Revised IRR of Article 96 of the Labor Code of the Philippines (Service Charges Collected by Hotels, Restaurants and Other Similar Establishments)

The Department of Labor and Employment (“DOLE”) issued Department Order No. 242, S. 2024 (“DO 242”) on 1 February 2024 which provided for the revised implementing rules and regulations (‘’IRR”) of Article 96 of the Labor Code. 

Under DO 242, the DOLE deleted the phrase under the previous Department Order No. 206, S. 2019 (“DO 206”) which excludes non-regular workers from covered workers entitled to service charges. 

Under DO 206, the covered workers are all employees, except managerial employees as defined herein, under the direct employment of the covered establishment, regardless of their positions, designations or employment status, and irrespective of the method by which their wages are paid. In the new rule, the underlined portion has been deleted, entitling non-regular workers to receive a share in the service charges. 

Further, DO 242 also amended the dispute resolution provision by providing other channels for referral of disputes arising from the distribution of the service charge to the DOLE Regional, Provincial, Field, or Satellite Office, which has jurisdiction over the workplace, for conciliation through the Single-Entry Approach, instead of the previous provision which only mentions the DOLE Regional Office.