DO 206-19.
Sec. 1. Coverage. - This rule shall apply to all establishments collecting service charges such as
hotels, restaurants and other similar establishments including those entities operating primarily as
private subsidiaries of the government.
Sec. 2. Definition of terms. - As used in this Rule, the following terms are defined as follows:
a. Covered employees refer to all employees , except managerial employees as defined
herein, under the direct employee of the covered establishment, regardless of their
positions, designations or employment status, and irrespective of the method by which
their wages are paid.
b. Covered establishments refer to those that collect service charge for work or service
they offer.
c. Managerial employees refer to any person vested 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.
d. Other similar establishments refer to those entities that collect service charge for work
or service rendered, such as, but not limited to, lodging houses, night clubs, cocktail
lounges, massage clinics, bars, casinos and gambling houses, and sports clubs .
e. Service charge refers to the amount that is added to the bill for work or service
rendered.
LC 96 as amended by DO 206-19
Sec. 3. Distribution of service charges. - All service charges actually collected by covered
establishments shall be distributed completely and equally, based on actual hours or days of work
or service rendered, among the covered employees, including those already receiving the benefit
of sharing in the service charges .
Sec. 4. Frequency of distribution. - The shares referred to herein shall be distributed and paid to
the covered employees not less than once every two (2) weeks for twice a month at intervals not
exceeding sixteen (16) days.
DO 206-19. Sec. 6. Dispute resolution. - Any dispute or difference on the distribution of service
charges shall be settled through the grievance machinery as provided in the Collective Bargaining
Agreement (CBA). In unorganized establishments, where no grievance mechanism is established or the grievance
mechanism is inadequate, the grievance shall be referred to the DOLE Regional Office which has
jurisdiction over the workplace, for conciliation.
Unresolved grievances shall be resolved in accordance with existing rules and regulations on the
visitorial and enforcement power of the Secretary of Labor and Employment and his/her duly
authorized representatives.
DO 206-19
Sec. 5. Increase in minimum wage. - In the event that the minimum is increased by law or wage
order, service charges paid to the covered employees shall not be considered in determining the
covered establishment’s compliance with the increased minimum wage.