PART II

LICENSING AND REGULATION

RULE I

PARTICIPATION OF THE PRIVATE SECTOR IN THE

OVERSEAS EMPLOYMENT PROGRAM

Section 1. Qualifications. Only those who possess the following qualifications may be permitted to engage in the business of recruitment and placement of Filipino workers:

1. Filipino citizens, partnerships or corporations at least seventy five percent (75%) of the authorized capital stock of which is owned and controlled by Filipino citizens;

2. A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single proprietorship or partnership and a minimum paid-up capital of Two Million Pesos (P2,000,000.00) in case of a corporation; Provided that those with existing licenses shall, within four years from affectivity hereof, increase their capitalization or paid up capital, as the case may be, to Two Million Pesos (P2,000,000.00) at the rate of Two Hundred Fifty Thousand Pesos (P250,000.00) every year.

3. Those not otherwise disqualified by law or other government regulations to engage in the recruitment and placement of workers for overseas employment.

 Section 2. Disqualification. The following are not qualified to engage in the business of recruitment and placement of Filipino workers overseas:

1. Travel agencies and sales agencies of airline companies;

2. Officers or members of the Board of any corporation or members in a partnership engaged in the business of a travel agency;

3. Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer, member of the board or partner of a corporation or partnership engaged in the business of a travel agency;

4. Persons, partnerships or corporations which have derogatory records, such as but not limited to the following:

1) Those certified to have derogatory record or information by the National Bureau of

Investigation or by the Anti-Illegal Recruitment Branch of the POEA;

2) Those against whom probable cause or prima facie finding of guilt for illegal recruitment or other related cases exists;

3) Those convicted for illegal recruitment or other related cases and/or crimes involving moral turpitude; and

4) Those agencies whose licenses have been previously revoked or cancelled by the

Administration for violation of RA 8042, PD 442 as amended and their implementing rules and regulations as well as these rules and regulations.

All applicants for issuance/renewal of license shall be required to submit clearances from the National Bureau of Investigation and Anti-illegal Recruitment Branch, POEA, including clearances or their respective officers and employees.

5. Any official or employee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in the implementation of R.A. 8042, otherwise known as Migrant Workers and Overseas Filipino Act of 1995 and/or any of his/her relatives within the fourth civil degree of consanguinity or affinity; and

6. Persons or partners, officers and Directors of corporations whose licenses have been previously cancelled or revoked for violation of recruitment laws.

RULE II

Section 1. Requirements for Licensing. Every applicant for license to operate a private employment agency shall submit a written application together with the following requirements:

1. A certified copy of the Articles of Incorporation or of Partnership duly registered with the Securities and Exchange Commission (SEC), in the case of corporation or partnership or Certificate of Registration of the firm or business name with the Department of Trade and Industry (DTI), in the case of a single proprietorship;

2. Proof of financial capacity: In the case of a single proprietorship or partnership, verified income tax returns of the proprietors or partners for the past two (2) years and a savings account certificate showing a maintaining balance of not less than P500,000.00, provided that the applicant should submit an authority to examine such bank deposit.

3. In the case of a newly organized corporation, savings account certificate showing a maintaining balance of not less than P500,000.00 with authority to examine the same. For an existing corporation, submission of a verified financial statement, corporate tax returns for the past two (2) years and savings account certificate showing a maintaining balance of not less than P500,000.00 with the corresponding authority to examine such deposit.

4. Proof of marketing capability

1. A duly executed Special Power of Attorney and/or a duly concluded. Recruitment/ Service

Agreement;

2. Manpower request(s) or visa certification from new employer(s)/ principal(s) for not less than one hundred (100) workers; and

3. Certification from Pre-Employment Services Office of POEA on the existence of new market.

5. Clearance of all members of the Board of Directors, partner, or proprietor of the applicant agency from the National Bureau of Investigation (NBI) and other government agencies as may be required; appropriate clearance in case of persons with criminal cases; provided that where the member or partner concerned is a foreigner, clearance from his country of origin shall be required.

