I. Overview

“Recruitment and placement fees” sit at the heart of Philippine labor and migration regulation. They affect:

Workers seeking jobs locally and abroad
Private recruitment and placement agencies (PRPAs)
Overseas recruitment/manning agencies
Employers (local and foreign)

In Philippine law and policy, the general thrust is worker protection:

Local workers: as a rule, should not be charged placement fees, and agencies are expected to earn from service fees paid by employers.
Overseas Filipino workers (OFWs): historically could be charged limited placement fees, but many categories are now “no placement fee”, especially low-wage and household service workers.

This article walks through the legal framework, allowable and prohibited fees, liabilities, and practical implications.

II. Legal and Regulatory Framework

Several key laws and issuances govern recruitment and placement fees:

Labor Code of the Philippines (Presidential Decree No. 442, as amended)
- Defines recruitment and placement and recruitment fees
- Regulates private recruitment and placement agencies
- Lists prohibited practices like illegal exactions and overcharging
Migrant Workers and Overseas Filipinos Act of 1995
- Republic Act (RA) No. 8042, as amended by RA 10022 and further laws
- Governs overseas employment and the rights of OFWs
- Authorizes the regulation of recruitment fees for overseas deployment
- Provides penalties for illegal recruitment, including excessive fees
Department of Labor and Employment (DOLE) regulations
- Rules on Private Recruitment and Placement Agencies for local employment
- Department Orders on contracting/subcontracting and fee-charging practices
Former POEA Rules (now under the Department of Migrant Workers, DMW)
- Omnibus rules for recruitment and placement of land-based and sea-based OFWs
- Set caps on placement fees, timing of collection, and categories with “no placement fee”
RA No. 11641 (creating the Department of Migrant Workers (DMW))
- Restructured the overseas employment institutional framework
- Transferred POEA’s functions to the DMW, including regulation of recruitment agencies and fees

While specific rule numbers and wording differ across issuances and updates, the core policy direction has remained consistent:

Limit or prohibit charging workers,
Require transparency,
Sanction illegal exactions.

III. Key Concepts

1. Recruitment and Placement

Under the Labor Code, recruitment and placement means any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, advertising for employment, whether for profit or not.

In practice, this covers:

Private employment agencies
Recruitment/referral platforms, if they actually recruit or place workers
Overseas recruitment/manning agencies
Individuals who recruit workers for a fee

2. Recruitment / Placement Fees

Recruitment or placement fees are amounts charged to workers for services related to recruitment and placement, such as:

“Processing fee”
“Documentation fee” (when actually a disguised placement fee)
“Training fee” that is not bona fide and primarily benefits the employer/agency
“Facilitation fee” or “fixing fee”

Important: A fee can still be treated as an unlawful recruitment/placement fee even if labeled differently (e.g., “donation,” “membership fee”) when it is effectively a charge for getting or keeping the job.

IV. Local (Domestic) Employment: Placement Fees

1. Who may do recruitment and placement locally?

DOLE licenses and regulates Private Recruitment and Placement Agencies (PRPAs) for local employment.
Employers may hire workers directly.
Labor contractors/subcontractors are separately regulated under DOLE’s contracting/subcontracting rules.

2. General Rule: No Placement Fee from Local Workers

For local employment, the general policy is:

Workers should not be charged placement fees by PRPAs or contractors.
Agencies are expected to earn from service fees paid by client-employers.

Certain DOLE regulations expressly prohibit agencies from collecting fees from applicants, except possibly for minimal, clearly defined charges (like government-mandated documentation fees that are expressly allowed and supported by receipts). Even then, these charges must not be a hidden “fee to be hired.”

3. Prohibited Practices in Local Recruitment

Under the Labor Code’s prohibitions and related rules, the following are generally prohibited for local recruitment:

Charging or accepting any amount from workers outside what DOLE expressly allows
Excessive or unauthorized documentation/training fees
Withholding personal documents (IDs, diplomas, licenses) to compel payment
Requiring workers to pay “placement fee” or “guarantee deposit” to secure or keep employment
Charging additional fees as a condition for renewal, assignment to a better post, or release of salary

Violations can amount to illegal recruitment and may lead to administrative, civil, and criminal liability.

