Overview
An Alien Employment Permit (AEP) is an authorization document issued by DOLE (Department of Labor and Employment) that allows a foreign national to legally work in the Philippines for a specific position and company. In Philippine labor law, the default rule is that jobs should be filled by Filipino citizens, and a non-resident foreign national can be hired only if they possess special skills or if there are no qualified local candidates readily available for the position . The AEP is the mechanism by which DOLE evaluates and approves such employment of foreigners. The AEP is a printed card or certificate that typically bears the foreign employee’s name, the employer’s name, position, and validity period. It is not a visa; rather, it is a labor permit. However, it is a prerequisite for a foreign worker to obtain a work visa (the 9(g) Pre-arranged Employment Visa) from the Bureau of Immigration . In practical terms, any foreign national intending to work longer-term (generally beyond six months) in the Philippine private sector needs to secure an AEP, unless exempted by law.
AEPs are usually valid for 1 to 3 years, aligned with the employment contract term, and can be renewed for up to a cumulative total of 5 years . They are position- and employer-specific: if a foreign employee changes jobs (even within the same company to a different role), a new permit or an amendment is required. The process of obtaining an AEP involves the employer proving there is no local who can do the job and paying a permit fee (₱9,000 for a one-year permit, ₱14,000 for two years, etc., as set by DOLE). DOLE publishes the application in its database or website to allow any Filipino who feels qualified to object – if none object and DOLE finds the documents in order, the permit is issued. For HR, managing AEPs is a critical part of onboarding foreign hires.
Legal or Regulatory Basis
The requirement for an Alien Employment Permit is grounded in the Labor Code of the Philippines. Article 40 of the Labor Code (as renumbered) stipulates that “any alien seeking employment in the Philippines” must obtain an employment permit from the Department of Labor after a determination of the non-availability of a person in the Philippines who is competent, able, and willing to do the job. Over the years, this provision has been fleshed out by DOLE through administrative orders. The current rules as of 2025 are outlined in DOLE Department Order No. 248-2025, which replaced the earlier DO 221-21. These rules specify who needs an AEP, who is exempt, and the process for application .
Under DO 248-25 (and prior DO 186-17 and DO 221-21), certain categories of foreigners are exempt from needing an AEP, typically:
• Members of the diplomatic service and foreign government officials accredited to the Philippines.
• Officers and staff of international organizations (like the UN or ADB) of which the Philippines is a member.
• Foreign nationals coming to teach at international schools, or those accredited to the local school system under special agreements.
• Engineers and technicians under service contracts for specific projects (but they need to get a Certificate of Exemption).
• Owners and representatives of foreign principals (like those hiring Filipino seafarers) as approved by DOLE.
• Intra-corporate transferees from a foreign office to a Philippine branch or subsidiary, if covered by the Philippine commitments under international agreements (e.g., WTO, ASEAN).
Additionally, the rules enumerate foreigners who are excluded from needing an AEP, such as:
• Those who are elected as board directors in a Philippine corporation but do not occupy any management or operating position (since mere board membership often doesn’t require an AEP). However, if they earn remuneration beyond board per diems, an AEP might be required unless falling under exemption.
• Those who come in under special visas like 47(a)(2) visas for treaty traders or PEZA investors, often have separate rules (though DOLE now often requires even them to secure a Certificate of Exclusion).
For everyone else, the AEP is mandatory. The Labor Code and DOLE’s rules enforce the principle of “labor market test” – essentially, DOLE will issue an AEP only after ensuring that hiring the foreign national will not adversely affect the employment opportunities of Filipinos .
The rules require publication of new AEP applications on DOLE’s website and job vacancy posting in public employment offices for at least 30 days . The recently updated rules (DO 248-25) even require employers to publish the intention to hire the foreign national in a newspaper of general circulation and on PhilJobNet, naming the foreign national and the position . This is to transparently announce to the labor market that a foreigner is being considered for a role, giving Filipinos a chance to apply or object if they are qualified.
If a Filipino formally objects to an AEP application on grounds that they are qualified, DOLE conducts a hearing. Absent any meritorious objection, or if no one objects, DOLE assumes no qualified local is immediately available.
