What Employee Benefits Should I Give My Filipino Remote Team?
In this post:
The advantages of offering employee benefits
Which employee benefits are typically provided in the Philippines?
Actions that remote employers can take
Prior to designing your benefits package, take into account the following factors
Key Takeaways
#1 — The advantages of offering employee benefits
Other companies are also hiring Filipino remote workers. The Philippines continues to be one of the world's primary global outsourcing hub locations, with an incredibly proficient workforce, attributable to low expenses, and a favourable business atmosphere. As an employer, you are up against prominent players as well as small businesses in the industry.
By incorporating a competitive salary with benefits packages, you can:
Foster a company culture that promotes loyalty and cultivates knowledge-sharing
Increase the number of applicants
Boost employee wellness, drive and efficiency
Reduce time and cost by retaining employees
Which benefits should you offer your remote Filipino workers? To provide some inspiration, we'll cover both the compulsory benefits that employees in the Philippines typically receive, as well as additional incentives that you can possibly include.
#2 — Which employee benefits are typically provided in the Philippines?
Specific Leaves (Parental)
Pregnant women are entitled to a paid maternity leave of up to 105 days, and solo parents can take an extra 15 days off. It's worth noting that employers are not obligated to pay their staff during this period; however, eligible members can receive a maternity cash allowance from the country's social security system (SSS). Working dads also have the option of taking time off to assist their partners and newborns. They are eligible for up to 7 days of paid paternity leave.
Leave of Absence
The typical schedule for the majority is 5 workdays per week, 8 hours a day. According to the law, they are entitled to 5 paid leaves each year. On average, Filipino employees typically receive 10-15 paid vacation days, 1-3 emergency leaves and 8-10 paid sick leaves per year. These don’t include time off during regular and special holidays such as Holy Week, Christmas and New Year. You can choose to adhere to the standard leave benefits or implement your own set of policies.
13-Month Salary
The term “13-month pay” refers to an additional prorated payment that Filipino employees are entitled to receive at the end of each year, and is a mandatory benefit for all employees who have been employed for at least a month. While it’s similar to a bonus, it’s distinct in that it’s mandated by law, unlike Christmas bonuses which are optional. Most employers provide the 13th-month pay in full at the end of the year, though some may split it into two payments, one in the middle of the year and the other during December. However, your full-time remote hires from Interstellar are under Independent Contractor Agreements, which means they aren’t entitled to 13-month pay so to retain your employees, we suggest offering it as a benefit.
Social Security System (SSS)
Private workers in the Philippines are offered various benefits by the SSS, including maternity allowances, disability protection, sickness, unemployment or involuntary separation benefits, retirement plans, death assistance and funeral assistance. Similar to medical care, independent contractors who work remotely are expected to handle their own SSS contributions.
The most recent fee schedule for the SSS in the Philippines indicates that virtual assistants can expect to pay between PHP 240 and PHP 2,400 (roughly $5-$50) per month, depending on their salary bracket. Independent contractors also have the flexibility to pay their SSS contributions quarterly or annually.
Medical Care – Philippine Health Insurance Corporation (PhilHealth)
While private employers in the Philippines are required to contribute to PhilHealth, remote workers generally need to pay for their own healthcare contributions. In 2022, this can cost anywhere from PHP 400 to PHP 3,200 (about $8-$65) per month, depending on the individual's salary. It’s important to note that remote workers may not have access to the same additional medical and dental insurance benefits that local employees may receive. Such benefits can sometimes extend to their dependents of employees, such as parents, children or spouses.
The cost of private health insurance coverage in the Philippines can be quite variable, with prices ranging from about PHP 10,000 to PHP 60,000 ($200-$1,100) Factors that can influence the final cost include the age of the policyholder, the level of coverage desired, their health status and lifestyle and the number of dependents that will be covered under the policy.
