Househelper’s loan from employer limited to his/her six months’ salary

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Persida Acosta

Persida Acosta

Dear PAO,
I have a kasambahay (domestic worker or househelper) who is asking if she can borrow money from me. As much as I am willing to accommodate her on her request, I would like to know the legal way of doing this considering that she has been working for my family as a househelper for years already. Am I at all required by law to lend her money? And is there a specific way of doing this? And also, I wish to know, how can I properly collect her loan payment through wage deduction? Thanks!
Chuck

Dear Chuck,
The answer to your question is found in the Implementing Rules and Regulations of Republic Act (RA) 10361, known as the Domestic Workers Act or Batas Kasambahay. This law contains a provision on loan assistance to househelpers, which states:

“SEC. 10. Loan Assistance – An employer may agree to extend loan assistance to the kasambahay in an amount not exceeding his/her six months’ salary. xxx” (Implementing Rules and Regulations (IRR) of RA 10361, Rule IV)

It must be noted that while the aforementioned provision does not strictly require employers to provide loan assistance to househelpers, it recognizes the employers’ option to financially assist them since the law states that employers “may” agree to extend loans to their kasambahay. Please take note, however, that the law also provides an express limitation with regard to the amount of loan involved since it specifies that it must not exceed an amount equivalent to six (6) months’ worth of salary.


Should you agree to provide a loan to your househelper, the law gives you an option to deduct it from the wages of your kasambahay. The amount that you may deduct, however, must not exceed twenty percent (20 percent) of her wage every month (Section 11, Rule IV, IRR of RA 10361). And if you decide to resort to such wage deduction as a mode for payment of her loan, this must be made in writing to show the consent of your kasambahay and that the details of such deduction must be contained in your househelper’s pay slip (Section 2, Rule V, IRR of RA 10361).

Since the allowed manner of employer’s collection and payment of loans by the kasambahay is clearly provided for in this law, it is important for you to note that it follows as much as it is provided by law that debt bondage is prohibited. Debt bondage is defined by law as the rendering of service by the househelper as security or payment for a debt where the length and nature of service is not clearly defined or when the value of the service is not reasonably applied in the payment of the debt. (Section 3b, Rule 1, IRR of R.A. No. 10361). Thus, the payment for the debt or loan of a kasambahay must be paid in the manner specified and allowed by law in order to protect the househelper from potential abuse and inhumane treatment.

We conclude by reiterating that should you decide to accommodate your househelper’s request for loan assistance, you may do so but subject to the specific provisions stated by the aforementioned rules. And any contravention to the above-cited provisions will be considered as an offense punishable by law.

Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to enlighten you on the matter.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

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