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DEPARTMENT OF LABOR AND EMPLOYMENT'1.;';[,, ;i, ;:Iiil0Yi?iEii
lCr,rh Seryrci Ceilnl ii9;0.:!3 Secion4SD
lntramuros. Manila ",1rdt:re

oArE ti ti;i' 2012

12

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ADVfSORY No. 01-20312
I

UNIFORM IMPLEMENTAfION OF DEPARTMENT ORDER NO. 18.A,

SERIES OF 2011

FOR : ALL REGIONAL DIRECTORS

DATE : 20 March 2012

To harmonize the imPlementation of Deoartment Order No. 18-A, Series of 2011'

please be guided by the following:

1. Renewal of istr nder Deoartment r 18. series of

Contractors/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 with
the requirements under the new issuance.

Thus, where a contractor/subcontractor with unexpired D.O. 18-02 registration applies

for 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 wi

recruitment and placeqlent agencv (PRPA) licens-e.

Gontractorslsubcontractors could no longer engage in both contracting and recruitment

and placement activitieg pursuant to Department Order No. 18-A, Series ol 2011.

Contractors/subcontractors with unexpired PRPA License under the Rules governing

pRpA for Locat Employment issued on 5 June 1997 could no longer renew its
registration 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 Million

pesos (p3,000,d00.00) in the case of corporations, partnerships and cooperatives; in
the 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 or
cooperatives must have fully paid subscribed capital stocks of equivalent to 3 Million'

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

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

The following documents can serve as proof that a company engaged in

contractin 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{ah
of the paid-up capital for purposes of compliance with the minimum substantiaf
capitalization under D.O. 18-A. I
In case of sole proprietorship, net worth refers to the total assets minus total liabilities,l
which 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 market
value from BIR
. Stock Certificate which shall be considered on its face value
. Certificate of bank deposits
. DTI certificate of capitalization

4. Coveraqe

D.O. 18-A applies to alJ parties of contracting and subcontracting arrangements

including cooperatives engaged in contracting or subcontracting anangements.

D.O. 1B-A, as clarified in the attached Department Circular No. 01, Series of 2012, does
not cover lhe following:

. Contractor/subcontractor in the Construction Industry licensed under PCAB

Rules and Regulations

. lnformaiion Technology-enabled services involving entire business process suc!l

d>.

o Business Process Outsourcingi

o Knowledge Process Outsourcing;
o Legal Process Outsourcing;
o Hardware and/or software support;
o MedicaltranscriPtion;
o Animation services; and
o Back office oPerationsisuPPort

D.O. 18-A does not cover Canteen Concessionaires whose relationship with the
principal is in the nature of a lease contract or contract to operate.
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Page 3 of 3
ADVISORY No.01-20312
UNIFORM IMPLEMENTATION OF DEPARIMENT OROER NO. 18.A, SERIES OF 2011

5. Orientation

Orientations conducted on D. O. 18-A by associations, organizations and other entities

in cooperation with the DOLE shall be considered as compliance to the requirement of
the last paragraph of Section 15 of the Department Order. In such cases, applicants
should only be subjected to probing questions on their appreciation and understanding
of their responsibilities and obligations as employers under D.O. 18-A.

6. Publi-cation of the List of 9ubggntractors/Contractors with Expirinq and Expired

Reqistration in the Regiql.

All Regional Offices are directed to publish a notice to the public of

subcontractorsicontractors with expired or expiring registration based on the Registry
of Legitimate Subcontractors/Contractors/Service Providers in the Region. /
Subcontractors/contractors with expired registration are directed to cease and desis!/f
from engaging in contracting/subcontracting activities while those with expiringfl-,
registration 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 include
the following:

. Name or business name of the contractor/subcontractor and the registered place

of 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 case
of 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 should
obtain a duly authenticated copy of its Certificate of Registration from the registering
DOLE Regional Office, and submit the same, together with a copy of the Service
Agreement, to the Regionall Office where it is operating for inclusion in the Registry of
Legitimate Subcontractors/Contractors/Service Providers in the Region.

For guidance and strict cornpliance.

DES M. TRASMONTE
Undersecretary