Is it legal to hire Filipino staff directly?
Probably, for people who work from inside the Philippines, but the question is less settled than either side admits. Philippine law bans direct hiring for overseas employment, which the Labor Code defines as work outside the Philippines. Warnings that apply the ban to remote staff cite no authority, so take Philippine legal advice before relying on this.
This guide is for Australian and New Zealand owners who hire, or are thinking of hiring, Filipino professionals. We are not lawyers, this is general information, not legal advice, and we have not found the question answered in any statute or official guidance we could read.
What are the 2026 "criminal risk" warnings saying?
That hiring a Filipino worker without a licensed agency can amount to illegal recruitment, with prison terms and large fines. A Philippine recruitment agency published one such warning on 22 October 2026, and a Philippine law firm's guide makes similar claims. Both are written by businesses that sell the licensed or legal route, which does not make them wrong but is worth knowing.
The warnings are built on real law. The question is whether that law reaches your situation, which is usually a Filipino professional working from home in Manila or Cebu for an Australian or New Zealand business.
What does Philippine law actually ban?
Hiring a Filipino for overseas employment without going through authorised channels, and recruiting workers without a licence or authority. Table 1 sets out the main rules and whether each clearly reaches remote work done inside the Philippines.
Table 1: What the main Philippine rules say, and whether each clearly reaches remote work inside the Philippines
| Rule | What it says | Who it targets | Clearly reaches remote work in the Philippines? |
|---|
| Labor Code Art. 13, definition of overseas employment | Overseas employment means employment of a worker outside the Philippines | Defines the scope of the direct-hire ban | No: it points away from work done inside the Philippines |
| Labor Code Art. 18, ban on direct hiring | No employer may hire a Filipino worker for overseas employment except through authorised boards and entities; exceptions include diplomatic corps, international organisations and employers the Secretary of Labor allows | Employers hiring Filipinos for work outside the Philippines | Not clearly: it is framed around overseas employment |
| RA 8042 as amended by RA 10022, illegal recruitment | Canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, including promising or advertising employment abroad, by anyone without a licence or authority; simple offence carries 12 years and one day to 20 years and PHP 1 million to 2 million; syndicated or large-scale recruitment is economic sabotage (life imprisonment, PHP 2 million to 5 million) | Recruiters without authority, and the officers who own, control, manage or direct a company | Not clearly: it is framed around employment abroad |
| Labor Code Arts. 13 and 25, recruitment and placement | Recruitment and placement covers acts done locally or abroad, whether or not for profit; offering employment for a fee to two or more people is deemed recruitment; the private sector takes part in recruitment locally and overseas | Anyone who recruits or places workers for a fee | Yes, for intermediaries: a firm that places workers for a fee needs authority; DOLE's local recruitment rules (DO 141-14, per a secondary summary) apply |
| Migrant Workers Office advisory (Vancouver), 22 January 2026 | Procedure for accrediting foreign employers and for exemption requests from the ban on direct hiring, for workers going abroad | Foreign employers of workers deployed overseas | No: it does not mention remote work |
Sources: Labor Code of the Philippines (Presidential Decree 442, as reproduced on Lawphil; Arts. 13, 18, 25); Republic Act 8042 and Republic Act 10022 (Lawphil); MWO Vancouver Advisory No. 01 s. 2026; jur.ph summary of DOLE Department Order 141-14 (secondary, current status not confirmed). Our reading, not legal advice; a Philippine court or regulator may take a wider view.
The Labor Code defines overseas employment as employment of a worker outside the Philippines. A Filipino who works from a Manila apartment for a Sydney business is employed to work inside the Philippines, so on the text we read the ban on direct hiring for overseas employment does not obviously apply. That is our reading, and a Philippine court or regulator could take a wider view.
What do the warnings get right?
Four things. First, the ban is real and the penalties are severe. Simple illegal recruitment under RA 10022 carries 12 years and one day to 20 years in prison and a fine of PHP 1 million to PHP 2 million, and recruitment by a syndicate of three or more people, or against three or more people, is economic sabotage punishable by life imprisonment. If you ever move a hire to Australia or New Zealand, that is overseas employment and these rules apply.
