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Direct hire (Philippines)
Direct hire (Philippines) is the model where the U.S. company is the employer the worker reports to on paper, not only in Slack. The person is on your payroll, in your handbook, on your devices. A recruiter may have.
Also called own payroll hire, client-employed PH hire
For a company that already has a Philippine corporation - SEC papers, BIR, mayor’s permit, employer numbers at SSS, PhilHealth, and Pag-IBIG - this is the ordinary way to hire. For a Delaware C-corp with no local entity, “direct hire” usually means one of two messy things: paying a Filipino as a contractor and hoping the four-fold test never shows up, or running U.S. payroll for a person who lives and works in Quezon City. Both can look simple in month one.
How it works
If you are a Philippine employer, you issue a local employment contract, set a probationary period no longer than six months, remit statutory contributions, accrue 13th month, and keep time records. Hours, night differential, and holiday premiums follow the Labor Code even if the boss is in Austin.
If you are not a Philippine employer and you still want the person “on our team,” you need a path that creates a real employer somewhere. That path is an EOR, or you build the entity. Entity setup is months, not a weekend, and foreign-owned domestic market enterprises carry paid-up capital rules that EOR marketing pages quote in the $100,000-$200,000 range. Direct hire does not skip that. It assumes it is already done.
Example: 701am’s Dawn Hire pattern is search plus a one-time fee. You meet three people. You employ the one you pick. The replacement clock is commercial - ninety days, one restaff - and is not a substitute for Article 296 probation. You can end the commercial relationship with the recruiter and still owe the worker a lawful exit if they are already on a Philippine contract you signed through an affiliate.
How it differs
EOR: they are employed by the local company. You buy the work. Direct hire: you are the employer, or you are pretending to be and taking the risk. A placement fee is consideration for a search. It is not wages. Paying the fee does not make the recruiter the employer, and refusing the fee does not make a contractor relationship safe.
Common errors
Putting a Manila resident on Gusto as a U.S. W-2 and calling it done. Withholding U.S. FICA does not remit SSS. Using a 90-day product guarantee as the only probation language. The Labor Code clock is six months and it starts on the first day of actual work. Writing “contractor” on a monthly invoice while you set the hours, the tools, and the script. That is misclassification with extra steps.