Chapter II

REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES

Art. 25. Private sector participation in the recruitment and placement of workers. Pursuant to
national development objectives and in order to harness and maximize the use of private sector
resources and initiative in the development and implementation of a comprehensive
employment program, the private employment sector shall participate in the recruitment and
placement of workers, locally and overseas, under such guidelines, rules and regulations as
may be issued by the Secretary of Labor.
Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales agencies of airline
companies are prohibited from engaging in the business of recruitment and placement of
workers for overseas employment whether for profit or not.
Art. 27. Citizenship requirement. Only Filipino citizens or corporations, partnerships or entities at
least seventy-five percent (75%) of the authorized and voting capital stock of which is owned
and controlled by Filipino citizens shall be permitted to participate in the recruitment and
placement of workers, locally or overseas.
Art. 28. Capitalization. All applicants for authority to hire or renewal of license to recruit are
required to have such substantial capitalization as determined by the Secretary of Labor.
Art. 29. Non-transferability of license or authority. No license or authority shall be used directly
or indirectly by any person other than the one in whose favor it was issued or at any place other
than that stated in the license or authority be transferred, conveyed or assigned to any other
person or entity. Any transfer of business address, appointment or designation of any agent or
representative including the establishment of additional offices anywhere shall be subject to the
prior approval of the Department of Labor.
Art. 30. Registration fees. The Secretary of Labor shall promulgate a schedule of fees for the
registration of all applicants for license or authority.
Art. 31. Bonds. All applicants for license or authority shall post such cash and surety bonds as
determined by the Secretary of Labor to guarantee compliance with prescribed recruitment
procedures, rules and regulations, and terms and conditions of employment as may be
appropriate.
Art. 32. Fees to be paid by workers. Any person applying with a private fee-charging employment
agency for employment assistance shall not be charged any fee until he has obtained
employment through its efforts or has actually commenced employment. Such fee shall be
always covered with the appropriate receipt clearly showing the amount paid. The Secretary of
Labor shall promulgate a schedule of allowable fees.
Art. 33. Reports on employment status. Whenever the public interest requires, the Secretary of
Labor may direct all persons or entities within the coverage of this Title to submit a report on the
status of employment, including job vacancies, details of job requisitions, separation from jobs,
wages, other terms and conditions and other employment data.
Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder of
authority:
1. To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of
allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than
that actually received by him as a loan or advance;
2. To furnish or publish any false notice or information or document in relation to recruitment or
employment;
3. To give any false notice, testimony, information or document or commit any act of misrepresentation
for the purpose of securing a license or authority under this Code.
4. To induce or attempt to induce a worker already employed to quit his employment in order to offer
him to another unless the transfer is designed to liberate the worker from oppressive terms and
conditions of employment;
5. To influence or to attempt to influence any person or entity not to employ any worker who has not
applied for employment through his agency;
6. To engage in the recruitment or placement of workers in jobs harmful to public health or morality or
to the dignity of the Republic of the Philippines;
7. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized
representatives;
8. To fail to file reports on the status of employment, placement vacancies, remittance of foreign
exchange earnings, separation from jobs, departures and such other matters or information as may be
required by the Secretary of Labor.
9. To substitute or alter employment contracts approved and verified by the Department of Labor from
the time of actual signing thereof by the parties up to and including the periods of expiration of the
same without the approval of the Secretary of Labor;
10. To become an officer or member of the Board of any corporation engaged in travel agency or to be
engaged directly or indirectly in the management of a travel agency; and
11. To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations other than those authorized under this Code and its implementing rules and
regulations.
Art. 35. Suspension and/or cancellation of license or authority. The Minister of Labor shall have
the power to suspend or cancel any license or authority to recruit employees for overseas
employment for violation of rules and regulations issued by the Ministry of Labor, the Overseas
Employment Development Board, or for violation of the provisions of this and other applicable
laws, General Orders and Letters of Instructions.
Chapter III
MISCELLANEOUS PROVISIONS
Art. 36. Regulatory power. The Secretary of Labor shall have the power to restrict and regulate
the recruitment and placement activities of all agencies within the coverage of this Title and is
hereby authorized to issue orders and promulgate rules and regulations to carry out the
objectives and implement the provisions of this Title.
Art. 37. Visitorial Power. The Secretary of Labor or his duly authorized representatives may, at
any time, inspect the premises, books of accounts and records of any person or entity covered
by this Title, require it to submit reports regularly on prescribed forms, and act on violation of
any provisions of this Title.
Art. 38. Illegal recruitment.
1. Any recruitment activities, including the prohibited practices enumerated under Article 34 of this
Code, to be undertaken by non-licensees or non-holders of authority, shall be deemed illegal and
punishable under Article 39 of this Code. The Department of Labor and Employment or any law
enforcement officer may initiate complaints under this Article.
 
2. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense
involving economic sabotage and shall be penalized in accordance with Article 39 hereof.
 
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is
 deemed committed in large scale if committed against three (3) or more persons individually or as a
group.
 
3. The Secretary of Labor and Employment or his duly authorized representatives shall have the power
to cause the arrest and detention of such non-licensee or non-holder of authority if after investigation
it is determined that his activities constitute a danger to national security and public order or will lead
to further exploitation of job-seekers. The Secretary shall order the search of the office or premises
and seizure of documents, paraphernalia, properties and other implements used in illegal recruitment
activities and the closure of companies, establishments and entities found to be engaged in the
recruitment of workers for overseas employment, without having been licensed or authorized to do
so.
Art. 39. Penalties.
1. The penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P1000,000.00) shall be
imposed if illegal recruitment constitutes economic sabotage as defined herein;
2. Any licensee or holder of authority found violating or causing another to violate any provision of this
Title or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of
imprisonment of not less than two years nor more than five years or a fine of not less than P10,000
nor more than P50,000, or both such imprisonment and fine, at the discretion of the court;
3. Any person who is neither a licensee nor a holder of authority under this Title found violating any
provision thereof or its implementing rules and regulations shall, upon conviction thereof, suffer the
penalty of imprisonment of not less than four years nor more than eight years or a fine of not less than
P20,000 nor more than P100,000 or both such imprisonment and fine, at the discretion of the court;
4. If the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon
the officer or officers of the corporation, partnership, association or entity responsible for violation;
and if such officer is an alien, he shall, in addition to the penalties herein prescribed, be deported
without further proceedings;
5. In every case, conviction shall cause and carry the automatic revocation of the license or authority
and all the permits and privileges granted to such person or entity under this Title, and the forfeiture
of the cash and surety bonds in favor of the Overseas Employment Development Board or the
National Seamen Board, as the case may be, both of which are authorized to use the same exclusively
to promote their objectives.
Title II
EMPLOYMENT OF NON-RESIDENT ALIENS
Art. 40. Employment permit of non-resident aliens. Any alien seeking admission to the
Philippines for employment purposes and any domestic or foreign employer who desires to
engage an alien for employment in the Philippines shall obtain an employment permit from the
Department of Labor.
The employment permit may be issued to a non-resident alien or to the applicant employer after
a determination of the non-availability of a person in the Philippines who is competent, able and
willing at the time of application to perform the services for which the alien is desired.
For an enterprise registered in preferred areas of investments, said employment permit may be
issued upon recommendation of the government agency charged with the supervision of said
registered enterprise.
Art. 41. Prohibition against transfer of employment.
1. After the issuance of an employment permit, the alien shall not transfer to another job or change his
employer without prior approval of the Secretary of Labor.
 
2. Any non-resident alien who shall take up employment in violation of the provision of this Title and
its implementing rules and regulations shall be punished in accordance with the provisions of Articles
289 and 290 of the Labor Code.
 
In addition, the alien worker shall be subject to deportation after service of his sentence.
Art. 42. Submission of list. Any employer employing non-resident foreign nationals on the
effective date of this Code shall submit a list of such nationals to the Secretary of Labor within
thirty (30) days after such date indicating their names, citizenship, foreign and local addresses,
nature of employment and status of stay in the country. The Secretary of Labor shall then
determine if they are entitled to an employment permit.