Do you have questions about offshoring and outsourcing in the Philippines? Satellite Office answers some of the clients’ most common inquiries regarding the services offered by Satellite Office, Philippines labor laws and taxes, employee compensation, as well as concerns about doing business in the Philippines. If you have any other questions that have not been addressed in this section, please fill out the contact form and we will get back to you within 24 hours.

About Satellite Office

Why choose Satellite Office?

Satellite Office has an experienced cross-cultural management team composed of Filipinos and expatriates with years of experience in the BPO industry as well as dealing with foreign clients and businesses of all scales. We always keep communication lines open and ensure transparency in all processes, so our clients are continually up-to-date and informed about their business operations in the Philippines.

In addition, Satellite Office is the only known provider with highly skilled and experienced management teams based permanently in Australia and the Philippines.

What sets Satellite Office apart from other offshoring companies in the Philippines?

Unlike other offshoring companies, Satellite Office provides an integrated service delivery model through our affiliated companies. Doing business in the Philippines would be a lot easier for client companies as our affiliated companies can take care of the registration and paperwork required as well as offer legal and consulting advice. We can also assist expatriates in their search for housing in Metro Manila or elsewhere in the Philippines and in locating an office space or building for their business, should they decide to expand their operations in the country.

About Offshoring and Outsourcing in the Philippines

Why offshore or outsource to the Philippines?

SMEs and multinational corporations from across the globe such as JP Morgan Chase, IBM, and Accenture have outsourced and offshored jobs in the Philippines because of the following factors:

  • Lower cost in labor and operational expenditure
  • Professional and reliable work ethic
  • Globally competitive and educated labor force
  • Strong proficiency in the English language and Western culture
  • Excellent infrastructure and continued investment

What services can be outsourced or offshored to the Philippines?

The Philippines is the leading contact centre hub in the world because of the Filipinos’ strong proficiency in English. However, the Philippines is also a global leader in a wide variety of other knowledge-based disciplines, processes and tasks, taking advantage of the country’s talented population and low labour costs. Read more about the different services that can be offshored to the country in the Areas of Expertise section.

How much time do we need to recruit candidates for our business in the Philippines?

This depends on the number of candidates you need and their skill sets. Generally speaking, Satellite Office can post job advertisements, complete the interview process and complete the selection and finalisation process (with your final approval) within 3 to 8 weeks, depending on the notice period.

How long does it take to set up an office in the Philippines?

With a serviced office, you can set up your operations in a short space of time, usually within 1 week (subject to availability). The impact on timing is usually gaining a full understanding of the specific IT and telecommunication requirements. This is normally completed either during the Initial Assessment or in parallel during the recruitment process so as not to impact overall timing

What is the time difference between the Philippines and Australia?

The Philippines is in the same time zone as Western Australia. However, Daylight Saving Time is not observed in the Philippines.

About Satellite Office Offshoring Process

Is there a minimum term required under the Full Service Model?

Yes. Minimum term is 6 months. Some of our clients choose to sign longer term agreements to enjoy improved terms.

How do I communicate with my Leased Staff?

Satellite Office provides your Leased Staff with PCs and soft phones, with optional hard desk phones. You will be able to contact your Leased Staff via telephone, or engage in a video conference with your Leased Staff through Skype or other video conferencing options.

How can I efficiently manage my team?

The most effective method in managing a remote team is treating them as part of your team. This is as simple as regular communication via Skype, email or instant chat, as well as including the team on company communications. Filipino staff are highly committed and effective and place high emphasis on team culture. This can also include facilitating local social interaction on a semi-regular basis. Our team will support you in this process.

Is there a minimum or maximum number of Leased Staff members I can hire through Satellite Office?

There is no minimum or maximum number of Leased Staff team members you can hire through Satellite Office. The model is effective with a team from as little as 2 and upwards to very large teams, with flexibility to scale up and down.

What will Satellite Office provide my team?

Satellite Office provides Leased Staff with a high quality working and office environment, including the latest technology, ultra-modern and premium office facilities in prime CBD locations in either Makati or Bonifactio Global City, with the latest desktops installed with Microsoft Office applications, business-grade broadband, and a host of productivity tools.

About Risks in Offshoring

How do I ensure that the employees possess the skills and attitude needed for the job?

Satellite Office conducts a thorough background check and uses an established recruitment process that allows us to effectively screen the employees we are hiring and evaluate if it suits the client requirements. The clients are also involved in the interview and selection processes to ensure that all the employees they would be hiring are fit for the position.

Can I cancel the staff leasing service if the process is completed & there isn't a suitable candidate?

To date, clients have not experienced difficulty in finding the employee they need in the Philippines. However, in case this occurs, clients would only be invoiced once a candidate has been successfully placed (with the client’s final approval).