Second, intermediaries carry the main exposure. The Labor Code defines recruitment and placement to include acts done "locally or abroad", and treats anyone who offers or promises employment for a fee to two or more people as engaged in it, so a firm that places workers for a fee needs authority. Liability for companies falls on the officers who own, control, manage or direct the business.
Third, a contractor label does not protect you from labour claims. A worker engaged as a contractor who is in substance an employee can claim 13th month pay and other benefits for the whole period. Fourth, the employer obligations are real: SSS, PhilHealth and Pag-IBIG contributions and 13th month pay due by 24 December.
What do the warnings get wrong or overstate?
Mainly three things. They treat remote work inside the Philippines as overseas employment without citing authority. The one warning that addresses it says the rules "still apply" to a worker physically in the Philippines who serves foreign payors, gives no citation and says the Department of Migrant Workers was still drafting guidelines.
They also disagree about the penalties, quoting prison terms of 8 to 20 years and 12 to 20 years, while RA 10022 sets 12 years and one day to 20 years for the simple offence. And they blur the line between recruiters and employers. The offence is framed around recruiting workers without authority, and nothing in the statutory text we read says an employer who engages one remote worker is committing it, although we would not treat that silence as a guarantee.
The 2026 official guidance we found points the same way. An advisory from the Philippine Migrant Workers Office in Vancouver, dated 22 January 2026 and effective 1 February 2026, covers accreditation of foreign employers and exemption requests from the ban on direct hiring for workers going abroad. It does not mention remote work.
Which engagement models carry which risk?
Different questions apply to each, and none is risk-free. Table 2 sets out the common models and the main legal question for each, in our own analysis.
Table 2: Common ways to engage a Filipino professional, and the main legal question for each
| Model | What it is | Main legal question (our analysis) | Who carries the risk |
|---|
| Direct contractor | A self-employed professional who invoices you | Is the person genuinely independent (control, tools, ability to substitute, other clients)? Misclassification claims arise in the Philippines and under section 15AA of the Fair Work Act in Australia | You and the worker |
| Employer of Record (EOR) | A Philippine entity employs the worker and invoices you | Is the EOR properly registered and compliant on payroll, SSS, PhilHealth, Pag-IBIG and 13th month pay, and does it avoid labour-only contracting and co-employment issues? | The EOR, with residual risk to you |
| Your own Philippine entity | You set up a local company that employs the worker | Registration, tax, payroll and doing-business obligations, plus cost and administration | You |
| Philippine outsourcing company | A local employer contracts with you and employs the workers | How the contract allocates control, responsibility and the worker relationship | The outsourcer, with some risk to you |
| Any provider that recruits for a fee | A firm that finds and places the worker | Does it hold the DOLE licence or authority for recruitment and placement, and does it charge the worker anything? | The provider and its officers; ask |
| Worker relocating to Australia or New Zealand | A Filipino hired to work in your country | This is overseas employment: the Art. 18 ban, Department of Migrant Workers employer accreditation and exemption requests apply | You and the worker; take advice first |
Source: Pear Tree analysis; model descriptions are consistent with our published compliance guide and with general descriptions in Philippine law-firm commentary (Respicio and Co., 29 April 2026), which cites no statute for these points. This is not legal advice and not a ranking of lawfulness.
We do not claim any one of these is the only lawful route for remote work. The point is that the model decides who the legal employer is, who recruits, and who carries a Philippine regulator's view if it differs from ours.
What should you ask any provider?
Ask in writing, and ask us too. Table 3 lists questions that separate a provider that has thought about Philippine law from one that has not.
