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RePublic of the PhiliPPines -DEPARTMENT OF LABOR AND EMPLOYMENT'1.;';[,, ;i, ;:Iiil0Yi?iEiilntramuros. Manila lCr,rh ",1rdt:re Seryrci Ceilnl ii9;0.: 3 Secion4SDoArE 12 ti ti;i' 2012irrrE __ll:]h4tu -..--ADVfSORY No. 01-20312UNIFORM IMPLEMENTAfION OF DEPARTMENT ORDER NO. 18.A, ISERIES OF 2011FOR : ALL REGIONAL DIRECTORSDATE : 20 March 2012

To harmonize the imPlementationplease be guided by the following: of Deoartment Order No. 18-A, Series of 2011'

1. Renewal of istr nder Deoartment r 18. series ofContractors/subcontractors with unexpired registration under D.O, 18, Series of 2002'could register under D.O. 18-A, Series of 2011, upon application and compliance withthe requirements under the new issuance.Thus, where a contractor/subcontractor with unexpired D.O. 18-02 registration appliesfor registralion under D.O; 18-A, the same may be processed accordingly'Upon issuance of the D.O. 18-A registration, the unexpired registration under D.O' 18-02 is deemed cancelled.

2. Renewal of con s istration wirecruitment and placeqlent agencv (PRPA) licens-e.Gontractorslsubcontractors could no longer engage in both contracting and recruitmentand placement activitieg pursuant to Department Order No. 18-A, Series ol 2011.Contractors/subcontractors with unexpired PRPA License under the Rules governingpRpA for Locat Employment issued on 5 June 1997 could no longer renew itsregistration under D.o. 18-A without abandoning its PRPA License.

3. Pho3 Million CaPitalization"substantial capital' refers to paid-up capital stocks/shares of at least Three Millionpesos (p3,000,d00.00) in the case of corporations, partnerships and cooperatives; inthe case of single proprietorship, a net worth of at least Three Million Pesos(P3,000,000.00).1,,paid-up capital" refers ro the subscribed capital stocks, which have been fully paid up.Thus to be considererj substanlially capitalized, corporations, partnerships orcooperatives must have fully paid subscribed capital stocks of equivalent to 3 Million'

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' Section 3(l), D.O. 18-lr

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qF.-Page 2 of 3ADVISORY No.01-20312UNIFORM IMPLEMENTATION OF DEPARTMENT ORDER NO. 18-A, SERIES OF 2011

The following documents can serve as proof that a company engaged incontractin g/s u bcontracting is substantially ca pitalized :. Audited financial staternents. Income Tax Return (lTR). SEC certification of capitalization' CDA certification of capitalization

Hence, corporate assets or properties, whether personal or real, are not considered p{ahof the paid-up capital for purposes of compliance with the minimum substantiafcapitalization under D.O. 18-A. IIn case of sole proprietorship, net worth refers to the total assets minus total liabilities,lwhich can be proven by the following documents:

. Audited financial statements' income Tax Return (lTR). Certificate of title/proof"of ownership of real property with assessed fair marketvalue from BIR. Stock Certificate which shall be considered on its face value. Certificate of bank deposits. DTI certificate of capitalization4. Coveraqe

D.O. 18-A applies to alJ parties of contracting and subcontracting arrangementsincluding cooperatives engaged in contracting or subcontracting anangements.D.O. 1B-A, as clarified in the attached Department Circular No. 01, Series of 2012, doesnot cover lhe following:

. Contractor/subcontractor in the Construction Industry licensed under PCABRules and Regulations

. lnformaiion Technology-enabled services involving entire business process suc ld>.

o Business Process Outsourcingio Knowledge Process Outsourcing;o Legal Process Outsourcing;o Hardware and/or software support;o MedicaltranscriPtion;o Animation services; ando Back office oPerationsisuPPortD.O. 18-A does not cover Canteen Concessionaires whose relationship with theprincipal is in the nature of a lease contract or contract to operate.

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Page 3 of 3ADVISORY No.01-20312UNIFORM IMPLEMENTATION OF DEPARIMENT OROER NO. 18.A, SERIES OF 2011

5. OrientationOrientations conducted on D. O. 18-A by associations, organizations and other entitiesin cooperation with the DOLE shall be considered as compliance to the requirement ofthe last paragraph of Section 15 of the Department Order. In such cases, applicantsshould only be subjected to probing questions on their appreciation and understandingof their responsibilities and obligations as employers under D.O. 18-A.Publi-cation of the List of 9ubggntractors/Contractors with Expirinq and ExpiredReqistration in the Regiql.All Regional Offices are directed to publish a notice to the public ofsubcontractorsicontractors with expired or expiring registration based on the Registryof Legitimate Subcontractors/Contractors/Service Providers in the Region. /Subcontractors/contractors with expired registration are directed to cease and desis /ffrom engaging in contracting/subcontracting activities while those with expiringflregistration are directed to renew their Certificate of Registration thirty (30) days before -,the expiration of their registration to remain in the roster of legitimate service contractors'as required in Section 21 of D.O. 1B-A. The information to be published should includethe following:

. Name or business name of the contractor/subcontractor and the registered placeof business. Name/s of the owner/s or proprietor/s for sole proprietorship. Name of the President, General Manager or Chief Executive Officer in the caseof corporation, partnership or cooperative

The notice should also state thal pursuant to Section 20 of D.O. 18-A,subcontractor/contractor operating in a region other than where it is registered shouldobtain a duly authenticated copy of its Certificate of Registration from the registeringDOLE Regional Office, and submit the same, together with a copy of the ServiceAgreement, to the Regionall Office where it is operating for inclusion in the Registry ofLegitimate Subcontractors/Contractors/Service Providers in the Region.For guidance and strict cornpliance.

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DES M. TRASMONTEUndersecretary