Service Charge

All service charges collected by hotels, restaurants, and similar establishments[1] (the “covered employers”) are required to be distributed at the rate of 85% for all covered employees who will equally share therein, and 15% goes to management who shall apply it to losses and breakages, and, if so decided, for distribution to employees receiving more than Php2,000.00/month.[2]

Except managerial employees, service charge applies to all employees of covered employers, regardless of the employees’ position, designation or employment status, and irrespective of the method by which their wages are paid.[3]

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