Legally, working without an AEP (when one is required) is a violation. The foreign national can be deported by Immigration for working without authorization, and the employer can be fined by DOLE (currently, DOLE can penalize employers P10,000 per foreign employee working without a valid permit). Renewals are required if the employment extends beyond the initial AEP validity. The regulatory basis also ties into the Joint Guidelines of 2019 issued by DOLE, BI, and DOJ, which integrated processes so that an AEP is needed before BI issues a work visa, and likewise BI requires presentation of the AEP or proof of AEP exemption when applying for or renewing a work visa .
Finally, local government units (cities) often require companies employing foreigners to show proof of AEPs when renewing business permits. And the BIR requires foreigners to have a TIN as part of the work permit process , as previously mentioned. So the AEP is legally interlinked with other compliance areas.
Contribution or Eligibility Criteria
To be eligible for an AEP, the foreign national must be engaged, or to be engaged, in a job that meets two main criteria:
1. The job position requires skills or expertise that the foreign national possesses, usually evidenced by education, training, or experience.
2. There is no able, willing, and qualified Filipino readily available for that position at the time of application.
From the employer’s side, when applying for an AEP, they submit:
• A duly accomplished application form.
• Photocopy of the employment contract or appointment letter stating the position and compensation of the foreign national.
• A justification letter explaining why the foreign national is being hired and certifying that no Filipino can fill the position.
• Photocopies of the foreign national’s passport (with valid visa if already in the Philippines).
• A resume or bio-data of the foreign national, plus proof of credentials (diplomas, certifications).
• Recent 2×2 photographs of the foreigner.
• Proof of publication of the job vacancy (as per new rules, if required).
• If the foreign national is a company officer, copies of the Articles of Incorporation and evidence of the appointment (Board Secretary’s Certificate).
• If a Certificate of Exemption or Exclusion is needed (for exempt roles), an application for that.
In practice, DOLE regional offices handle AEP issuance. They often require the employer to show that the foreign national has a tax identification number (TIN) from BIR or at least an application for one, per the 2019 Joint Guidelines .
Not all foreign nationals who get an AEP are highly paid executives; some are technical personnel, language teachers (e.g., Korean or Japanese language instructors), or professional athletes and coaches – as long as their skill is in demand and scarce locally. However, DOLE has been stricter for certain occupations where they believe Filipinos are readily available. For instance, DOLE might deny AEPs for positions like “HR Manager” or “Sales Executive”, arguing Filipinos can do these, whereas they might allow AEPs for positions like “Ballet Master for a professional dance company” or “Japanese-speaking IT engineer,” where the specific skill or language is not common locally.
Another eligibility aspect is that the foreign national must not have any derogatory record (if they were kicked out before or violated laws, their AEP can be denied or revoked). An AEP can also be revoked if a Filipino is later identified to be available and the foreigner has not yet significantly transferred knowledge (this is rare, but the law provides for possible cancellation if the reasons for issuance no longer exist).
For duration: initial AEP validity can be up to the contract length but not more than 3 years typically (the law allows up to 5 in one go , but commonly 1-2 years are given). The foreign national’s 9(g) work visa duration will usually match the AEP’s, since Immigration defers to the AEP validity as the allowable work period.
Certain short-term work situations do not require an AEP but rather a Special Work Permit (SWP) from Immigration instead – essentially if the work is under 6 months, an SWP is often used and DOLE doesn’t issue an AEP for those short stints. That’s why, for example, performing artists coming for a 3-month concert tour or consultants installing equipment for 4 months typically do not get AEPs but operate on SWPs (with DOLE exempting them by rule). The AEP requirement really kicks in when the employment is more than 6 months or the foreigner intends to hold a long-term position.
Purpose and Use in HR or Business Compliance Context
The AEP system serves a dual purpose: (1) to protect the local labor force by ensuring foreigners are only employed in roles where there’s a shortage of Filipino skills, and (2) to facilitate businesses in legally accessing foreign talent when needed for specialized roles. From an HR perspective, securing an AEP is a crucial step whenever hiring a foreign national or transferring an expatriate to the Philippines.
Recruitment/Onboarding: If a company identifies a foreign candidate for a role, HR must plan the timeline for obtaining an AEP. Typically, the foreigner cannot start working until the AEP is granted (and the work visa obtained subsequently). However, recognizing business realities, the Bureau of Immigration may allow a foreign hire to start work under a Provisional Work Permit (PWP) while the AEP is in process , provided the AEP application has been filed . Still, the ideal is to have the AEP in hand quickly. HR might need to manage expectations – both of management and the foreign hire – regarding the lead time (it can take anywhere from 2 to 6 weeks for AEP issuance, depending on the DOLE regional office’s workload and whether there are objections).
