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Rosie Dear

Arresto Menor
Hello there,

We have been operating a start up business for 2 years now.  We are in the business of renting out apartments for short and long term renters. It is really a challenge for SMEs like us to get quality people we can trust and will put work to heart.   So far, we are able to retain only 3 cleaners out of so many we have tried.  Also there are only 2 of us running the business. We have no regular office people e.g. hr, accountant, admin etc. Even if the company was registered as corporation, there are 2 people juggling all the work for now.

Due to lack of funds, lack of people and common duration of stint of most personnel (being informal), we are also not able to register our cleaners to SSS, PhilHealth and other agencies required of us. Many of those who worked for us only lasted for 1-3 months.  

One cleaner is on the brink of getting terminated. First, due to money issue. We had a renter who reported to have lost an amount of money they left under the pillow and it was this cleaner who did the cleaning.  Though nothing was absolutely proven beyond reasonable doubt. Second is an instance where in this cleaner claimed to have remitted a cash payment but there was no proof she did.  After several occasions of having the same money problem with her plus her consistently poor performance and lack of concern for the business, we know she feels we will soon get rid of her.   But then came a message from her husband saying ridiculous things like we are mistreating employees and not paying them bonuses and 13 month pay? First we pay our cleaners roughly 12 to 14k a month for housekeeping work and petty tasks such us depositing money to the bank or paying utility bills. Sort of "kasambahay." We provide housing for free and cover their meals. We never missed to pay their salary on time.  They can also get cash advance any time they want. We never declined their cash advance request when they ask, even if we are short ourselves just so they can feel they can count on us.  We even buy them mobile phones when they request then they pay in stagger every salary cut off.  We never used harsh words, never even shouted at anyone.  We want to keep them happy so mistreatment is out of the argument.  This person is making up something to put us in bad light. Though we admit we do not have them registered as official employees.  Like I said, there are only 2 of us in this business and lack the personnel to process all these things.  We have told the cleaners that the soonest we are able to hire somebody to do the HR work, we can begin the registration with the necessary govt agencies.  They are ok with it. We are sort of operating informally in certain areas. No contract, No SSS, No Philhealth, No Pagibig yet.  Our cleaners are also not being deducted of taxes. Though I doubt if we are the only one in the Philippines operating this way. There are a lot of small businesses without proper employee registration simply because it is not feasible to do so.

We would like to know if there are grounds to this possible complaint to DOLE. I believe it is malicious.  Threatening us his way to extort money.  What could be a possible liability of our company, if there is? We hope you can help us.  We want to find somehow a law that protects companies like us from exploitation from this type of people. Or are we completely liable for not having them registered in the first place? And the 13th month must be given even if they are not officially employees on paper?

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Reclusion Perpetua

You are still liable because you are not reporting them to sss/phic/pagibig or paying them 13th month pay. even if you are generous to some extent, the law would only be looking at the compliance that they set out.

When you state "there are a lot of small businesses without proper employee registration simply because it is not feasible to do so", though it may be a common practice, but it is not legal. you might be saving a few pennies for today but you will pay for truckloads of cash in the future Very Happy There are accounting companies out there that will help you for a minimal amount.

Hope this helps

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