Registration under the DOLE Department Order No.

174 (“DO 174”) is a separate

registration requirement for all “contractors”, which is defined as any person or entity
engaged in a legitimate contracting or subcontracting arrangement providing services
for a specific job or undertaking farmed out by a principal under a Service Agreement.
“Contracting” or “Subcontracting” refers to an arrangement whereby a principal agrees
to farm out to a contractor the performance or completion of a specific job or work
within a definite or predetermined period, regardless of whether such job or work is to
be performed or completed within or outside the premises of the principal. (DO 174,
Sections 3(c), 3(d), and 14)

DO 174, including the requirement for registration, would not be applicable to certain
industries and contractual relationships provided under DOLE Department Circular
No. 01-17 (“DC 01-17”), which are as follows:
1. Information technology enabled services involving an entire or specific
business process such as: (a) business process outsourcing; (b) knowledge
process outsourcing; (c) legal process outsourcing; (d) IT Infrastructure
outsourcing; (e) Application Development; (e) Hardware and/or Software
Support; (f) Medical Transcription; (g) Animation Services; and (h) Back Office
Operations/Support;
2. Construction industry, for certain phases of construction project, under the
licensing coverage of Philippine Contractors Accreditation Board (“PCAB”);
3. Private Security Agencies;
4. Other contractual relationships such as contract of sale or purchase, contract
of lease, contract of carriage, growership agreement, toll manufacturing,
contract of management, operations, and maintenance, and such other
contracts governed by the Civil Code of the Philippines and other special
laws; and
5. Contracting-out to professionals, or individuals with unique skills and talents,
who himself or herself performs the job or work for the principal.

Based on our informal (no-name) inquiry with the Bureau of Working Conditions
(“BWC”), we were informed that the BWC issues confirmation on whether a service
provider is required to register under DO 174. Preliminarily, we were also advised that
if the arrangement involves a trilateral relationship -- the principal (client), the service
provider (contractor), and the contractor’s employees -- it is advisable to register under
DO 174, or seek confirmation of exemption with the BWC.