Compliance and Record-Keeping: HR should maintain a register of all foreign employees and the expiry dates of their AEPs (and visas). Renewals must be filed at least a month before expiration to avoid any gap. If a foreign employee resigns or is terminated, HR is required to notify DOLE within a certain period (usually 15 days) and return the AEP card for cancellation. This is important so that DOLE’s records are updated and the slot is considered open for Filipino workers again. If the company fails to notify, an AEP might linger active and DOLE could mistakenly think the position is still filled by a foreigner, potentially affecting future AEP applications.
During Employment: The AEP itself doesn’t impose obligations on the employer beyond what is generally required, but one implicit expectation is knowledge transfer. Often DOLE likes to see (especially for renewals) that the foreign worker has been training Filipinos to potentially take over their role (this is in line with regulations encouraging a Skills Development or Understudy program – DOLE sometimes asks if the employer has a Filipino understudy for the foreigner). It’s good practice for HR to document any training or capacity-building the foreign expert provides to local staff; this can be helpful if ever DOLE inquires or if a renewal needs justification.
Interfacing with Other Agencies: HR uses the AEP in dealings with the Bureau of Immigration (BI). For example, when applying for or extending a 9(g) work visa for the foreign employee, a valid AEP must be presented to BI . If an expat loses his AEP card, HR must secure a replacement from DOLE, otherwise visa renewal at BI might be an issue. Also, local government business permit renewals, as mentioned, sometimes ask for a list of foreign employees with AEPs. Ensuring all paperwork is consistent (names spelled the same on AEP, passport, visa, TIN, etc.) is an HR administrative duty that smoothens multi-agency transactions.
Addressing Objections: In the rare case that during an AEP application a Filipino citizen sends an objection claiming they are qualified for the job in question, HR should be prepared to defend the hire. This could involve demonstrating that the objecting individual does not, in fact, meet the job specifications or perhaps that the company did consider local candidates and none were suitable (without disparaging the objector too directly). Such cases can go to a hearing at DOLE. It’s not common, but it underscores that the AEP is a public process, and HR should ensure that they only pursue foreign hires for roles truly requiring them – which is usually the case, as the cost and process of expatriation is significant anyway.
In sectors like IT-BPO, some companies regularly hire foreigners (for language-specific roles or high-tech roles). HR in those companies often develops an internal expertise on AEP processing – sometimes even assigning one staff solely to handle expat documentation. In contrast, companies new to foreign hiring might rely on immigration lawyers or consultants to help with the AEP process. Even if using a consultant, HR should understand the steps and requirements because ultimately the employer is responsible for compliance.
Industrial Relations Impact: It’s worth noting that from an employee relations viewpoint, having foreign nationals in the workplace can sometimes create perceived disparities (e.g., expats often get higher pay and extra benefits). Ensuring the foreign hires integrate well and knowledge is shared can improve acceptance among local staff. Also, should a union exist, they have the right to be informed of foreign workers in the company. In unionized settings, sometimes unions keep an eye on AEPs to make sure the company isn’t hiring foreigners for jobs that union members could do. This is another reason to ensure AEP hires are justifiable.
Recent Developments or Legal Changes
As already noted, a significant recent change in the AEP process is the issuance of DOLE Department Order No. 248-2025. Some of the key changes and developments from the older rules include:
• Longer Filing Period: Employers now have 15 calendar days from signing the employment contract or issuing the appointment to file the AEP application . Previously it was 10 working days. This gives a bit more leeway for HR to gather documents and apply, especially useful if a foreign hire signs a contract and needs some time to arrive in the Philippines.
• Stricter Labor Market Test: DOLE has bolstered the requirements for advertising the position. The new rules explicitly mandate employer-led publication in a newspaper, posting on the DOLE’s job portal (PhilJobNet), and posting at the local PESO (Public Employment Service Office) where the job is located . Under old rules, DOLE regional office did the posting in their office and website for 30 days; now the onus is also on the employer to advertise widely. This could slightly slow the process, as HR must arrange a newspaper ad, etc., and include proof of such in the application.
