The Department of Labor and Employment (DOLE) has updated the guidelines for Alien Employment Permits (AEP) through Department Order (DO) No. 248 and its supplemental addendum DO 248-A-25 to facilitate the easier and faster hiring of foreign workers while protecting Filipino workers’ job opportunities by implementing mandatory skills transfer programs and assessments of economic needs.
What are the key changes under Department Order No. 248 & 248-A-25?
Simplified Process for Applications
- Applications for AEP can now be processed while foreign nationals are still abroad
- The processing time is 15 working days from the day of payment is made for the necessary fees to the respective DOLE Regional Office, and 3 working days for the Certificate of Exemption.
- The filing period is extended from 10 working days to 15 calendar days after the foreign national has signed the contract or appointment.
- Job vacancy publication can now be streamlined to newspapers and be posted in the Public Employment Service Office (PESO), PhilJobnet, and the Job Placement Office (JPO) that has jurisdiction over the workplace for 45 days, from previously being 30 days. According to the supplemental guideline, it is encouraged but not as a precondition for an AEP application and it is done for purposes of labor market testing.
Flexible Renewal Application Process
A major benefit on the part of employers, wherein companies can now submit renewal applications with an Affidavit of Undertaking, promising to complete publication requirements before AEP card release and submit UTP/SDP within 60 days from submission date (if applicable). A special provision was also indicated for AEPs issued before February 10, 2025, renewal applications only needed to submit a training plan instead of full UTP or SDP documentation.
Requirement for Skill Transfer
Companies hiring foreign nationals in priority sectors, fiscal incentives, or are involved in operating public utilities, must now implement either an:
- Understudy Training Program (UTP) – the foreign nationals must train at least two regular Filipino employees in the company who are subject to the next-in-rank positions
- Skills Development Program – Technology and skills transfer must be made to at least two regular rank-and-file Filipino workers per foreign national.
With the provisions of the supplemental guidelines, the mandatory UTP/SDP specifically applies to covered establishments which are:
- Foreign Investment Act-registered establishments that enjoys fiscal incentives
- Public utilities or Operators of Critical Infrastructure under the Public Service Act
- Strategic Investments as identified in the Strategic Investment Priority Plan (SIPP)
On the other hand, there were exemptions for foreign nationals in requiring skills transfer programs and it includes
- Foreign nationals already exempted from AEP
- Shareholders or Investors with participation as recorded by the SEC
- Positions determined as exempt by the Technical Working Group based on established criterion
Technical Working Groups were established to ensure implementation and to effectively do oversight regarding UTP/SDP evaluation and also for the Economic Needs Test.
The New Economic Need Test
Before granting such permits, DOLE must first examine whether there is an actual shortage of qualified Filipinos in a certain field in which the foreign worker will be employed. The authorities will assess if local workers can be trained within an acceptable timeframe to encourage more local workers rather than bringing in foreigners for the position. Additionally, the test considers whether the foreign hiring serves more economic interests, specifically for companies receiving government incentives or operating on critical infrastructures. This depicts a shift from routine paperwork processing to an authentic evaluation of economic necessity.
As addendum, the test now uses a comprehensive labor market information Philippine Statistics Authority, PESO Employment Information System, PhilJobNet data, TESDA and CHED graduate lists, PRC licensure records, Philippine Skills Framework, and data on Hard-to-Fill occupations.
Corporate Officer Exemption
Foreign nationals appointed to Corporate Officer positions as deemed by the company’s Articles of Incorporation, By-laws, or General Information sheet and certified by the corporate secretary are exempt from publication requirements, which drastically lessens the time for processing.
Mandatory Acquisition for Certificate of Exemption
Foreign nationals who qualify for exemptions in application for AEPs, such as those for diplomatic staff, personnel of international organizations, permanent residents and those enumerated under Rule 5 Section 1 of the Department Order 248-25, are mandated to have a Certificate of Exemption if they intend to work in the Philippines.
Expanded Prohibited Acts
Under the new Department Order, it now includes prohibition to:
- Misrepresentation, fraud, or falsified statements in the application
- Any other acts that will justify the revocation of AEP
- Deliberate or willful non-compliance to the newly implemented regulations
Fees and Penalties
The consequences for violations have become substantially more severe, which are the following
- Both the company and the foreign national can face up to fines of ₱10,000 for each prohibited act
- Prolonged disqualification periods, such as a 5-year ban from the AEP system if found guilty of Fraud or Misrepresentation, and a 10-year ban for deliberate non-compliance and for committing an act constituting revocation of AEP
What this Means
For Employers
The new regulations deliver substantial benefits for businesses seeking foreign skills or talent. Companies can now expect much faster and more cost-efficient processing for AEP, with a clearer outline of requirements that eliminates the confusion or ambiguities of the previous rules. Also, streamlined procedures offer a reduction in delays, and those businesses that operate in the priority investment sectors receive further support in facilitating their operations.
Despite the benefits mentioned earlier, the new rule adds significant administrative responsibilities for employers or companies. They must submit quarterly reports about foreign staff and confirm their employment status. In case of any material changes, whether office relocations or duty modifications, they must be reported to DOLE within 10 calendar days. As provided by the supplemental guideline, the following reports should be made:
- Semi-annual reports for AEPs having 1 year validity
- Annual Reports for AEPS having 2-3 years of validity
- Reports must be detailed about implementation, attendance, and competencies gained by Filipino employees
- It must be signed by the employer, foreign national, and Filipino employees.
Further, as companies are required to implement skill transfer programs, they shall submit regular progress updates on their Filipino employees’ development.
For Filipino Workers
With the new Economic Need Test, local employment opportunities are prioritized first rather than just promoting the necessity of foreign workers. This gives a sense of assurance that Filipinos are considered. In addition, they also gain guaranteed access to skills training and development from companies that hire foreign nationals, ensuring that knowledge transfer is not compromised but regularly implemented. These initiatives by the DOLE created pathways for the workforce of Filipinos to acquire the expertise needed to assume roles currently held by foreign employees, which aimed at reducing dependence on foreign labor.
For Foreign Workers
Foreign nationals benefit from a clear and more predictable application process with defined requirements and timelines. The ability to initiate the processing of AEP even if they are abroad reduces uncertainties about relocation and upholds international mobility. These significant changes give direct meaning to the validity of employment contracts and permit approval, clarifying when employment commences and protecting both workers and companies from potential complications due to premature work arrangements.
Summing Up
The updated foreign worker regulations present both opportunities and challenges for businesses operating in the Philippines, ranging from economic needs assessments to mandatory skills transfer programs and stricter compliance requirements. Staying compliant requires strategic planning and expertise.
With the new TWG system, enhanced monitoring requirements, and data-driven Economic Needs Test, employers must ensure their understanding and fulfillment of their duties under the new guidelines.
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You may access here the full document of Department Order No. 248 and the supplemental Department Order No. 248-A