V. Overseas Employment: Placement Fees

1. Licensing and Regulation

Overseas recruitment is strictly regulated. Traditionally:

The Philippine Overseas Employment Administration (POEA) framed and enforced rules on recruitment fees.
With RA 11641, these powers have been transferred to the Department of Migrant Workers (DMW), but the basic policy structure on fees continues: heavy regulation, caps, and increasing “no placement fee” categories.

Only licensed recruitment/manning agencies may lawfully recruit and deploy workers for overseas employment, and they must comply with the rules on recruitment fees.

2. Allowable Placement Fees (Historical Core Rule)

The long-standing baseline rule in POEA/DMW regulations for land-based OFWs has been:

Agencies may charge a placement fee not exceeding one (1) month basic salary of the worker;
Subject to important exceptions;
Collection is allowed only after:
- The worker has signed the employment contract, and
- The worker has been issued a valid work visa or equivalent documentation.

Even when allowed, agencies must:

Issue official receipts;
Disclose fees clearly in written documentation;
Avoid any hidden or disguised charges.

3. “No Placement Fee” Categories

Over time, the government has strengthened the “no placement fee” policy for many OFWs. Common categories where placement fees are either totally prohibited or heavily restricted include:

Household service workers (HSWs) / domestic workers
Many categories of low- and semi-skilled workers in countries where employers pay all recruitment costs
Cases where host country laws or bilateral agreements require employers—not workers—to shoulder recruitment expenses

For these workers, agencies are typically only allowed to let workers pay:

Government-imposed fees (e.g., passport, NBI clearance, PhilHealth/SSS/Pag-IBIG contributions);
Legitimate medical exams and related clearance;
Skills/competency testing where genuinely required and not inflated;
Provable visa fees, when not shouldered by the employer under law/contract.

Even then, agencies cannot mark up these costs or take a “cut” from these amounts, since that would effectively be a hidden placement fee.

4. Refunds of Placement Fees

In certain situations, agencies must refund placement fees, for example:

If the worker fails to be deployed through no fault of the worker (e.g., visa denied due to employer’s fault, job order cancellation);
If there is a substantial fraud or misrepresentation regarding the job terms;
If the recruitment is later found to be illegal or outside the agency’s authorized job order.

Refunds may be ordered through:

Administrative proceedings before DMW (formerly POEA) or DOLE; and/or
NLRC cases, where placement fees can be claimed as part of money claims or damages.

VI. Prohibited Fees and Illegal Exactions

The Labor Code, the Migrant Workers Act, and implementing rules collectively prohibit a broad range of unlawful fee-related practices, including:

Charging in excess of authorized amounts
- Collecting more than one month’s basic salary where the cap applies
- Charging any placement fee in “no placement fee” categories
Charging unauthorized or disguised fees
- “Training,” “orientation,” or “processing” fees that are really just payment for the job
- “Membership fees,” “ID fees,” “cooperative shares,” or “savings” that workers can’t freely withdraw and that are tied to getting/keeping the job
Charging before the legal point in the process
- Collecting fees before a work visa or employment contract is secured
- Requiring “reservation fees” or “slot fees” just to be lined up for possible deployment
Repeated or continuing exactions
- Periodic deductions from salary beyond what is authorized in the contract or law
- Demanding additional payments to prevent contract termination or to redeploy the worker
Withholding documents or coercive practices
- Holding passports, diplomas, IDs, or ATM cards until workers pay
- Threats of deportation, blacklisting, or non-deployment to force payment

These can constitute illegal recruitment, which in the overseas context is a serious offense. When committed by three or more persons or against three or more workers, they can amount to illegal recruitment in large scale, considered economic sabotage with very heavy penalties.

VII. Wage Deductions and Placement Fees

Under Philippine labor standards:

Deductions from wages are strictly regulated.
An employer (or its agent) cannot simply deduct recruitment or placement fees from wages unless:
- The deduction is authorized by law;
- Or authorized in writing by the worker for a lawful purpose;
- And the deduction does not exceed limits set by law/regulation.

For overseas workers, some rules allow salary deduction for the placement fee (where a placement fee is legally allowed), but only if:

The total does not exceed the cap;
The deductions are properly recorded;
The arrangement is clearly disclosed and consented to by the worker.

If an agency/employer is secretly deducting fees or inflating deductions, these acts may be both:

Violations of labor standards, and
Evidence of illegal recruitment / illegal exactions.

