About Contractor/Subcon

New Provisions of D.O 174

  • Reiterates the prohibition against LOC based on statutory definition and jurisprudence

  • Expands illicit forms of employment arrangements:

    1. contracting out of work to an in-house cooperative:

    2. requiring employees to become members of cooperative; and

    3. other schemes, practices or arrangements designed to circumvent the worker’s right to security of tenure

  • Removes the provision that employment contract is co-terminus with the service agreement.

  • Increases the substantial capital requirement from P 3M to P 5M.

  • Increases registration fee from P 25,000.00 to P 100,000.00.

  • Shortens the validity of the certificate of registration of contractors from 3 years to 2 years.

  • In case of termination due to expiration of Service Agreement, failure of contractor to provide new employment to the employee within 3 months shall entitle the latter to payment of separation benefits

  • Adds as ground for cancellation of registration violations of any provisions of the Labor Code

  • Reduces the period within which Regional Directors shall resolve filed complaints from 10 days to 7 days

  • Blacklists contractor whose registration has been cancelled including any of its officers to operate or apply for new registration as contractor under either the same or different name