• Exemption Certificate Mandatory: Under DO 221-21, if a foreign national was exempt from AEP, they may request a Certificate of Exemption. The new rules make it shall request – meaning it’s compulsory for exempt foreign workers to get an official exemption certificate from DOLE . Practically, this brings even those who wouldn’t normally need an AEP into DOLE’s documentation fold. For HR, it means if you have an expat who’s, say, a diplomatic spouse working in a diplomatic school (who might be exempt), you still must engage DOLE to get the exemption paperwork. It’s an extra step but it helps ensure no ambiguity if BI or other authorities ask for proof why an AEP isn’t present.
• Prohibited Acts and Penalties: DO 248-25 enumerates grounds on which AEP applications can be denied or revoked, such as submission of fraudulent documents, or if the foreign worker is found to be working in a job different from what’s stated in the AEP . Also, it lists prohibited practices for employers (like letting a foreigner work without a valid AEP or with an expired one). While these were implicitly understood before, listing them clearly puts HR on notice of what not to do. If an employer is found violating, DOLE can now more transparently penalize or blacklist them from future permits.
• Corporate Officers Publication Exemption: The new rules specifically exempt publishing the vacancy for certain corporate officers . High-level positions listed in a corporation’s Articles of Incorporation (like Director, President, Treasurer, etc.) do not need to go through the 30-day publication requirement for AEP, likely on the rationale that these are trust positions often filled by owners or investor representatives. This is a small relief for companies that bring in foreigners as corporate officers – they still need the AEP, but at least they won’t wait 30 days of ads; DOLE can process their AEP faster. HR should identify if an expat hire qualifies for this exemption and flag it in the application.
• Conditional Employment Contracts: A noteworthy insertion is that employment contracts with foreigners are now explicitly made “conditional” on issuance of an AEP . The rules say the effectiveness of the employment contract is conditioned on the foreigner obtaining an AEP. This essentially protects employers – if DOLE denies the permit, the contract can be considered void (so the company isn’t obliged to employ someone it legally can’t). HR should ensure offer letters or contracts to foreign hires contain a clause to this effect, aligning with the DOLE rule.
• AEP Application While Abroad: The rules clarify that employers can file for an AEP even if the foreign national is still outside the Philippines at the time . DOLE will process it, but will only release the actual AEP card when the foreign national has entered the country on the appropriate 9(g) visa and presents themselves to DOLE. This is helpful because it means HR can start the AEP paperwork early, potentially overlapping with the visa processing.
• Understudy Training Program: There’s emphasis in DO 248 on employers having an understudy program to transfer skills from the foreign national to Filipinos . DOLE encourages that at least two Filipino employees should be mentored by each foreign national. While not strictly policed day-to-day, demonstrating this in renewal applications or if queried is wise. It reflects DOLE’s push for capacity building so that eventually, the job might be localized.
Other developments:
• In 2019, the Philippine government became particularly strict about foreigners without permits, especially due to the influx of online gaming (POGO) workers. Joint inspections by DOLE and Immigration were conducted in some firms. As a result, companies in sectors hiring many foreigners have tightened internal compliance. It’s now common for HR to ensure every foreign worker carries a copy of their AEP card and visa in case of random checks.
• The government also introduced new Special Visa categories for certain investors (like an upgraded Special Resident Retiree’s Visa and an Investor’s Visa under the CREATE law for big-ticket investments). Some of these visas waive the AEP requirement as part of incentives. HR should verify if any foreign executive on such a visa is exempt. Usually, if the law says so, DOLE will issue a certificate of exclusion. For example, a foreigner holding an SSEV (Start-up Owner’s Visa under recent start-up act) might be exempt, but one should confirm with DOLE.
• DOLE and BIR’s enforcement of the TIN requirement (since mid-2019) is now standard. No AEP will be issued without evidence that the foreigner has applied for a TIN . So HR must coordinate with the foreign hire on obtaining a TIN early (which can be done online via ORUS or at a BIR office). This measure was introduced to ensure foreign workers pay taxes; DOLE basically becomes an enforcer of tax compliance at the permit stage.
Given these changes, an employer now has to be a bit more proactive and organized when hiring foreigners. However, these steps also formalize the process better, which can ultimately streamline things once the new system is understood.
