Service charges must be distributed twice monthly: DOLE

MANILA Hotels, restaurants and other establishments covered by the new law requiring the collection of service charges for work and services they offer are ordered to distribute the shares twice a month, the Department of Labor and Employment (DOLE) said Thursday.

Under Department Order No. 206, or the Implementing Rules and Regulations (IRR) of Republic Act No. 11360 known as the Service Charge Law, Section 4 of the law, states the shares referee to herein shall be distributed and laid to the covered employees not less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.

The IRR, signed on November 19, added that all service charges collected shall be distributed completed and equally, based on actual hours or days of work or service rendered, among the covered employees, including those already receiving the benefit of sharing in the service charges.

It said service charge refers to the amount that is added to the bill for work or service rendered.

Employees who are entitled to have the share from the collected service charges are under the direct employ of the covered establishment, regardless of their positions, designations or employment status, and irrespective of the method by which their wages are paid.

Not covered by it are managerial employees or 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.

The IRR also identified the other establishments as entities that collect service charge for work or service rendered, such as but not limited to, lodging houses, night clubs, cocktail lounges, massage clinics, bars, casinos and gambling houses and sports clubs.

The rule shall take effect 15 days after its publication in at least one newspaper with general circulation. (PNA)

Source: Philippines News Agency