Recruitment agencies violating placement fee policies face penalty - POEA

Administrator Hans Leo J. Cacdac yesterday said the POEA will cancel the license .of recruitment agencies found collecting excessive placement fees from applicants or charging placement fees from workers seeking employment in countries which have laws that prohibit the same.

Cacdac also advised Filipino jobseekers to pay the placement fee only if they have signed an employment contract and a receipt corresponding to the amount paid is issued to them, and to avoid licensed recruiters that continue to defy the government’s placement fee policy which is clearly defined in various promulgations.

DOLE Department Order No. 34, Series of 1996, POEA Governing Board Resolution No. 2,
series of 1998, and POEA Memorandum Circular No. 14, Series of 1999 authorize a
recruitment agency to collect from its hired workers “an amount equivalent to one month salary, exclusive of documentation and processing costs”.

Section 2 b, Rule 1, Part 6 of the 2002 POEA Rules and Regulations prohibits “charging or accepting directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary, or making a worker pay any amount greater than that actually received by him as a loan or advance.”

Cacdac said there is total prohibition on charging placement fees from Filipino household service workers, seafarers, and workers for deployment to countries which disallows placement fee collection.

Charging placement fees from Filipino household service workers is prohibited under POEA Governing Board Resolution No. 6, Series of 2006.

Section 2 c, Rule 1, Part 6 of the POEA Rules defines as a recruitment violation any act of “charging or collecting placement fee for deployment to countries where the prevailing system, either by law, policy or practice, do not allow the charging or collection of placement and recruitment fees”. The POEA Rules also exempt seafarers from paying placement fees.

Countries like United Kingdom, Ireland, Norway, and the Netherlands do not allow the collection of placement fee by recruitment agencies from foreign workers because the employer is paying the cost of placement and recruitment services.

The prohibition is also applicable to agencies that are deploying workers to the Canada provinces of Manitoba, Saskatchewan, Alberta, and British Columbia.

Cacdac said that hiring of foreign workers in occupations that usually require a high school diploma or a maximum of 2 years of job-specific training (level C and D) under the Pilot Project of the Government of Canada is also covered by the prohibition on collection of placement fee. Under the prevailing policy of the Canada government, employers shall cover all recruitment costs related to the hiring of foreign workers.

The ‘no placement fee’ policy also covers agencies deploying workers to the U.S.A., including Guam, Cacdac said.

POEA Memorandum Circular No.10, Series of 2009 orders that licensed recruitment agencies recruiting Filipino workers under the H2B program for the United States, including Guam, are strictly prohibited from charging any placement and recruitment fees from Filipino workers bound for these destinations.

The United States’ Department of Homeland Security on 18 January 2009, has implemented regulatory changes to the H2B visa classification used for foreign workers seeking employment in the United States and Guam. Under the new rules, the cost of recruitment of these workers must be borne by employers and the charging or collection of placement fee by an employer, agent, facilitator, recruiter or similar employment service provider from workers under the H2B visa category or temporary skilled labor is illegal.

Cacdac said violation of the "no placement fee" policy is a serious administrative offense with a penalty of cancellation of license under Section 1-A (5) of Rule IV, Part VI of the POEA Rules and Regulations Governing the Recruitment and Employment of Land based Workers.

Cacdac further urged applicants to report to POEA any recruitment agency that charges excessive placement fees or collect fees which are not sanctioned by other countries.

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