 44, remains in force and effect if not inconsistent with the provisions of RA No. 10361.  In Art. 1695 of the Civil Code “househelpers shall not be required to work more than 10 hours a day. x x x.”

The implication, therefore, is that 10 hours is the normal hours of work per day.  Service beyond 10 hours should be considered overtime which warrants the payment of additional compensation.

Still, however, if one follows to its logical conclusion the provision which grants “an aggregate daily rest period of 8 hours per day” (Sec. 20), he may argue that the balance of 16 hours per day is the kasambahay’s working time. But surely, it is not the intention of the law to make life so hard and burdensome to the kasambahay.

Too long a time spent for work is not only counterproductive.  With not enough reasonable compensation, it subjects the kasambahay to discrimination, exploitation and abuse. Such cannot be countenanced in this jurisdiction which proscribes any form of discrimination, exploitation and abuse.

The kasambahay is guaranteed his/her human dignity and entitled to full respect of his/her human rights under the Constitution.

Finally, the most controversial issue that bugs a huge number of household employers is the retroactive application of SSS registration. RA 7655 (Aug. 19, 1993) requires the mandatory SSS coverage of “househelpers (who are) receiving at least P1,000.”

Accordingly, the SSS requires the payment of contributions/premiums from the start of the kasambahay employment, not from the time the new law came into full force and effect.

With the substantial amount of contributions that will have to be paid when complying with registration requirements, most employers belonging to the low-income group would rather leave their employment and send home their kasambahay.

They simply do not have the funds to comply with retroactive premium payments. It is up to Congress to address this nagging issue. Most employers intend to comply with the law as they also believe that it is high time for the kasambahay to enjoy the benefits on par with regular workers, but the $64 question is: Can the ordinary employers afford it?

(Patricia R.P. Salvador Daway, whose household employs a kasambahay, is a professor at the UP College of Law.)

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It could not only increase short-run unemployment among young and low-skilled workers, but also rob them of the opportunity to better their lives and that of their families in the long run

JC PUNONGBAYAN

It's often said that a little knowledge of economics goes a long way.

After all, economics is, at its core, a study of behavior and incentives, of how people (whether in households, firms, or government) behave when faced with different incentives.

It is no wonder then that economists have played leading roles in public policy issues (e.g., the RH and Sin Tax Laws) where there is a need to consider the different incentives faced by various individuals and groups in the crafting of society's rules.

Yet another law with public policy implications seems not to have been scrutinized as closely: the “Kasambahay Law” (RA 10361) recently signed by President Aquino.

The premise of the law is simple: for too long househelps around the country have been the subject of abuse by their employers (in the form of unjust salaries or harsh working conditions) and the protection afforded by existing laws is lacking. The enactment of the Kasambahay Law came months after the well-publicized case of Bonita Baran, a househelp whose horrid experience at the hands of her employers (resulting in her blindness, among several other injuries) prompted no less than a full-blown Senate investigation.

The Kasambahay Law aims to improve the plight of the millions of househelps across the nation by establishing sweeping measures affecting several aspects of their employment. These measures include mandated benefits, occupational standards, and a minimum wage. (See the Official Gazette for the full text of RA 10361.)

Minimum wage

The minimum wage is one of the most basic examples in Economics 101 of the effects of government policy on market outcomes. It is also usually the first instance where government policy is introduced in the elementary model of supply and demand.

In particular, it is a well-known tendency that the imposition of a minimum wage (and subsequent increases of it) results in a surplus of laborers in the market, a phenomenon otherwise known as unemployment. This stems from the twin tendencies of the minimum wage to introduce an incentive among workers to find work and a disincentive among employers to hire. That is, as more workers seek employment due to the wage floor, some employers will find the new effective wage prohibitive and therefore find themselves better-off laying off their househelps than retaining them.

To be sure, economists around the world are in disagreement over the specific impact of minimum wages on employment. (For instance, a study could find that a 10% increase in the minimum wage might result in a decrease of employment by around 3%.) Yet even by their standards, there are few issues in which economists are more agreed with than the economic impact of the minimum wage.

Indeed, the minimum wage policy provides a rare exception to the old quip, associated with George Bernard Shaw, which says that if economists were laid end to end, they would not reach a conclusion. A survey, for instance, of more than a thousand US economists in the 1990s showed that a considerable 79% believed that a minimum wage increases unemployment among young and low-skilled workers.

