All service charges must go to hotel and restaurant employees, a new law states

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President Rodrigo Duterte on August 7 signed a law amending the Labor Code which now requires establishments such as hotels and restaurants to give 100% of service charges to its workers, except managerial employees.

Metro Manila (CNN Philippines, August 13) — Your tips will now surely end up in the pockets of waiters and servers.

President Rodrigo Duterte on August 7 signed a law amending the Labor Code which now requires establishments such as hotels and restaurants to give 100% of service charges to its workers, except managerial employees.

Managerial employees are workers "with powers or prerogatives to lay down and execute management policies or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or to effectively recommend such managerial actions."

The former version of the Labor Code states that service charges collected by hotels, restaurants and other establishments should be distributed at a rate of 85% to covered employees and 15% to the management staff.

Senator Joel Villanueva, who authored the measure, lauded its signing.

"The law allows our frontline service workers to enjoy the fruits of their labor, the reward for providing good, quality service," Villanueva said in a statement.

Villanueva cited data from the Department of Labor and Employment showing that 157 companies violate the regulations on service charges under the current Labor Code.

The senator added that despite a compliance rate of 99.65%, DOLE admitted it did not examine whether the full 85% was handed over to employees.