On 1 February 2024, the Department of Labor and Employment ("DOLE") issued Department Order No. 242, series of 2024 ("Order") which provides for the revised implementing rules and regulations of Article 96 of the Labor Code of the Philippines as amended by Republic Act No. 11360, entitled "An Act Providing that Service Charges Collected by Hotels, Restaurants and Other Similar Establishments be Distributed in Full to All Covered Employees" ("RA 11360").
The Order covers all employees except managerial employees "regardless of their position, designations, or employment status, and irrespective of the method by which their wages are paid". Managerial employees are defined by the Order as "any person vested with powers or prerogatives to lay down and execute management policies or hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees or to effectively recommend such managerial actions." What this means is that covered employees (except managerial employees) are now entitled to receive the full amount of the service charges contemplated in RA 11360.
The Order also provides for the non-diminution of benefits. This means that the new rules on will not diminish the existing benefits of covered employees under present laws, company policies, and collective bargaining agreements.
