“Just Hire Someone in the Philippines” Isn’t as Simple as It Sounds

It sounds easy. Post a job, hire someone, start working together. The complexity shows up later,  usually when you’re the one liable for getting local labor law wrong.

What most companies don’t realize until it’s too late

Hiring in the Philippines means operating under a legal framework that has nothing to do with how employment works in Australia, the US, UK, New Zealand, or Canada. A few examples from the Philippines:

• 13th month pay is a legal requirement, not a bonus at the employer’s discretion.
• SSS, PhilHealth, and Pag-IBIG contributions are mandatory and must be remitted correctly.
• DOLE regulations govern everything from working hours to termination procedures, and getting termination wrong can create real legal exposure.

Get any of this wrong and the risk doesn’t stay theoretical. It becomes fines, disputes, or reputational damage with the very talent you’re trying to retain.

Why an Employer of Record exists

An Employer of Record model separates two things that companies usually try to handle themselves: accessing great talent, and carrying the legal and compliance burden of employing them.

Under an EOR structure:

• The client company directs the work, manages the relationship, and builds the team.
• The EOR is the legal employer of record –  running payroll, remitting statutory contributions, and staying current with labor law changes.

This isn’t a workaround. It’s the correct way to employ someone in a country where you have no legal entity and no internal compliance expertise.

The cost of doing it cheaply

Plenty of offshore staffing options skip the EOR structure entirely, treating hires as informal contractors to avoid the “overhead” of proper employment. This shifts risk onto the client and, often, onto the worker who ends up without proper benefits or protections.

Doing it properly costs more than doing it cheaply. But cheap offshore staffing has a way of becoming expensive the moment something goes wrong.

Bottom line

If you’re hiring in the Philippines, the question isn’t whether you need compliance handled correctly. It’s whether you’re handling it yourself, or letting someone whose job it is handle it for you.