Employment of Non-Resident Aliens in the Philippines under Department Order No. 221-2021

(Revised Rules and Regulations for the Issuance of Alien Employment Permits to Foreign Nationals)

The Department Order No. 221-2021 issued by the Department of Labor and Employment (DOLE) governs the employment of non-resident aliens in the Philippines. It aims to regulate the issuance of Alien Employment Permits (AEPs) and ensure that the employment of foreign nationals is consistent with national laws and policies. Below are the key provisions and principles:

I. Coverage

Who Needs an AEP
Any foreign national seeking to engage in gainful employment in the Philippines must secure an AEP, except those exempted under the order.
Gainful employment includes both physical and digital presence within the country, whether directly or through remote arrangements.
Exemptions
The following are exempt from securing an AEP but must secure a Certificate of Exemption (COE) or Certificate of Exclusion (COX) as applicable:
- Members of the diplomatic corps;
- International organizations staff entitled to privileges and immunities;
- Foreign nationals providing consultancy services for government projects under international agreements;
- Permanent residents under RA 7919 (Alien Social Integration Act of 1995) or EO 324; and
- Others as determined by DOLE.

II. Requirements for Issuance of an AEP

Application Documents
Employers of foreign nationals must submit the following to the DOLE Regional Office:
- Duly accomplished application form;
- Photocopy of the foreign national’s passport (bio page with visa);
- Proof of tax identification number (TIN);
- Employer’s affidavit confirming the necessity of hiring the foreign national and efforts to hire a Filipino first;
- Copy of the employment contract or appointment letter specifying the job, salary, and duration of employment;
- Payment of prescribed fees.
Additional Requirements
- If the employer is a corporation, a valid business permit and proof of SEC registration must be submitted.
- Positions covered by the “regulated professions” must present special permits or licenses from the Philippine Regulatory Commission (PRC).

III. Grounds for Denial of an AEP

An AEP may be denied in the following circumstances:

The foreign national lacks the required skills or qualifications for the position;
The position applied for could be filled by a competent and able Filipino;
The employer has not complied with labor laws, including non-payment of fees or filing incomplete documentation.

IV. Validity and Renewal

Validity Period
- AEPs are valid for the duration of the employment contract or a maximum of three (3) years, whichever is shorter.
Renewal
- Applications for renewal must be filed at least fifteen (15) days before the expiration of the permit, following the same procedures and requirements as the initial application.

V. Fees and Processing Time

Application Fees
- Processing fees for AEPs vary by region and are determined by DOLE.
- Fees are non-refundable, even in cases of denial.
Processing Time
- DOLE is mandated to process and issue AEPs within ten (10) working days from the receipt of complete requirements.

VI. Duties and Obligations of Employers

Labor Market Test (LMT)
Employers must undertake efforts to prioritize Filipino workers by posting job vacancies in a manner prescribed by DOLE for at least fifteen (15) days before hiring a foreign national.
Record-Keeping and Reporting
Employers must maintain records of all foreign nationals employed and submit periodic reports to DOLE on their status and employment.
Transfer or Termination
Employers must report to DOLE any transfer, resignation, or termination of a foreign national within thirty (30) days.

VII. Compliance and Monitoring

Inspections
DOLE Regional Offices conduct random and regular inspections to verify compliance with AEP regulations.
Sanctions for Violations
- Employment of foreign nationals without a valid AEP may result in administrative fines and penalties for both the foreign national and the employer.
- Non-compliant employers risk cancellation of their business permits or licenses.

VIII. Special Rules for Certain Industries

DOLE may impose industry-specific guidelines for the employment of foreign nationals, particularly in sectors requiring technical expertise or innovation. Special consideration is also given to the employment of foreign nationals in the information technology and business process outsourcing (BPO) industries.

IX. Appeals

Appeal Process
Decisions denying or canceling an AEP may be appealed to the DOLE Secretary within ten (10) days of receipt of the decision.
Appeals must be accompanied by supporting evidence and payment of the prescribed fee.
Finality of Decisions
Decisions by the DOLE Secretary are final and executory unless reversed by the courts.

X. Interaction with Other Laws

Immigration Requirements
Foreign nationals must also comply with applicable immigration laws, including securing the appropriate visa type (e.g., 9(g) pre-arranged employment visa).
Regulated Professions
For professions regulated under Philippine laws, foreign nationals must obtain the requisite PRC permits or licenses.

XI. Conclusion

Department Order No. 221-2021 ensures a balance between attracting foreign talent and protecting the rights of Filipino workers. Employers and foreign nationals must comply with all procedural and substantive requirements to lawfully engage in employment relationships in the Philippines.