Labor Only Agreement (Contract)

Full Description

Labor-only contracting refers to an arrangement where the contractor does not have substantial capital or investment in tools, equipment, machinery, work premises, among others.

The contractor supplies workers to an employer, project owner, or general contractor, and the workers recruited are performing activities directly related to such employer’s principal business.

A finding that a contractor is a labor-only contractor is equivalent to a declaration that there is an employer-employee relationship between the principal and the employees of the labor-only contractor. In such a case, the labor-only contractor shall be responsible to the workers in the manner and extent as if he directly employed said, workers.