6. A verified undertaking stating that the applicant:

1. Shall select only medically and technically qualified recruits;

2. Shall assume full and complete responsibility for all claims and liabilities which may arise in connection with the use of the license;

3. Shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, death and disability compensation and repatriations;

4. Shall guarantee compliance with the existing labor and social legislations of the Philippines and of the country of employment of the recruited workers;

5. Shall assume full and complete responsibility for all acts of its officials, employees and representatives done in connection with recruitment and placement;

6. Shall negotiate for the best terms and conditions of employment;

7. Shall disclose the full terms and conditions of employment to the applicant workers;

8. Shall deploy at least 100 workers to its new markets within one (1) year from the issuance of its license;

9. Shall provide orientation on recruitment procedures, terms and conditions and other relevant information to its workers and provide facilities therefor; and

10. Shall repatriate the deployed workers and his personal belongings when the need arises.

For the purpose of compliance with item (1), the agency may require the worker to undergo trade testing and medical examination only after the worker has been pre-qualified for employment.

7. In case of corporation or partnership, verified undertaking by its officers, directors, partners that they will be jointly and severally liable with the company over claims arising from employer-employee relationship.

8. Individual income tax return of the proprietor, partners, stockholders/incorporators, as the case may be, for the past two (2) years.

9. Proof of possession by the sole proprietor, partner or chief executive officer, as the case may be, of a bachelor’s degree and three years business experience.

10. List of all officials and personnel involved in the recruitment and placement, together with their appointment, bio-data and two (2) copies of their passport-size pictures as well as their clearances from the National Bureau of Investigation and the Anti-illegal Recruitment Branch of the Administration.

11. Copy of contract of lease or proof of building ownership, indicating the office address, providing for an office space of at least one hundred (100) square meters.

12. Proof of publication of notice of the application with the names of the proprietor, partners, incorporators and officers.

13. Certificate of attendance of owner and/or chief executive officer in a pre-application seminar conducted by the Administration. Only applications with complete supporting documents shall be processed.

Section 2. Payment of filing fee. Upon receipt of an application with complete requirements, the

Administration shall require payment of a non-refundable filing fee of P10,000.00 and submission of proof of payment thereof.

Section 3. Action upon the application. Within fifteen (15) calendar days from receipt of an application with complete requirements including proof of payment of the filing fee of P10,000.00, the Administration shall evaluate the pertinent documents, inspect the offices and equipment and determine whether or not to grant or deny the application. Denial of an application will result in the forfeiture of the filing fee.

Section 4. Payment of Fees and Posting of Bonds. Upon approval of the application, the applicant shall pay a license fee of P50,000.00. It shall submit an Escrow Agreement in the amount of

P1,000,000.00, confirmation of escrow deposit with an accredited reputable bank and a surety bond of P100,000.00 from a bonding company acceptable to the Administration and accredited with the Insurance Commission. Agencies with existing licenses shall, within four years from effectivity hereof, increase their Escrow Deposit to One Million Pesos . The bonds and escrow shall answer for all valid and legal claims arising from violations of the conditions for the grant and use of the license, and/or accreditation and contracts of employment. The bonds and escrow shall likewise guarantee compliance with the provisions of the Code and its implementing rules and regulations relating to recruitment and placement, the Rules of the Administration and relevant issuances of the Department and all liabilities which the Administration may impose. The surety bonds shall include the condition “that notice to the principal is notice to the surety and that any judgment against the principal in connection with matters falling under POEA’s/NLRC’s jurisdiction shall be binding and conclusive on the surety. The surety bonds shall cover the validity period of the license.

Section 5. Provisional License. Applicants for new license shall be issued a provisional license which shall be valid for a limited period of one (1) year within which the applicant should be able to comply with its undertaking to deploy 100 workers to its new principal. The license of a complying agency shall be upgraded to a full license entitling them to another three years of operation. Non-complying agencies will be notified of the expiration of their license.

Section 6. Validity of the License. Except in case of a provisional license, every license shall be

valid for four (4) years from the date of issuance unless sooner cancelled, revoked or suspended for violation of applicable Philippine law, these rules and other pertinent issuances. Such license shall be valid only at the place/s stated therein and when used by the licensed person, partnership or corporation.

