Labor-only contracting

How it works

DO 174-17 implements Labor Code Articles 106 to 109. Labor-only contracting is present when the contractor lacks substantial capital or investment and the workers perform activities directly related to the principal’s business, or when the contractor has no control over the means and methods of the work. Registration with DOLE is a plus. It is not a shield if the facts are a cabo. Endo-style five-month loops live in the same neighborhood. For a U.S. buyer the practical tell is a vendor that cannot show its own payroll, its own supervisors, and its own remittances in its own name.

Example: a ‘staffing partner’ invoices $1,900 a month for a support agent, has no paid-up capital you can verify, and lets your U.S. manager set every script and schedule. A complaint later treats you as the employer. Back wages, benefits, and regularization arguments attach to you, not to the empty vendor.

How it differs

Legitimate job contracting is the allowed version: real capital, real control, a service agreement for a defined job. An EOR that actually employs can be on the right side of this line. Body leasing is the street name for the wrong side.

Common errors

Believing a DOLE certificate ends the analysis. Splitting the worker across three affiliates so nobody looks like the principal. Using five-month contracts to dodge regularization.