Note that the consensus specifically pertains to the impact of the minimum wage on young and low-skilled workers (rather than across all subgroups of the labor market). The reason is quite simple: On average young and low-skilled workers tend to do things slower and with more errors than their older, more experienced counterparts. Hence, they are likely to be the ones who bring the least economic value to the employer in the first place.

With the imposition of a minimum wage, the value that employers get for their services dwindle the most (and may even represent a cost to the employer) thereby making these workers usually the first to go. Economist Paul Samuelson put it succinctly: “What good does it do a black youth to know that an employer must pay him US$2 per hour if the fact that he must be paid that amount is what keeps him from getting a job?”

Potential impact

This brings us to the potential impact of the Kasambahay Law on the Philippine market for househelps. It is a fact that most househelps in the country are young and low-skilled. They are typically teenager migrants who came from low-income provinces, with an intention to seek entry-level employment (preferably in urban areas) so they could send money back to their families and help with the finances.

It is especially important for these breadwinners to find entry-level work, even in the short run, to establish bases and build networks as they look for better opportunities later on. But with the imposition of the Kasambahay Law, the disincentive for employers to employ these young and low-skilled workers may have adverse and far-reaching effects.

First, it is likely that middle-income employers will find the minimum wage especially binding because they are more likely to be paying less than the minimum wage in the first place (in contrast with more affluent employers). The law, for instance, implies that employers paying salaries below P5,000/month will have to shell out at least P368/month more for SSS, Philhealth, and Pagibig benefits. (Not to mention other transaction costs involved in enrolling one’s househelp to these benefits, which may include securing a birth certificate, NBI clearance, etc.)

With these added costs, the likelihood of laying off househelps is likely to be highest among middle-income employers and those in middle-income areas who vastly outnumber the rich who will have the least problem retaining their househelps.

Second, the law seeks to improve the plight of the approximately 2 million househelps throughout the country. In reality, the law will improve only the plight of a fraction of those 2 million househelps who will manage to cling on to their jobs after the imposition of this law. For some, their wages will increase to at least P2,500/month. For many others, their wages will plummet to P0/month.

In other words, the law favors some of the currently employed househelps at the expense of others who will have to be laid off and all prospective househelps who will inevitably have a harder time looking for work in the future.

Third and lastly, the disincentive to hire not only results in short-run unemployment among young and low-skilled workers but it also robs them of the crucial first step they need to build their lives in the cities and bring their families back at home out of poverty. This is especially the case in poor, agricultural areas where one major incentive to send breadwinners to urban areas is to ensure a steady flow of income via remittances. This is intended to protect themselves from the vagaries of weather which may result in uncertain agricultural outcomes.

In other words, when unusually strong typhoons destroy a huge swath of cropland in the province, the steady inflow of remittances coming from breadwinners in the cities (and who work in the non-agricultural sector) minimizes the impact of these exogenous shocks on their daily consumption. When these breadwinners lose or fail to find jobs in urban areas, this informal insurance mechanism devised by the poor also breaks down.

Unintended consequences

Unintended consequences are a favorite topic among economists because they highlight how government intervention in markets (though sometimes defensible) may lead to perverse outcomes, usually the opposite of the expected results. A famous historical example was the Prohibition in the US during the 1920s which sought to suppress alcohol trade. It instead resulted in a vibrant underground market for alcohol.

The same goes with the Kasambahay Law, a law fraught with unintended consequences and whose underlying economics are in question. Of course, only time (and the data) will tell. But by failing to see that the very decision to employ househelps is intricately linked with the wages paid to them, the Kasambahay Law threatens to increase the disincentive to hire among middle-income employers and those in middle-income areas. This could not only increase short-run unemployment among young and low-skilled workers, but also rob them of the opportunity to better their lives and that of their families in the long run.

Thus, while it was grounded on good intentions, it is unclear whether the Kasambahay Law will really improve the plight of the millions of current (and future) househelps whose jobs and lifetime earnings now hang in the balance. Indeed, the law might in fact worsen the plight of the very people it intended to help. This may yet be another instance of how good intentions often pave the road to hell. - Rappler.com

The author is a summa cum laude graduate of the University of the Philippines School of Economics. His views are entirely his own and do not in any way reflect the views of his affiliations.

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Published 8:04 AM, January 31, 2013

Updated 12:39 AM, February 01, 2013

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