Can employers charge applicants or employees?

1) What a “pre-employment medical exam” is (and why employers ask for it)

A pre-employment medical exam (PEME) is a health assessment an employer requires (or strongly prefers) before hiring, usually to determine whether an applicant is fit to perform the job safely and to establish a baseline for occupational health monitoring. It often includes a physical exam, labs (CBC/urinalysis), chest X-ray, and sometimes drug testing, audiometry, or other tests depending on the role.

In practice, PEME is used for three overlapping purposes:

Fitness-for-work screening (can the person do the essential job functions?)
Occupational safety and health (OSH) baseline (especially for hazard-exposed work)
Risk management/insurance/HMO enrollment (health plan underwriting or benefit enrollment)

Those purposes matter, because who should pay often turns on whether the exam is mainly an employer OSH compliance/business requirement versus a general documentary requirement the applicant obtains independently.

2) The legal landscape: what laws are relevant

There isn’t a single Philippine statute that says, in one sentence, “Peme cost must be paid by X in all cases.” Instead, the answer comes from several legal principles working together:

A. Occupational Safety and Health rules (employer responsibility)

Philippine OSH policy—anchored in the OSH law (RA 11058) and its implementing rules, together with the Occupational Safety and Health Standards—treats required OSH measures as employer obligations. Where medical examinations are required as part of occupational health services (e.g., baseline/periodic exams for hazard-exposed employees), the cost is generally understood to be for the employer’s account, not shifted to workers.

Key idea: If the exam is part of what the employer must provide to keep the workplace safe, passing the bill to employees is risky and often inconsistent with OSH policy.

B. Labor standards on wage deductions (limits on charging employees)

Once a person is already an employee, an employer cannot simply “charge” them by deducting from wages unless the deduction fits labor standards rules (e.g., authorized deductions, with proper written authorization when needed, and not violating minimum wage and other protections). Unauthorized or coercive deductions may be illegal.

Key idea: Even if an employee “agrees,” the agreement must be real and compliant; deductions that effectively shift business costs can be challenged.

C. Privacy and sensitive medical data (Data Privacy Act)

Medical information is sensitive personal information. Employers collecting PEME results must have a lawful basis, observe proportionality (only what’s necessary), secure the data, limit access, and avoid unnecessary disclosure.

Key idea: Cost aside, employers must handle PEME results carefully; misuse can create separate liability.

D. Anti-discrimination and job-relatedness

PEME practices can violate laws and constitutional principles if used to discriminate (e.g., against persons with disabilities, older applicants, or people living with HIV). Medical exams should be job-related and consistent with the requirements of the role, and employers should focus on whether the applicant can perform the essential functions, with reasonable accommodation when required.

Key idea: Even a “free” PEME can be illegal if used as a tool for improper exclusion.

3) The practical “who pays” rules (Philippine context)

A. Can employers require a PEME at all?

Yes—employers may require medical clearance so long as it’s reasonable, job-related, and compliant with OSH, privacy, and anti-discrimination rules.

B. Can employers charge the applicant for a PEME?

The realistic answer: Sometimes they do, but it’s a gray area—and the safer/legal-risk-minimizing practice is employer-paid or reimbursed.

Because an applicant is not yet an employee, some companies treat PEME as a pre-hiring requirement and ask applicants to shoulder it. This is common in the market. However, it can become legally and ethically problematic when:

The employer mandates a specific clinic/provider and requires the applicant to pay that provider (especially if there are commissions/kickbacks or inflated pricing issues).
The PEME is effectively an employer business expense being shifted to applicants as a condition to be considered/hired.
The required tests go beyond what is job-related or necessary.
The practice is applied in a way that is unfair, coercive, or discriminatory.

A more defensible setup (if applicant initially pays)

If an employer asks an applicant to pay up front, best practice is:

Make it clear in writing whether the PEME is required before or only after a conditional job offer.
Provide reimbursement upon hiring (or after a certain onboarding milestone).
Allow the applicant to choose among accredited clinics rather than forcing a single provider—unless there is a strong, legitimate reason.

Bottom line (applicants): Not every instance of applicant-paid PEME is automatically illegal, but it carries risk—especially if it looks like the employer is offloading a mandatory business/OSH cost onto applicants.

C. Can employers charge the employee for a PEME?

Generally: No, not for employer-required medical exams related to employment/OSH.

Once the worker is an employee, PEME (and similar required medical exams) increasingly looks like an employer cost of doing business, especially when tied to:

baseline exams for hazard exposure,
periodic health monitoring,
return-to-work/fitness-for-duty assessments required by the employer,
compliance with workplace OSH programs.

Charging an employee directly—or deducting it from wages—creates exposure under:

OSH obligations (employer-provided occupational health services), and/or
labor standards rules on unlawful deductions.

