No-fee policy and ethical recruitment for the Philippines

The Department of Migrant Workers (DMW) operates one of the strictest no-fee-to-worker policies in international labour migration. A Filipino worker accepting an overseas contract pays nothing to the recruitment agency for placement. This is not aspiration. It is a regulatory rule with revocable licences, criminal penalties, and a complaints database that anyone can check. Here is the framework, the enforcement, and the EU buyer-side verification that makes this corridor structurally different from many others.

The legal basis

The no-fee policy sits in three layers of Philippine law.

Migrant Workers and Overseas Filipinos Act of 1995. The founding legislation establishing protections for overseas Filipino workers. Bars placement fees beyond a narrowly defined ceiling for documentary processing.

Republic Act 10022 of 2010. Strengthens the framework with explicit prohibition of placement fees for most destinations and stronger penalties for licensed agencies that breach the rule.

Republic Act 11641 of 2022. Creates the Department of Migrant Workers as a cabinet-level body absorbing POEA's regulatory role. Reinforces no-fee policy as an enforcement priority.

The DMW publishes its policy clearly: for most destinations including the European Union, Filipino workers do not pay placement fees, training fees tied to placement, deposit refunds, or documentation surcharges. The narrow exceptions are paid directly to government agencies (passport, NBI clearance, OWWA membership) and capped at the regulator's rate.

What the international frameworks say

The Philippine policy is not isolated. It mirrors the international ethical recruitment frameworks that EU buyers increasingly use as supplier-compliance benchmarks.

ILO Convention 181 on Private Employment Agencies (1997). Article 7: agencies shall not charge directly or indirectly, in whole or in part, any fees or costs to workers. Limited exceptions permitted only by the competent authority, transparently and in the interest of the workers concerned.

IOM IRIS (International Recruitment Integrity System). Voluntary certification framework operated by the International Organization for Migration. The Employer Pays Principle is the centrepiece: no worker should pay for the job.

Dhaka Principles for Migration with Dignity. Industry-side framework signed by major buyers including Unilever, Coca-Cola, and Adidas. Principle 1: no fees are charged to migrant workers.

UN Guiding Principles on Business and Human Rights. Pillar 2: corporate responsibility to respect human rights. Worker-paid recruitment is a recognised forced-labour indicator under UNGP guidance.

A Filipino corridor operated to DMW rules is, by default, compliant with all four frameworks above. This is one of the structural advantages of the Philippine corridor for an EU buyer with active supplier-compliance obligations.

What the worker can be charged for

The DMW permits three narrowly defined worker-side fees. Each is paid to a government body, not to the agency.

Passport. Standard Philippine passport application fee at the Department of Foreign Affairs. Paid by the worker as a Filipino national, not as a corridor cost.

NBI clearance. Standard police clearance fee at the National Bureau of Investigation. Paid as a citizenship document, not a corridor cost.

OFW e-card and OWWA membership. Small annual administrative fee for the Overseas Filipino Worker e-card and Overseas Workers Welfare Administration membership. Note: the OWWA membership itself (USD 25 per year) is increasingly treated as an employer responsibility under the DMW-standard contract, with the cost reimbursed.

Anything beyond these three categories charged to the worker by the agency is a violation. An agency offering "training fees", "deposits", "interview fees", "certificate fees", or any variant of a placement-related charge is operating outside DMW rules.

How DMW enforces

The enforcement teeth are not theoretical.

Published list of delisted agencies. The DMW maintains a public list of recruitment agencies whose licences have been revoked, suspended, or are under investigation. Any EU buyer can check whether the agency they are working with appears on this list.

Complaints inbox in multiple languages. Filipino workers anywhere in the world can file a complaint against an agency or foreign principal through the DMW's online portal. Complaints are tracked and routed to the relevant Migrant Workers Office (MWO) at destination.

MWO investigation capability. The MWOs at destination (around 30 countries including Italy, Germany, UAE, Saudi Arabia) have the mandate to inspect employer sites, interview workers, and recommend enforcement actions back to DMW Manila.

Criminal liability for fee charging. Beyond licence revocation, the agency principal can face criminal prosecution under Republic Act 10022 for fee charging or contract substitution. Several high-profile prosecutions have resulted in jail sentences.

Job Order suspension for foreign principals. Where an EU employer is implicated in fee charging at the worker side (even through the agency intermediary), the employer's accreditation is suspended. The next Job Order is not verified.

What EU buyer verification looks like

For an EU buyer with active supplier-compliance obligations under the German LkSG, French Devoir de Vigilance, or the upcoming Corporate Sustainability Due Diligence Directive (CSDDD), Filipino corridor verification involves four practical checks.

These checks are not adversarial. A compliant agency provides the evidence proactively, because it is the documentation any agency operating to DMW rules already holds.

The check that most often surfaces issues at the buyer level is the worker payment trail. A buyer audit interviewing workers individually, with translation and a confidential reporting channel, will surface fee charging that documentary review missed. Werklist's documentation includes the worker's signed declaration of no fees paid at the pre-departure stage.

Where the rules get tested

Three pressure points where the no-fee rule is sometimes attempted to be bent.

"Training" disguised as a fee. An agency offering "free" placement on condition of paid training upfront, with the training being a thin veneer for the placement fee. DMW investigates this pattern. The test is whether the training is meaningful technical content, not a vehicle for fee collection.

Sub-agent fee extraction. A licensed agency relying on unlicensed sub-agents in the provinces who charge workers a "service fee" before forwarding the CV to the main agency. The main agency claims no knowledge. DMW treats this as a violation of the main agency's responsibility, the licensed entity is accountable for the corridor.

Deductions from first-month wages. An employer attempting to recover the placement fee through deductions from the worker's first months of wages. This is contract substitution plus fee charging, the most serious form of violation. DMW will trace and enforce.

The Werklist corridor design specifically excludes all three patterns. Sub-agents are paid by Werklist, not by workers. Training is genuine pre-deployment preparation, no fees attached. Wage deductions are limited to the legitimate Croatian statutory contributions, not to any placement cost recovery.

The CSR business case

The no-fee policy is sometimes framed as a cost burden on the EU employer. The math says otherwise.

A worker arriving in Croatia debt-free is structurally better positioned for retention. The Filipino retention rate in EU deployments runs in the high 80s to low 90s percent at 12 months in part because workers are not under debt overhang.

A buyer audit identifying fee extraction at a supplier site triggers buyer-side termination of the supply relationship. The cost of losing a major EU buyer over a forced-labour indicator is significantly greater than the agency fee saved.

The CSDDD enters force in 2027, with reporting obligations for buyers across the supply chain. Suppliers running compliant Filipino corridors are positioned ahead of the curve. Suppliers running worker-paid corridors face supply-chain restructuring under buyer pressure.

For the cost model that runs the corridor employer-pays, see Recruitment fee model for Philippines hiring, employer pays everything. For the wider employer obligation map, see Employer obligations under DMW.

Talk to your corridor lead

Send the brief, roles, headcount, destination, target start. We come back with documentation evidence of the no-fee corridor build for your specific deployment, whether you sign with us or not. Contact us.