Section 7. Non-Transferability of License. No license shall be transferred, conveyed or assigned to any person, partnership or corporation. It shall not be used directly or indirectly by any person,

partnership or corporation other than the one in whose favor it was issued. In case of death of the sole proprietor and to prevent disruption of operation to the prejudice of the interest of legitimate heirs, the license may be extended upon request of the heirs, to continue only for the purpose of winding up business operations.

Section 8. Change of Ownership/Relationship of Single Proprietorship or Partnership. Transfer or change of ownership of a single proprietorship licensed to engage in overseas employment shall cause the automatic revocation of the license. A change in the relationship of the partners in a partnership duly licensed to engage in overseas employment which materially interrupts the course of the business or results in the actual dissolution of the partnership shall likewise cause the automatic revocation of the license.

Section 9. Upgrading of Single Proprietorship or Partnerships. License holders which are single

proprietorships or partnerships may, subject to the guidelines of the Administration, convert into

corporation for purposes of upgrading or raising their capabilities to respond adequately to

developments/changes in the international labor market and to enable them to better comply with

their responsibilities arising from the recruitment and deployment of workers overseas.

The approval of merger, consolidation or upgrading shall automatically revoke or cancel the licenses of the single proprietorships, partnerships or corporations so merged, consolidated or upgraded.

Section 10. Derogatory Record After Issuance/Renewal of License. The license of a single

proprietorship or a partnership shall be suspended until cleared by the Administration should any derogatory record be found to exist against the single proprietorship or any or all of the partners, as the case may be. The appointment of any officer or employee of any licensed agency may be cancelled or revoked at any time with due notice to the agency concerned, whenever said officer or employee is found to have any derogatory record, as herein contemplated.

Section 11. Appointment/Change of Officers and Personnel. Every appointment of agents or

representatives of a licensed agency shall be subject to prior approval or authority of the

Administration. The acknowledgment or approval may be issued upon submission of or compliance with the following:

1. proposed appointment or special power of attorney;

2. clearances of the proposed representative or agent from National Bureau of Investigation

(NBI)/Anti-Illegal Recruitment Branch, POEA; and

3. sworn or verified statement by the designating or appointing person or company assuming full responsibility for all acts of the agent or representative done in connection with the recruitment and placement of workers.

Every change in the composition of the Board of Directors of a corporation, appointment or termination of officers and personnel shall be registered with the Administration within thirty (30) calendar days from the date of such change. The agency shall be required to submit the minutes of proceedings duly certified by SEC in case of election of new members of the Board of Directors with their bio-data, ID pictures and clearances.

The Administration reserves the right to deny the acknowledgment or appointment of officers,

employees and representatives who were directly involved in recruitment irregularities.

Section 12. Publication of Change of Directors/Other Officers and Personnel/ Revocation or Amendment of Appointment of Representatives. In addition to the requirement of registration with

and submission to the Administration, every change in the membership of the Board of Directors,

termination for cause of other officers and personnel, revocation or amendment of appointment of

representatives shall be published at least once in a newspaper of general circulation, in order to

bind third parties. Proof of such publication shall be submitted to the Administration.

Section 13. Transfer of Business Address. Any transfer of business address shall be effected only

with prior authority or approval of the Administration. The approval shall be issued only upon formal notice of the intention to transfer with the following attachments:

1. In the case of a corporation, a Board Resolution duly registered with the SEC authorizing the transfer of business address; and

2. Copy of the contract of lease or proof of building ownership. The new office shall be subject to the regular ocular inspection procedures by duly authorized representatives of the Administration. A notice to the public of the new address shall be published in a newspaper of general circulation.

Section 14. Establishment of additional offices. Additional offices may be established subject to the prior approval of the Administration.

Section 15. Conduct of Recruitment Outside of Registered Office. No licensed agency shall conduct any provincial recruitment, jobs fair or recruitment activities of any form outside of the address stated in the license or approved additional office(s) without first securing prior authority from the Administration.

