Contract of Service (COS) and Job Order (JO) personnel represent a substantial portion of the workforce across National Government Agencies (NGAs), Local Government Units (LGUs), State Universities and Colleges (SUCs), and Government-Owned or -Controlled Corporations (GOCCs).
Despite carrying out essential functions, COS and JO workers traditionally lack an employer-employee relationship with hiring agencies. As a result, they do not automatically receive regular government employee benefits such as GSIS coverage, leave credits, or mandatory social insurance.
Recent policy shifts—notably Administrative Order (AO) No. 43 and supporting CSC-COA-DBM Joint Circulars—aim to bridge this gap by expanding access to fundamental social safety nets.
What Are COS and JO Positions?
To understand social protection rights, it is essential to distinguish between these two contractual classifications:
| Feature | Contract of Service (COS) | Job Order (JO) |
|---|---|---|
| Definition | Engagement of a consultant, expert, or independent contractor for a specific project/job for a limited duration. | Engagement of short-term, piecework, or emergency labor (e.g., clearance, trades, crafts). |
| Duration | Up to 1 year, renewable based on project needs. | Intermittent or short-term emergency services. |
| Employment Status | No employer-employee relationship. | No employer-employee relationship. |
| Traditional Benefits | Excluded from GSIS, plantilla benefits, leave credits. | Excluded from GSIS, plantilla benefits, leave credits. |
Key Policies Expanding Social Protection for JO and COS Workers in Government
Administrative Order (AO) No. 43
Under AO No. 43, government agencies are directed to establish mechanisms for the voluntary deduction and direct remittance of contributions to government social insurance programs:
Social Security System (SSS):
Enrolls workers under self-employed or voluntary coverage, granting access to sickness, maternity, disability, retirement, and death/funeral benefits.
Philippine Health Insurance Corporation (PhilHealth):
Ensures formal health insurance coverage for hospitalization, medical consultations, and Universal Health Care benefits.
Pag-IBIG Fund (HDMF):
Provides access to high-yield savings accounts (MP2), housing loans, and calamity loans.
Important Note: AO No. 43 explicitly states that voluntary payroll deduction and remittance do not alter or create an employer-employee relationship between the agency and the COS/JO worker.
20% Premium Pay for JO and COS Workers in Government
Under existing Joint Circular guidelines, hiring agencies may grant COS and JO workers a premium of up to 20% on top of their basic daily wage or compensation.
Purpose: This 20% premium buffer helps cover the worker’s out-of-pocket costs for SSS, PhilHealth, and Pag-IBIG contributions without diminishing their net take-home pay.
How Government Agencies Implement the Deductions
To comply with AO No. 43 and COA accounting regulations, agencies execute the following process:
1. Written Consent: The agency secures written authorization from the COS or JO worker permitting the monthly deduction.
2. MoA Execution: The agency signs a Memorandum of Agreement (MOA) with SSS, PhilHealth, and Pag-IBIG to handle collective group remittances.
3. Payroll Processing: Finance and accounting officers deduct the agreed voluntary contributions during payroll preparation.
4. Direct Remittance: The agency remits the consolidated contributions directly to the respective institutions before monthly deadlines.
Frequently Asked Questions (FAQs)
Are COS and JO workers covered by GSIS?
No. Because there is no formal employer-employee relationship, COS and JO personnel are not eligible for GSIS coverage. However, they can register with the SSS as voluntary or self-employed members.
Is payroll deduction for SSS, PhilHealth, and Pag-IBIG mandatory for COS/JO workers?
No. Enrollment and deduction are strictly voluntary and require the explicit consent of the worker. However, agencies are mandated to provide the administrative mechanism for workers who wish to enroll.
Does the 20% premium automatically apply to all contracts?
The grant of up to 20% premium pay is subject to agency budget/funds availability and guidelines set under CSC-COA-DBM joint circulars. Workers should consult their agency’s Human Resource Management Office (HRMO) or Finance Division for specific implementation details.
Can COS and JO workers apply for Pag-IBIG and SSS loans?
Yes. Once enrolled as voluntary or self-employed members and upon fulfilling the required number of monthly contributions (typically at least 24 monthly contributions for Pag-IBIG housing loans or 36 monthly contributions for SSS salary loans), COS and JO workers become fully eligible to apply for salary, calamity, and housing loans.
What happens to the voluntary deductions if a COS/JO contract ends or is not renewed?
Since SSS, PhilHealth, and Pag-IBIG memberships are tied to the individual worker—not the government agency—the account remains active. If the contract ends, the worker can simply transition to paying their monthly contributions directly as an individual voluntary member through online payment channels or payment centers to avoid gaps in coverage.
Download
Download these legal bases to learn more about implementing the social protection program of the government for JO and COS workers:
Administrative Order No. 43 — Facilitating the Voluntary Deduction and Remittance of Contributions to the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (Pag-IBIG Fund) for Contract of Service (COS) and Job Order (JO) Workers in the Government (PDF)
COA-CSC-DBM Joint Circular No. 1, s. 2025 — Revised Rules and Regulations on the Engagement of Contract of Service and Job Order Workers in the Government (PDF)
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