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Models
Managed employment
Managed employment is the split where a Philippine company holds the contract, payroll, and statutory filings while the U.S. company holds the work. The worker has one legal employer in the Philippines and one.
Also called managed paper
How it works
Three files have to exist on day one: an employment contract between the worker and the Philippine company; a client agreement that says who directs tasks and who pays the invoice; a start date both sides can plan around. Payroll runs in pesos on a cycle no longer than sixteen days. The local employer withholds employee shares, adds employer shares, accrues thirteenth month, and invoices a loaded number plus a fee. You approve hours and performance. You do not un-employ someone by closing a Slack account. You tell the local employer to run a lawful exit. If those two clocks stop talking, the worker is still employed while instructions vanish.
Example: an operations coordinator at ₱55,000 basic. The local employer remits SSS, PhilHealth, and Pag-IBIG, accrues ₱4,583 a month toward December, and charges $350 for the paper. You assign the close calendar. Fire them only in Slack on Friday and tell the local employer on Tuesday, and you have a person still on contract with no work and a messy final-pay clock.
How it differs
Direct hire puts the contract on your entity. EOR is one legal form of managed employment. A U.S. PEO cannot file as the employer here if you are not registered. Body leasing is a supplier of people with no real HR. DO 174-17 is the rule that turns that supplier into your problem.
Common errors
Calling a monthly invoice managed employment when the invoice is the only document. Skipping twin-notice because the U.S. manager already decided. Letting two affiliates each think the other is the employer.