Bottom line (employees): If the exam is required by the employer for employment purposes, it is strongly safer—and often expected under OSH principles—that the employer shoulders the cost.

4) Salary deductions: “We’ll pay, but we’ll deduct it later.”

Employers sometimes pay the clinic and then deduct the cost from the employee’s salary in installments.

This is a common compliance trap. Deductions may be challenged if they are:

not authorized under labor standards rules,
not supported by a valid written authorization where required,
coercive (e.g., “sign or you don’t get hired/regularized”),
or effectively shift an employer obligation to the worker.

Even when an employee signs a document, the deduction can still be questioned if it undermines statutory protections or minimum labor standards.

Practical takeaway: If the employer requires the medical exam as a condition of employment, deducting the cost from wages is high-risk.

5) Special scenarios you should know

A. Drug testing in hiring/employment

Some roles and workplaces implement drug testing as part of workplace policy and national drug-control rules. In practice, applicants are often asked to shoulder pre-employment drug test costs. Legally, the same themes apply:

If it’s an employer requirement for hiring, shifting cost to applicants is common but can be controversial.
If it’s imposed on employees, deductions/charging should be carefully assessed under labor standards and OSH principles.

B. Food handlers / health certificates (LGU practice)

In food service and some public-facing roles, local health certificates or sanitary permits may be required under local ordinances. Often, workers obtain these and pay related fees. Many employers choose to reimburse because the requirement is tied to the job.

C. Contractors, manpower agencies, and “you must pay fees to get deployed”

If a third-party contractor/agency requires workers to pay “medical fees” as a condition for placement or deployment, the legality depends heavily on the setup. Where fees resemble prohibited recruitment/placement charges or unfair exactions, the arrangement is riskier. (This is especially sensitive in overseas recruitment, where fee regulation is stricter.)

D. Government employment

In some government hiring processes, medical certificates are part of documentary requirements. Applicants often shoulder the cost as part of completing appointment requirements, though agencies may have their own medical facilities or policies.

6) Privacy, consent, and handling PEME results (often overlooked)

Even if the employer pays, PEME handling must still be lawful:

Collect only what is necessary for job fitness and OSH.
Limit access to HR/medical professionals on a need-to-know basis.
Store securely; set retention schedules.
Avoid disclosing diagnoses to supervisors when a “fit/not fit with restrictions” certification suffices.
Don’t use PEME results to discriminate unlawfully.

A good compliance approach is to require the clinic to issue:

a fitness certification (fit / fit with restrictions / unfit), and
keep detailed diagnostic results with the medical provider unless strictly necessary.

7) When PEME practices become legally risky (red flags)

“Pay this PEME fee to our chosen clinic or you’re not considered.”
PEME requirements that seem unrelated to the job (overbroad tests).
Automatic rejection due to disability/medical condition without considering the job’s essential functions or reasonable accommodation.
Requiring pregnancy tests or using pregnancy status to deny hiring (high discrimination risk).
Sharing applicant medical details widely inside the company.
Deducting PEME costs from wages without a clear lawful basis.

8) Remedies and where issues are commonly raised

Depending on the problem, workers/applicants typically raise concerns with:

DOLE (labor standards/OSH compliance; unlawful deductions; workplace safety complaints),
NLRC (employment disputes that mature into cases, depending on the nature of the claim),
National Privacy Commission (privacy violations involving sensitive medical data),
and other appropriate agencies depending on the sector (e.g., public sector processes, overseas recruitment rules).

9) Practical templates (policy-level guidance)

For employers (low-risk policy):

Require PEME only after a conditional offer.
Employer pays the accredited clinic directly or reimburses upon onboarding.
Use job-related medical standards; document why tests are required.
Clinic provides “fit/fit with restrictions/unfit” to HR; detailed records remain confidential.
Written privacy notices and data handling protocols.

For applicants/employees (protect yourself):

Ask whether the PEME is reimbursable and get it in writing.
Keep official receipts and results.
If asked to sign a deduction authorization, read carefully; understand whether it’s truly voluntary and lawful.
If you feel singled out due to a condition, document communications and request the basis for the decision.

Bottom line

Employees: If the medical exam is employer-required for employment/OSH purposes, the legally safer and commonly expected rule is employer pays, and charging employees (especially via wage deductions) is high-risk.
Applicants: Applicant-paid PEME exists in practice, but it becomes legally and ethically risky when it functions as a shifted employer cost, is tied to a forced provider arrangement, or is applied unfairly/discriminatorily. Employer-paid or reimbursed PEME is the safer approach.

If you want, I can also provide (1) a sample PEME reimbursement clause and (2) a sample privacy notice language employers can attach to PEME instructions.