How does Satellite Office protect intellectual property?


The following issues are key to intellectual property:

  • Creation: The employment contract explicitly states that all work created by your Leased Staff while performing their duties are taken to be your exclusive property.
  • Protection: Satellite Office takes reasonable measures to protect your intellectual property by preventing theft or breaches in confidentiality.Satellite Office maintains a highly secure work environment monitored by security personnel, including Biometric access, Employee ID and proximity cards as well as additional security measures. There is also a Data Protection Policy which all Leased Staff are obligated to follow.

How can my Leased Staff securely deliver finished work?

Your Leased Staff only take direction from you in relation to their day-to-day tasks. You need to instruct them and direct them in this regard. In relation to security, we can assist you achieve a highly secure work environment, in a similar way to your local office, or in many instances an improvement on this. Many of our clients have virtual private networks (VPNs) set up to our office.

In the event of a system failure, is Satellite Office under obligation to fix the system?

Satellite Office provides full system backup and 24/7 IT support from our central NOC, which covers provision of emergency power, redundant internet connection, and other amenities necessary for business operations. This provision is included in our client proposal and agreement.

About Benefits and Termination

What is the total cost for the Leased Staff?


The total cost for the Leased Staff is an all-inclusive fee including 2 components, being the Direct Leased Staff Costs as well as the Monthly Solution Fee:

  1. Satellite Office does not include any mark-up or generate any fees for the Direct Leased Staff Costs. These costs include Gross Salary, Mandatory 13th Month Pay, Private Medical Insurance and Employer Statutory Costs. These costs can also include optional staff bonuses, or the provision for a free lunch.
  2. The Monthly Solution Fee includes the provision of the complete Managed Solution, including Serviced Office, Staff Leasing, IT Support, HR, Payroll and other support services.

Significant cost savings of between $35,000 to $70,000 are achieved per person, depending on the role, compared to the Australian equivalent.

Is it possible to provide a medical benefit for the employees?

Yes. Aside from the government-mandated Philhealth contribution, Satellite Office provides an additional healthcare insurance for all employees. This usually costs approximately Php 1,000 (AUD 25) a month.

What will happen if after several months we don't want an employee because of the quality of his work?

Philippines staff generally have a 6 month probation period, called Regularization. During this period, performance management issues are more straight forward and relatively similar to an Australian staff member on probation. Satellite Office would assist in ensuring Performance Management was managed in accordance with the local labour code by providing proof and necessary documents.

If termination occurs during the first 6 months’ probationary period, employers are required to provide 1 week notice to the employee.

However, for regularised employees (6 months to 1 year tenure), employers would need to provide 1 months’ notice (unless there were valid grounds for termination), while for employees with a tenure of 2 years, would be equivalent to 2 months’ salary, and so on.

About Philippine Labour Law

What are the normal hours of work of an employee?


The normal hours work of an employee shall not exceed 8 hours a day. However, Health Personnel shall have a maximum of 40 hours a week. If made to work in excess of 40 hours, they are entitled to 30% additional pay.

What hours are supposed to be paid?

So called Compensable Hours include all time during which an a) employee is required to be on duty, to be at employer’s premises or prescribed place or b) all time during which an employee is suffered or permitted to work.

Can the normal hours be less than 8?

Yes. The law sets a maximum number of hours but does not prohibit work done less than eight hours. Thus, part-time work is allowed and pay corresponding to the actual hours worked will be paid.

What is overtime?

Overtime Work is work rendered beyond 8 hours. Every hour worked in excess of 8 hours earns an
additional pay of 25%. The rate is 30% if done on a rest day or holiday.

How much should a part-time worker earn?

The wage and benefits of a part-time worker are in proportion to the number of hours worked. Assuming that he should be earning P400.00 for an eight-hour work, he shall then get P200.00 for work done in four hours.

Can overtime not be paid because of undertime on another day?

No, the law prohibits offsetting overtime with undertime on another day. The hourly rate of overtime is higher than the hours missed in cases of undertime.

Who are covered by the rules on overtime?

Generally, everyone is covered by the law on overtime. However, the following have been exempted by the law: managerial personnel, government employees, non agricultural field personnel whose hours of work cannot be determined, family members dependent upon the employer for support, househelpers, those in the personal employ of another, and piece rate workers.

Is work done between 10:00 p.m. and 6:00 am paid higher than normal?

Yes. Under the Labour Code, every employee shall be paid a night shift differential of not less than 10% of his regular wage for each hour of work performed between 10:00 p.m. and 6:00 am the following day.

What is a weekly rest day?

It is the required rest period of not less than 24 consecutive hours after every six normal workdays.

How much is the pay for work on a rest day?

