Some news reports say that the new Kasambahay Law (Republic Act 10361, “An Act Instituting Policies for the Protection and Welfare of Domestic Workers” was signed into law on 18 January 2013) will have the unintended consequence of making many people unemployed. Families who could not afford to pay P 2500/month (in Metro Manila) to their kasambahays are expected to lay them off en masse.
Let us take a closer look at this supposed effect.
There are two kinds of families who pay their kasambahays too little. First, there are those whose income is high enough, but who pay their kasambahays too little because they think that is all they deserve. These families would be forced to pay a decent living wage to their kasambahays. They may have to forego some very minor luxuries to do this.
Then, there are the families whose income is barely enough to support the family plus a kasambahay. If such families cannot afford to pay P2500/month to a kasambahay, they should simply not hire one. Very often, such families do not objectively need a kasambahay. They could easily divide household tasks among the members of the family.
For these families, having a kasambahay is more a matter of prestige than an objective need. They want to underline the fact that their social status has risen by having a kasambahay. Family members then think it would be beneath them to do household chores. But when they do hire a kasambahay, they could not afford to pay them properly, and the working conditions would often be bad (e.g. cramped sleeping quarters, bad food, long work hours).
When a family hires a kasambahay they are making a choice not to spend for some other things instead. Rationally, a family would hire a kasambahay when it is able to become more productive (and thus earn more money) as a result. This is the case when both partners work. But hiring a kasambahay may not always be the optimum solution. There are (theoretically) other choices open to them.
If they need help in specific tasks e.g. cooking, laundry, gardening, cleaning or taking care of children, there are options other than hiring a live-in kasambahay. Cooking could be done by sharing the task among all household members, or they could bring home cooked food. Children could go to day-care centers, and a good schedule of play-dates could be made for the other days. They could hire a labandera to come once a week, or bring their clothes to a laundry service; they could hire someone to clean the house or to work the garden once a week. These steps would probably be cheaper than hiring a live-in kasambahay.
The main beneficiaries of the kasambahay arrangement are the families who employ them. The kasambahays also benefit, but only if they are paid properly and have decent working conditions. Overall welfare is not enhanced by allowing sub-standard payment and working conditions of kasambahays.
The Kasambahay Law imposes added financial and legal requirements for employers. But will it result in massive lay-offs of kasambahays? This is most unlikely. The majority of employers can afford to pay the required wages. The minimum wage of 2500 pesos is only for kasambahays in Metro Manila; it is 2000 pesos for other chartered cities and first-class municipalities, and only 1500 pesos for everywhere else. Most families already pay as much to their kasambahays; and those who don’t will probably only have to pay a little more to comply.
Employers will have more of a problem with the other requirements. Kasambahays need to be registered with the SSS, PhilHealth and Pag-Ibig, and the employers will need to make the monthly payments. The kasambahays need to be registered with the local barangays. The kasambahays must have a minimum of 8 hours of rest a day, and 24 hours off a week; they will have five days of annual leave with pay. Also, hiring children younger than 15 years old is prohibited.
A written contract will have to be accomplished, there is a list of valid reasons allowed for termination, employers should respect the kasambahay’s privacy. For their part, the kasambahay is now required to keep all information about the employers family confidential, even after their work with them is over.
All this means that employers’ relationship with their kasambahay will have to change.
The main ‘problem’ with the Kasambahay Law is not economic, but cultural. Filipinos are not yet used to treating their kasambahays as full fledged workers. It will take some years before people will have made the cultural adjustment.
Very few kasambahays presently employed will be laid off. There would probably be a shift from recruiting kasambahays from afar, to those coming from nearby.
In addition to its being a worker welfare law, the Kasambahay Law is a law that will foster Philippine national development. It will increase the cash that kasambahays receive, since: it bans delayed payment or payment in kind; deployment expenses will be shouldered by the employers; agencies will be prohibited from taking a part of the kasambahay’s salary. This increased cash would have multiplier effects when it is remitted to their home towns.
The law promotes the integration of kasambahays in the urban labor force. It will help make being a kasambahay a steppingstone to other jobs.
The rationalization of domestic labor that the law brings will gradually transform Philippine society. Domestic workers will eventually be hired only by families which can afford them AND really need them. Others would then be hired only for specific tasks, and this will streamline the labor market. More young girls would then go to high school in their hometowns instead of becoming kasambahays in the big cities. And many of those now working as kasambahays will pursue an education. This will come at a time when the country has an increasing need for educated workers, for which there is an impending shortage.