Hire and pay in the Philippines: a guide for international success
Hiring internationally can open your company up to a wide pool of workers who have the skill sets you need to take your business growth to the next level.
When preparing to hire and pay workers in the Philippines, your company needs to decide on the most efficient and cost-effective way to establish your workforce. This includes deciding if you want to take a do-it-yourself (DIY) approach and navigate complex employment laws and regulations on your own, or if you want to leverage external resources and outsource certain aspects of HR management to an expert.
Let’s take a closer look at some of options available to you when preparing to hire and pay workers in the Philippines.
DIY hire and pay nonprofit workers in the Philippines
If you take the DIY approach to hiring and paying workers in the Philippines, it’s important to understand that the onus of complying with employment laws and regulations there will be on your company. In other words, you must be aware of, meet the deadlines for, and adhere to all the country’s laws if you hope to operate legally in that country.
The truth is that this course of action has the most potential for errors, which can lead to expensive fines and penalties. In order to properly hire and pay your Philippine workforce, you’ll need to focus on two important areas: how to establish your legal entity, and worker classification.
Establish an entity
If you are planning to take the DIY approach to hiring and paying full- or part-time employees or independent contractors in the Philippines, you’ll first need to establish a legal entity.
Setting up a legal entity can be a time-consuming and costly endeavor, which can take anywhere from six to nine months to complete. As the foundation of an operation in a country, legal entities can impact every aspect of a business, including finance, accounting, IT, and other supply chain functions. This process involves opening the proper bank accounts, establishing important tax information, and more.
If all of this seems too complex and prone to error, consider outsourcing to an employer of record (EOR) provider, as they can help ensure that your business structure is cost-effective, efficient, and compliant.
You’ll also need to decide whether your company will be hiring permanent employees or independent contractors.
If you decide to hire independent contractors, they’ll need to meet the following criteria:
- A contractor is allowed to work for multiple companies at the same time. They cannot be restricted to only working for your business.
- A contractor is responsible for managing and controlling their working status and schedule. The business can’t give them specific hours of operation.
- A contractor determines the mode in which the work is carried out. If the company gives too much direction, it could put the business at risk of being classified as an employee.
- A contractor is usually project-based or is required to work for shorter periods of time. If they extend their time with a company, it could put the business at risk of being classified as an employee.
For hiring permanent employees, the criteria are as follows:
- An employee typically works with your company longer than a contractor, has a vested interest in your company and has a longer continuity of experience.
- An employee’s status with your company significantly protects your organization from the misclassification risks that independent contractors can expose you to.
- An employee’s work belongs to your company, giving you more control over your intellectual property and copyright protection.
Properly classifying your workers is important with respect to both employment laws, as well as the employees’ rights and responsibilities within an employment contract.
Outsource to an employer of record provider
If you want to hire and pay in the Philippines without the burden of the DIY approach, consider outsourcing to a HR partner with global expertise.
At Safeguard Global, we have several options to help you easily pay workers in over 170 countries across the world, including the Philippines.
Our Payroll Express solution can help you manage payroll for your workers, including the following streamlined services:
- Payroll setup, billing and in-country project management
- Simplified workflows and a single, centralized vendor
- Pay slips in local languages
- Full compliance with statutory payroll processing management, reporting sourcing, and filing
- Proactive monitoring of any legislative changes
Our Payroll 360 solution allows you to track your international payroll in one place – in a centralized dashboard —giving you valuable payroll analytics with which to better understand your global workforce costs. A few benefits of this include:
- Decrease costs by centralizing under a single payroll provider
- Standardize payroll data to perform workforce spend analytics
- Eliminate compliance violations
- Give all employees access to pay slips, benefits, tax deductions, PTO accruals and sick time
For more hands-on assistance with global HR management, our GEO solution is an EOR service that can hire and pay international workers for you, without needing to set up your own entity. Many businesses choose this route because the EOR provider helps reduce risk and liabilities abroad, while simultaneously enabling your company to manage all day-to-day responsibilities for your international workforce.
GEO manages the administrative burdens related to HR, payroll, benefits administration and more, which in turn allows your company to focus on other important growth initiatives. Because EORs use their existing legal entity network for hiring and taxes, your company can hire much faster without sacrificing compliance.
Here are a few of the administrative services an EOR provides:
- Fast international hiring
- Global payroll
- In-country compliance
- Reduced risks with international contractors
- Global talent acquisition
- HR technology for international workforces
- Compliant employment contracts
If international expansion and hiring is one of your company's goals in 2023, Safeguard Global can be your ticket to success. Our qualified teams of in-country experts can help you compliantly pay your new workers and remain within employment regulations in more than 170+ countries around the world. When it comes to international hiring, we are here to support you throughout the entire business lifecycle.
Contact us today
to speak with a global solutions advisor and learn how Safeguard Global can compliantly meet your international employment needs.