Importance for Employers and Employees
For employers, compliance with AEP regulations is not optional – it’s legally required and integral to being allowed to utilize foreign expertise. The AEP should be seen as the “gate pass” for any expatriate employee. If an employer bypasses this and employs a foreigner without an AEP, they risk immediate consequences: DOLE can swoop in and order the foreigner’s removal, impose fines, and the Bureau of Immigration can deport the foreign national and blacklist the individual (and potentially scrutinize the company’s future visa requests heavily). Such an incident could also attract negative publicity – being accused of hiring illegal foreign workers can damage a company’s reputation and its relationship with government agencies. Moreover, hiring a foreigner without an AEP means that foreigner has no legal right to work; thus any work done in that period could be considered invalid, and the company might even face issues of paying compensation (since technically the employment is not legal).
From a talent management perspective, an AEP gives a foreign hire peace of mind that they are working legally and recognized by the government. This likely makes them more productive and focused on their job rather than worrying about immigration raids. It also cements their commitment to knowledge transfer, knowing they are here with the government’s consent partly to upskill local colleagues.
Employers also benefit from the AEP process because it sets a formal structure to foreign hiring. By justifying the hire to DOLE, HR also implicitly justifies it to itself – often these processes ensure that companies don’t frivolously hire from abroad when local talent is available (which would generally be more cost-effective anyway). In other words, it encourages strategic use of expats only for roles truly needed, which can be cost-efficient for the business in the long run. If a company is multinational, ensuring all their expatriate staff in the Philippines have proper AEPs and visas also avoids diplomatic issues – the company maintains good standing and avoids potential inter-country labor issues or tax issues.
For employees, particularly the Filipino workforce, the AEP requirement is an important safeguard. It helps ensure that foreigners are not taking jobs that could be done by locals, especially in mid-level or rank-and-file positions. This addresses potential local worker resentment – they know that any foreigner working in the company has gone through DOLE’s vetting. If employees feel a particular foreign hire isn’t extraordinary or needed, they themselves (or through a union) have an avenue to question it during the permit process. That being said, in most cases foreign employees are brought in precisely to fill a gap, so locals often appreciate learning from them. The AEP rules buttress this by encouraging an understudy program , meaning employees might get mentorship or training from the foreign expert that they wouldn’t otherwise receive.
For the foreign employee, an AEP (along with the visa) integrates them into the Philippine labor system. For instance, once they have an AEP and work visa, they are typically registered to pay PhilHealth, SSS, Pag-IBIG, and taxes just like any Filipino employee. They contribute to and benefit from these systems (there are even totalization agreements between the Philippines and some countries for SSS, so contributing isn’t a loss). So an AEP-holding foreign worker is in a sense treated similarly to a Filipino worker in terms of labor protections – they are covered by the Labor Code provisions (on working conditions, etc.) as well. Without proper permits, a foreign worker would be in a precarious, unprotected situation, possibly exploited or underpaid since they wouldn’t complain to authorities. The AEP thus actually protects the foreign worker too from being “under the table” and vulnerable. It formalizes their employment, giving them certain rights (e.g., if a foreigner with an AEP is unjustly terminated, they can file a labor case just like a local would).
From a national perspective, the AEP process aims for a balance: allowing knowledge and technology transfer through foreign experts while safeguarding local employment. Companies that respect this balance by diligently following AEP rules often find that government agencies are cooperative in return – e.g., DOLE might expedite an urgent AEP need if the company has a clean track record and the situation merits (like a foreign specialist needed to fix a critical plant breakdown).
In industries where foreign talent is a cornerstone (like IT/business process outsourcing requiring foreign language speakers), the AEP regime gives those industries legitimacy. For example, Japanese or Korean BPOs in the Philippines can justify to DOLE the need for native speakers for certain roles, get AEPs for them, and thereby operate smoothly, creating thousands of local jobs in tandem. If AEPs were not available, such companies might not invest in the Philippines at all. So it’s a tool that indirectly also creates local employment by enabling foreign investments that rely on a mix of foreign and local employees.
In summary, for employers the AEP is a compliance necessity and a means to harness global talent legally; for Filipino employees, it is a protective filter; and for foreign employees, it is a license that grants them lawful worker status and the rights that come with it. HR sits in the middle, ensuring all sides are balanced – hiring the needed talent while upholding the law and protecting the company’s workforce integrity. Ignoring or mishandling AEP obligations would risk all those balances, hence its importance can’t be overstated in the Philippine HR compliance landscape.