Home Development Mutual Fund (HDMF/PAG-IBIG)
Beneficiaries of the HDMF, also known as PAG-IBIG, can enjoy a range of perks, including multipurpose loans and housing, access to funds for unexpected events, and a saving program that offers tax-free dividends. Although many employers contribute to their workers’ HDMF accounts, self-employed individuals like remote contractors are responsible for covering the full cost themselves. Currently, these contributions generally amount to 1-2% of their monthly salary, depending on how much they earn.
Night Shift Differential Pay
To align with the time zones of North America and Europe, remote employees in the Philippines frequently work overnight shifts. As a result, the government has imposed a requirement on employers to grant a 10% increase in compensation to workers who start their shifts between 10 pm and 6 am the following day.
#3 — Actions that remote employers can take
What are some potential strategies to offer comparable incentives? As an employer who operates remotely, there are numerous possibilities to explore. Here are a few examples:
Pay for their Government-Mandated Contributions
Although working online offers many advantages, one significant disadvantage for Filipino remote workers is that they must pay for all of their government-mandated contributions with their own money. However, you can make your job offer more appealing compared to others by choosing to shoulder these contributions by incorporating an allowance in their monthly salary. While this may cost your company a bit more, it will still be more affordable than hiring someone in your country.
Useful suggestion: To ensure that your remote worker is using their allowance for the intended purpose of covering their contributions, consider implementing a reimbursement program. This approach promotes transparency and motivates your assistant to settle their payments promptly.
Policy for Flexible Time Off
There are several ways to structure leave policies for remote workers. One approach is to exceed the average number of vacation and sick days compared to the average local firm, or alternatively allow them to take time off during Filipino holidays rather than American ones, ensuring that work continues uninterrupted during major US holidays and as long as they meet their deadlines and delegate responsibilities appropriately.
Rewards for excellent performance and evaluations of work performance
Recognize your top-performing remote workers with financial incentives by setting quarterly targets and rewarding them when they achieve important metrics or quotas. Establishing clear goals can increase productivity and even foster healthy competition in the workplace.
13-Month Pay
Offering a 13th-month pay can make your job offer more appealing to highly qualified Filipino professionals, as many foreign employers don’t provide this perk. Even if you decide not to provide a 13th-month pay or a Christmas bonus, it’s a good idea to send a small yet considerate gift basket to your remote staff as a token of appreciation.
Well-Being and Educational Allowance
Consider offering your remote team an allowance program to support their well-being and professional growth. This could cover expenses such as therapy sessions, educational courses that support your remote worker’s physical and mental wellness, and gym memberships, as well as their personal development and growth.
Yearly Gatherings and Excursions
The reality is that working remotely can often be isolating. If you have a dispersed team in the Philippines, consider setting aside funds for a yearly gathering. Meeting in person can facilitate the development of close bonds and enhance team spirit and motivation.
Allowance/Compensation from Remote Work
Support your remote worker in creating a more productive home office by providing them with a remote work allowance. They can use it to purchase devices or equipment to enhance their remote work setup.
#4 — Prior to designing your benefits package, take into account the following factors
Type of Job Assigned
Do these benefits align with the requirements of the job? Assess the needs of the role and determine which benefits would be most valuable. How will they aid in the professional development of your team?
Qualification
Should these benefits be available immediately upon hire? It’s recommended to wait for a few months before offering some of these benefits to your remote staff
In addition, employee retention is an important factor to consider. Could employees become eligible for additional perks based on their duration in the company? How will you use these benefits to minimize employee turnover?
Culture
How will these benefits align with your organization's values and work culture?
Allowance for Expenses – Financial Plan
Do you have the necessary financial resources to sustain these benefits? Can you ensure that you will be able to continue providing these perks to your team as you grow?
Key Takeaway
Offering a comprehensive benefits package, in addition to a competitive salary, can play a significant role in the recruitment and retention of top-notch talent from the Philippines. By gaining an understanding of the customary benefits received by Filipinos, you can design a benefits package that is well-suited to the needs of both your organization and your remote workers.
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