Section 16. Renewal of License. An agency shall submit an application for the renewal of its license on or before its expiration. Such application shall be supported by the following documents:

1. Surety bond duly renewed or revalidated;

2. Renewed escrow agreement in the amount of P1,000,000.00 with a commercial bank to primarily answer for valid and legal claims of recruited workers as a result of recruitment violations or money claims;

3. Audited financial statements for the past two years with verified corporate or individual tax returns. In case the equity of the agency is below the minimum capitalization requirement, it shall be given thirty (30) days from release of the renewed license to submit proof(s) of capital infusion, such as SEC certification of such infusion or bank certification corresponding to the amount infused and treasurer’s affidavit duly received by the SEC. Otherwise, the license shall be suspended until it has complied with the said requirement;

4. Clearances from the National Bureau of Investigation and the Anti-illegal Recruitment Branch for the Board of Directors and responsible officers; and

5. Other requirements as may be imposed by the Administration.

Section 17. Monitoring Compliance with Conditions of License. The Administration shall monitor the compliance of the agencies with their undertakings in connection with the issuance or renewal of the license. Appropriate sanctions shall be imposed for non-compliance with any of their undertakings.

Section 18. Non-expiration of License. Where the license holder has made timely and sufficient application for renewal, the existing license shall not expire until the application shall have been finally determined by the Administration. For this purpose, an application shall be considered sufficient if the applicant has substantially complied with the requirements for renewal.

Section 19. Action on Renewal of License. Within forty eight (48) hours from receipt of the application for renewal with the complete requirements, the Administration shall undertake evaluation and inspection and determine the grant or denial of the application. Licenses of agencies which fail to meet the requirements set by the Administration shall not be renewed.

Only applications for renewal submitted with complete requirements shall be processed.

Section 20. Late Filing of Renewal. Any agency which failed to file an application for renewal of

license may be allowed to renew within thirty (30) days from expiry thereof but shall pay a fine of

P10,000.00.

Section 21. Escrow Deposit as Garnished. As soon as an Order or Notice of Garnishment is served upon the Bank, and the same is correspondingly earmarked, the deposit in escrow of an agency shall no longer be considered sufficient. The Administration shall forthwith serve the agency a notice to replenish its escrow deposit.

Section 22. Replenishment of Surety Bonds/Deposit in Escrow. Within fifteen (15) calendar days

from date of receipt of notice from the Administration that the bonds/deposit in escrow, or any part

thereof had been garnished, the agency shall replenish the same. Failure to replenish such

bonds/deposit in escrow within the said period shall cause the suspension of the license.

Section 23. Release of Deposit in Escrow. A licensed agency which voluntarily surrenders its license shall be entitled to the release of the deposit in escrow, only after posting a surety bond of similar amount valid for four (4) years from expiration of license and submission of the necessary clearances from the National Labor Relations Commission (NLRC) and the Administration.

Section 24. Classification, Ranking and Incentives. The Administration shall undertake the

classification and ranking of agencies. In recognition of their exemplary performance, the

Administration shall issue guidelines for entitlement of agencies to schemes for incentives and

rewards such as extension of validity of license, express processing and in-house documentation

RULE III

Section 1. Inspection for Purposes of Establishment/Transfer of Office. Before issuance of a license, the Administration shall conduct an inspection of the premises and facilities including the pertinent documents of the applicant. Inspection shall likewise be conducted on the new premises in case of transfer of office.

Section 2. Routine/Regular Inspection. All agencies shall be subject to periodic inspection of offices, studios or pre-departure orientation seminar (PDOS) venues by the Administration to determine compliance with existing rules and regulations.

Section 3. Spot Inspection. Inspection may be conducted by the Administration upon receipt of a complaint or report of violation of existing rules and regulation.

Section 4. Authority to Inspect. An authority to inspect shall be issued by the Administration before any inspection may be conducted. Such authority, stating the purpose and subject of inspection, shall be presented to the agency before inspection.

Section 5. Scope of Inspection. Depending on the purpose of inspection, the Administrator or his duly authorized representative may inspect the premises and require the presentation of necessary documents, records and books of accounts of the agency and examine the same.

Section 6. Inspection Program and Procedures. The Administration shall conduct inspection in accordance with the Inspection Program and Procedures of the POEA.

Section 7. Violations Found in the Course of Inspection. Violations found in the course of inspection such as non-compliance with the existing laws, rules and regulations, shall be grounds for the imposition of appropriate sanction or for the denial of application for issuance or renewal of license. A copy of the results of inspection shall be endorsed to the appropriate unit for the conduct of necessary proceedings.

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