Placement Fee Questions for OFWs

One of the main concerns of many Filipinos who wish to work is money. That’s because applying for a job, unlike for local companies, involves payment of a middleman, more commonly called an employment/recruitment agency. While the stipulated placement fee, the amount an applicant needs to pay to an agency, should be just the equivalent of a month’s worth of salary (excluding documentation and processing costs), this ruling is seldom followed.

So we decided to put a list of commonly asked questions for those who are planning to go abroad but are uncertain of how much, financially, such a decision is going to cost.

What is a placement fee?

A placement fee refers to the amount of money charged by an agent or a recruitment agency to workers seeking employment overseas. This fee is paid by the worker to the recruiter as compensation for the agency’s services in finding and facilitating employment.

In the Philippines, the recruitment and deployment of overseas Filipino workers are regulated by the Department of Migrant Workers (DMW), which sets guidelines and regulations on the collection of placement fees.

According to DMW rules, recruitment agencies are allowed to collect placement fees from workers equivalent to one month’s salary or based on the employment contract. The fees should not exceed this amount, and they should be collected only after the worker has been formally offered a job and has signed a valid employment contract. The fees should also be transparently stated in the employment contract.

How much should a placement fee be?

The amount of a placement fee in the Philippines varies depending on the type of employment and the destination country.

In general, the placement fee should not exceed the amount equivalent to one month’s salary of the overseas worker, as stated in the guidelines of the DMW. However, the DMW may also allow for the charging of additional fees or deductions for allowable expenses such as medical examinations, visa fees, and other processing fees.

The collection of placement fees by recruitment agencies is regulated by the DMW to prevent illegal recruitment, fraudulent schemes, and excessive fees that may exploit OFWs. Workers are advised to be vigilant and to verify the legitimacy of the recruitment agency and the job offer before agreeing to pay any fees.

Before signing an employment contract, workers should review and understand the terms and conditions, including the fees and charges to be paid, as well as the benefits, terms of employment, and working conditions. If there are any doubts or questions about the placement fees, workers should consult with the DMW or seek the assistance of a reputable labor lawyer or migrant rights organization.

When should a job applicant pay the placement fee?

In accordance with DMW guidelines, an applicant should only pay the placement fee once he or she has been formally offered a job and has signed a valid employment contract.

Applicants should carefully review the terms and conditions of the employment contract before paying any fees, including the fees and charges to be paid, as well as the benefits, terms of employment, and working conditions. In addition, the contract should clearly state the fees.

An agency must provide a detailed breakdown of the placement fee to the worker, including any allowable expenses, such as medical examinations, visa fees, and other processing fees. Overseas workers should not be charged more than one month’s salary in placement fees.

Applicants should verify the legitimacy of the recruitment agency and the job offer before agreeing to pay any fees. It is also important for them to be aware of illegal recruitment practices or fraudulent schemes which may require them to pay a fee upfront or promise unrealistic employment opportunities.

If a job applicant encounters any issues regarding the placement fee or the recruitment process, they may contact the DMW or consult a labor lawyer or migrant rights organization.

Why some OFWs don’t need to pay a placement fee?

Some OFWs are able to work abroad without paying a placement fee because they are directly hired by their foreign employer, rather than going through a recruitment agency.

In these cases, the foreign employer takes on the responsibility of recruiting and hiring the worker directly, without the involvement of a third-party recruitment agency. Since there is no recruitment agency involved, there is no placement fee to be paid by the worker.

Direct hiring is allowed by the DMW as an alternative to going through a recruitment agency, but it is subject to certain requirements and regulations. The DMW requires that the foreign employer must be accredited by the DMW or by the Philippine embassy in the foreign country and that the employment contract should be verified and authenticated by the DMW or the Philippine embassy.

Direct hiring is typically done for skilled workers, professionals, or those who have a previous work relationship with a foreign employer. However, it’s important for OFWs to be cautious and to verify the legitimacy of the foreign employer and job offer before accepting a direct hiring arrangement, to avoid falling prey to illegal recruitment practices or fraudulent schemes.

Which countries do not charge placement fee?

There is no definitive list of countries that do not charge placement fees to Filipino workers, as this can vary depending on the specific industry and job placement agency. However, some countries have laws or regulations that prohibit or restrict the charging of placement fees to migrant workers, including Filipino workers:

• United States
• Canada
• United Kingdom
• Australia
• New Zealand

While these countries may have regulations in place to prevent the charging of placement fees, some agencies or recruiters may still try to charge workers under the table or through other means. It is always advisable for workers to research and carefully vet any job placement agencies or recruiters before signing any contracts or paying any fees.

Who is exempted from paying placement fees?

Under the POEA guidelines, certain categories of overseas Filipino workers (OFWs) are exempted from paying placement fees. These include:

Government-hired workers

OFWs hired by government-to-government agreements or by international organizations are exempted from paying placement fees.

Skilled workers and professionals

OFWs hired for highly skilled positions, such as managers, supervisors, engineers, architects, teachers, and healthcare professionals, are exempted from paying placement fees.

Household service workers

OFWs hired as domestic workers, such as household service workers, caregivers, and personal assistants, are exempted from paying placement fees.

Seafarers

OFWs employed in the maritime industry, such as seafarers and crew members, are exempted from paying placement fees.

Workers hired through government placement agencies

OFWs hired through government placement agencies, such as the Philippine Overseas Labor Offices (POLO) or the Overseas Workers Welfare Administration (OWWA), are exempted from paying placement fees.

Jobs Abroad for Filipinos

Aside from placement fees, what other fees do Filipino applicants for work abroad have to pay?

An applicant is required to shoulder the payment for the following requirements:

1. Passport application/renewal
2. NBI/Barangay/Police Clearance
3. Authentication
4. Birth Certificate
5. Medicare/Philhealth
6. Immunization (if required by the host country)
7. Medical Certificate

What are the fees that employers should shoulder (not the Filipino applicant)?

The fees for the following must be paid by the employer:

1. Working visa
2. Air ticket
3. OWWA Membership Fee
4. POEA Processing Fees

What are the fees that OFWs are exempted from paying?

OFWs are exempted from paying airport fees and travel tax when they depart for work abroad. They just need to present Overseas Employment Certificate (OEC) or any other documents from DMW to avail of this privilege.