VIII. Liabilities and Remedies

1. Administrative Liabilities

Regulators (DOLE and DMW, among others) may impose:

Suspension or cancellation of license/accreditation of recruitment agencies
Blacklisting of foreign employers/principals
Fines and penalties
Refund/Restitution orders for illegally collected fees

Administrative cases are typically filed with:

DOLE Regional Offices (for local recruitment), or
DMW (formerly POEA) and related bodies (for overseas recruitment).

2. Criminal Liabilities

Illegal fee collection may lead to criminal prosecution, especially when it amounts to illegal recruitment:

Simple illegal recruitment – recruiting without a license or authority, or committing prohibited acts under the law
Illegal recruitment in large scale – committed against three or more workers, considered economic sabotage

Penalties can include substantial imprisonment and fines, and courts may order restitution of placement fees collected.

3. Civil Liabilities

Workers can pursue civil or labor money claims for:

Refund of placement fees
Moral and exemplary damages, in appropriate cases
Unpaid wages, benefits, or other contractual claims

These may be filed before:

The National Labor Relations Commission (NLRC)
Labor Arbiters, in conjunction with illegal recruitment cases
Regular courts, for certain contractual or tort claims depending on the nature of the issue

IX. Special Issues and Practical Questions

1. Are “service fees” the same as placement fees?

No. A service fee is usually a payment by the employer to the recruitment agency for its services. In principle, this is not charged to the worker.

However, if the agency makes the worker indirectly shoulder the service fee by:

Charging the worker a higher “documentation fee” that mirrors the service fee; or
Deducting from wages amounts that are actually the agency’s service fee;

then it may be treated as an unlawful recruitment fee in substance.

2. Can agencies charge for training?

Agencies and training centers may charge for genuine, bona fide training that:

Is not a precondition to getting the job unless mandated by law/host country or clearly part of a skills requirement;
Reflects a reasonable market cost;
Is not inflated or used to profit from the worker’s desperation for employment.

If the “training” is compulsory, overpriced, or clearly a disguised placement fee, it can fall under prohibited fees.

3. Can workers voluntarily “donate” to the agency?

If a “donation” or “contribution” is:

Given in connection with obtaining employment, and
Especially if requested or suggested by the agency,

it is very likely to be treated as a recruitment/placement fee, even if labeled differently. The law looks at the substance, not just the label.

4. Role of host country laws

Host country laws and bilateral agreements sometimes:

Prohibit charging workers any recruitment costs;
Require employers to shoulder all recruitment and placement expenses.

Philippine policy generally aligns with or exceeds these protections; thus:

Even if the agency claims “allowed kami sa abroad law,” it must still comply with Philippine law and regulations, which may be stricter.

X. Practical Guidance (From a Legal Perspective)

For Workers

Be cautious of anyone asking for:
- Upfront payments to “reserve a slot”
- Unofficial payments (“cash lang, walang resibo”)
- Payments beyond one month’s salary (for categories where fees are allowed)
- Placement fees for jobs that are supposed to be “no placement fee”
Insist on:
- Official receipts for any payment
- A written employment contract and clear breakdown of any costs
- Verification that the agency is properly licensed
If you suspect illegal fees:
- Keep evidence (receipts, messages, contracts)
- Consider filing a complaint with DOLE, DMW, or appropriate authorities
- Seek help from legal aid groups, public attorneys, or migrant organizations

For Agencies and Employers

Assume that charging workers is the exception, not the rule, and must be:
- Clearly allowed by current regulations
- Capped and transparent
- Properly receipted and documented
Regularly review:
- Current DMW/DOLE rules on recruitment fees
- “No placement fee” policies by occupation and destination country
- Host country rules and bilateral agreements
Remember that labeling a fee as something else will not shield you from liability if it is, in substance, a recruitment/placement charge.

XI. Final Note (Non-Legal-Advice Disclaimer)

This article provides a general overview of recruitment and placement fees in the Philippine context. Specific rights and obligations can depend on:

The most recent DOLE/DMW regulations
The type of work (local vs overseas, land-based vs sea-based, domestic vs skilled)
The destination country’s law and applicable bilateral agreements
The exact facts of a worker’s situation

For concrete problems—like recovering a placement fee, defending an agency, or structuring compliant fee practices—it's important to consult a Philippine lawyer, DOLE/DMW officers, or qualified legal aid providers who can give advice based on the latest rules and your specific circumstances.