Table 3: Questions to ask any provider about Philippine law, in writing
| Question | Why it matters |
|---|
| Which Philippine entity employs or contracts the worker, and where is it registered? | It identifies who is legally responsible for payroll, SSS, PhilHealth, Pag-IBIG and 13th month pay |
| If you recruit for a fee, which DOLE licence or authority do you hold, and what is its number? | Offering employment for a fee to two or more people is deemed recruitment and placement, and unlicensed recruitment is the core of the illegal recruitment offence |
| Has Philippine counsel advised in writing on remote work for foreign employers and the Department of Migrant Workers rules? | The question is not answered in any statute or official guidance we could read |
| Do you charge the worker any fee? | A secondary summary of DOLE's local recruitment rules says agencies cannot collect fees from workers and may charge employers only |
| How are 13th month pay, SSS, PhilHealth and Pag-IBIG handled, and who pays? | They are statutory, and a contractor label does not remove them if the person is in substance an employee |
| What happens if the worker later relocates? | Relocation is overseas employment and triggers the Art. 18 ban and Department of Migrant Workers rules |
| Who bears the cost if a regulator takes a different view? | Replacement terms, indemnities and notice periods are contract points to settle before you sign |
Source: Pear Tree analysis; Labor Code Arts. 13 and 25; DOLE Department Order 141-14 (jur.ph summary; current status not confirmed). General information, not legal advice.
A provider that cannot name the Philippine entity involved, or that charges the worker a fee, is a warning sign whatever the route. A secondary summary of DOLE's local recruitment rules (Department Order 141-14, whose current status we have not confirmed) says agencies cannot collect fees from workers and may charge employers only.
What should an Australian or New Zealand business do now?
Do not panic, and do not ignore it. Get an opinion from Philippine counsel on remote work for a foreign employer, choose a model deliberately, document it, and keep a worker's relocation as a separate decision that triggers fresh advice. We are a placement company, not a law firm, and this article does not set out our own licensing position, so ask us for the Philippine entity and authority details as you would any provider.
The Australian and New Zealand side is covered separately in our guides on the Fair Work Act and on engaging contractors, including the whole-of-relationship test in section 15AA of the Fair Work Act.
The bottom line for Australian and New Zealand owners
Hiring a Filipino professional who works from the Philippines is not clearly the crime some warnings suggest, and it is not clearly safe either. Pear Tree, with offices in Sydney, Auckland, Hawke's Bay, Cebu, Manila and Cape Town, has placed talent with 750+ Australian and New Zealand businesses, but you should still take Philippine advice, ask for answers in writing and revisit the position as the Department of Migrant Workers and DOLE clarify it.
Frequently asked questions
Is it illegal to hire Filipino staff directly?
Not clearly, for Filipinos who work from inside the Philippines. Philippine law bans direct hiring for overseas employment, which the Labor Code defines as employment of a worker outside the Philippines, and illegal recruitment is aimed at recruiting without a licence or authority. Warnings that apply the ban to remote staff cite no authority, but the question is unsettled, so take advice from Philippine counsel. This is general information, not legal advice.
Does the Philippine ban on direct hiring apply to remote workers?
We found nothing in the statutory text that says it does. Article 18 of the Labor Code bans hiring a Filipino for overseas employment except through authorised channels, and overseas employment is defined as work outside the Philippines. One law firm guide says the rules still apply to a worker physically in the Philippines serving foreign payors, but it cites no authority and says guidelines were being drafted. A Philippine court or regulator could take a wider view.
What are the penalties for illegal recruitment in the Philippines?
Under RA 10022, simple illegal recruitment carries 12 years and one day to 20 years in prison and a fine of PHP 1 million to PHP 2 million. Recruitment by a syndicate of three or more people, or against three or more people, is economic sabotage punishable by life imprisonment and a fine of PHP 2 million to PHP 5 million. Liability for a company falls on the officers who own, control, manage or direct the business.
Do I need a licensed agency to hire Filipino remote staff?
We found no statute or official guidance saying you must for a worker you hire directly to work inside the Philippines. Anyone who recruits or places workers for a fee needs authority, so ask any provider which DOLE licence or authority it holds and which Philippine entity employs the worker. Take Philippine legal advice before you decide.
What changes if my Filipino hire moves to Australia or New Zealand?
Relocation is overseas employment, so the ban on direct hiring and the Department of Migrant Workers rules apply. A January 2026 advisory from the Philippine Migrant Workers Office in Vancouver covers accreditation of foreign employers and exemption requests for workers going abroad. Take advice before the worker moves and treat it as a new engagement, not a continuation.
About the author
Nick, Co-Founder of Pear Tree, leads sales, partnerships and business development. Pear Tree connects Australian and New Zealand businesses directly with vetted offshore professionals from the Philippines and South Africa, with no agency middleman.
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