The compensation is the regular wage plus 30% thereof.

Who chooses the rest day?

The employer shall determine the weekly restday. However, the employer shall respect the preference of employees as to their weekly restday when such reference is based on religious grounds.

How much is work on a Sunday paid?

The compensation is the regular wage unless Sunday happens to be the rest day of the employee. If Sunday is the rest day, the employee shall be entitled to the additional 30% pay.

What is Holiday Pay?

Holiday Pay refers to pay received by an employee on the occasion of a regular holiday or special day. In the case of regular holiday, the employee is paid even if he/she did not work. He/She receives double pay if he/she works on a regular holiday. In the case of a special day (see below), the employee is not paid if he/she does no report for work. But if the employee works on a special day, she is entitled to 130% of her usual pay.

What are the 2015 holidays in the Philippines?

Kinds of Leaves under the Philippine Labor Law

A. Regular Holidays
New Year’s Day - 1 January(Thursday)
Maundy Thursday - 2 April
Good Friday - 3 April
Araw ng Kagitingan - 9 April (Thursday)
Labor Day - 1 May (Friday)
Independence Day - 12 June (Friday)
National Heroes Day - 31 August (Last Monday of August)
Bonifacio Day - 30 November (Monday)
Christmas Day - 25 December(Friday)
Rizal Day - 30 December(Wednesday)

 

B. Special (Non-Working) Days
Chinese New Year - 19 February (Thursday)
Black Saturday - 4 April
Ninoy Aquino Day - 21 August (Friday)
All Saints Day - 1 November (Sunday)
Additional special (non-working) days - 2 January (Friday)
- 24 December (Thursday)
Last Day of the Year - 31 December (Thursday)

 

C. Special Holiday (for all schools)
EDSA Revolution Anniversary - 25 February (Wednesday)

* source: Presidential Proclamation 831 series of 2014

What are leaves?

These are days when employees may still be paid despite their absence from work. The leaves allowed by law are discussed below, but the employer may add (not subtract) to these leaves out of the goodness of her heart or under a negotiated Collective Bargaining Agreement (CBA).

What are leaves under the law?

Service Incentive Leave

Service Incentive Leave Pay is the benefit of employees to avail of leave with pay for 5 days provided she has rendered service for at least one year.

Maternity Leave

A female member of the Social Security System (SSS) who has paid at least 3 monthly contributions in the twelve-month period immediately preceding the
semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to 100% of her average daily salary. The benefit is for 60 days for normal delivery and 78 days for caesarian delivery for the first four deliveries and miscarriages.

Leaves under RA 9262

Women victims of violence provided under R.A. 9262 of the Anti-Violence against Women and their Children Act are entitled to a paid leave of absence from work up to 10 days.

Solo Parents’ Leave

Persons who fall under the definition of solo parents and who have rendered service of at least one year are entitled to 7 working days of leave to attend to their parental duties.

Paternity Leave

The law provides for paternity leave of 7 days with full pay to all married male employees in the private and public sectors. It is only available for the first four (4) deliveries of the legitimate spouse with whom the employee is cohabiting.

Leaves under RA 9710

The Magna Carta of Women introduced a 2 month leave for women with full pay based on gross monthly compensation, for women employees who undergo surgery caused by gynecological disorders, provided that they have rendered continuous aggregate employment service of at least six (6) months for the last twelve (12) months

Generally, what is the rule on wages?

Under Philippine law, wages are remunerations or earnings for services rendered. Employers and employees may agree on rate but should not fall below the minimum wages set by the Regional Tripartite Wages and Productivity Boards (RTWPB} which has jurisdiction over the place of work. You can find the rate of minimum wage by going to the website of the National Wages and Productivity Commission (NWPC) http://www.nwpc.dole.gov.ph/rtwpb.html.

The pay of employees is intended to be given whole to the employee in Philippine legal tender. So while payment by check and through automated teller machines (ATMs) are allowed, vouchers, promissory notes and gift certificates are not. Deductions from employee wages are generally frowned upon with only a few allowed by law including income tax, contributions to social welfare agencies such as SSS and Pag-lbig, and union dues under appropriate agreements.

Minimum Wage Earners Exempt from Income Tax?

A new law passed in 2008 exempts minimum wage earners from paying income taxes. Because of this, no deductions will be made from their pay on the basis of income tax.

What is a Bonus?

Bonus is the amount granted for employee’s industry and loyalty, which is generally discretional. However, there have been times when the grant of bonuses have been considered as long standing practice and therefore cannot be simply withheld without cause.

What is 13th month pay?

13th month pay is the 1/12 of the basic salary earned by the employee during the year. It is compulsory and to be given not later than December 24 of the year.
See all the Philippine Labor Law here on this link