Key Changes in the New DMW Standard Employment Contract 

The new DMW Standard Employment Contract (SEC) for Overseas Filipino Seafarers introduce significant changes that may materially affect claims handling, compensation exposure, and dispute resolution.  The new SEC aligns itself with the Magna Carta of Filipino Seafarers and its Implementing Rules and Regulations and will be effective on 3 July 2026 or 15 days after publication.

Set out below are the key amendments and their practical implications.

1. Increased Base Rate by 10%  for Disability Compensation

The SEC introduces an updated base compensation:

• Base disability amount: US$55,000 from previous US$50,000
• For example, a Grade 1 disability corresponding to 120% is now equivalent to US$66,000 from the previous US$60,000

Below is now the updated Schedule of Disability Allowances

This increase in base amount raises the baseline exposure across all disability grades. In cases where the seafarer has been assessed with two or more disabilities, the total aggregate disability benefits corresponding to the assessed disabilities shall in no case exceed the maximum compensation for Grade 1 disability or USD66,000.

Payment is based on the exchange rate at the time of payment or in US Dollars at the option of the seafarer.  In case of death, the option belongs to the next of kin.  

2. Calibrated and Expanded List of Occupational Diseases (Section 36-B)

The new SEC has significantly broadened the scope of compensable illnesses, including:

• Infectious diseases (e.g., COVID-19, influenza)
• Cardiovascular and cerebrovascular events
• Mental and behavioral disorders (e.g., PTSD)
• Musculoskeletal disorders and occupational strain conditions

These conditions and the rest of the diseases and illnesses listed in Section 35-B are now paired with specific disability gradings (Grades 1–14 equivalents) depending on severity.  The SEC moves from a relatively limited disease framework to a more comprehensive, medically detailed classification system.

3. Clear Third Doctor Procedure and Strengthened Disability Grading Framework (Section 24.A)

The new SEC has incorporated provisions of the Magna Carta of Filipino Seafarers on the third doctor procedure and in strengthening the disability grading framework.

As to the appointment of a third doctor, the now Section 24.A.5 of the SEC states that a seafarer who disagrees with the company-designated physician's final assessment may obtain a second medical opinion from his chosen doctor who specializes in the illness or injury. If the seafarer's doctor issues a disability grading that is different or contrary to the medical findings of the company-designated physician, the seafarer must file a written request with the DMW to refer the conflicting medical grading to a third doctor.

The third doctor will be mutually selected by the parties from a pool of Department of Health (DOH)-accredited medical specialists relevant to the injury or illness of the seafarer. In case of inability to appoint a third doctor, the DMW shall facilitate the appointment of the third doctor from the same pool.

The third doctor shall determine the final disability grading which shall be binding upon the parties. This process is mandatory before any arbitration proceeding or case may be filed, when the issue is the disability grading, fitness to work, or the illness or injury of the seafarer.

To strengthen the framework of disability grading, the medical assessment of the company designated physician, seafarer’s doctor, and the third doctor shall strictly adhere to the Schedule of Disabilities as provided in Section 36 (Schedule of Disability or Impediment for Occupational Injuries Suffered or Occupational Illnesses Contracted) or the applicable CBA, as warranted. (Section 24.A.9)

To compliment the strengthening of the disability grading framework, the now Section 36 B further states that disability compensation shall not be measured or determined by the number of days a seafarer is under treatment or the number of days in which sickness allowance is paid.

4. Reinforced Role of CBA Arbitration Mechanisms (Section 33.A)

The SEC strengthens the use of Collective Bargaining Agreement (CBA) dispute mechanisms and the parties are mandated to strictly adhere to the provisions of the CBA on the manner of selection and appointment of the Voluntary Arbitrators or Panel of Voluntary Arbitrators who are listed in the CBA.  

5. Expanded Definition of Beneficiaries (Incapacitated Children) (Section 24.B.1)

In entitlement to additional death benefits, the SEC, aside from children under 21 year of age, now includes those above said age with the qualification that they are unable to care for themselves due to physical or mental incapacity.

Other Changes introduced in the SEC

Abandonment (Section 2.1)

The SEC now provides for the definition of abandonment, which exists where the shipowner fails to fulfill fundamental obligations, including non-payment of wages for at least two (2) months, failure to arrange repatriation, or failure to provide basic support such as food, accommodation, and medical care. This formal definition is significant because it establishes a triggering mechanism for claims, effectively allowing seafarers to invoke abandonment as a contractual breach with corresponding entitlements, thereby strengthening enforcement against prolonged non-compliance and increasing the risk exposure of principals and manning agencies.

Allotments (Section 2.3 in relation to Section 10.B)

The SEC, in accordance with the IRR of the Magna Carta of Filipino Seafarers revises the computation of allotments by redefining and providing a broader base upon which the mandatory remittance is calculated. It now requires that allotments be at least eighty percent (80%) of the seafarer’s monthly salary, expressly defined to cover basic wage plus fixed or guaranteed overtime, rather than basic wage alone.

Pre-existing Illness (Section 2.28 in relation to Section 3.B.6)

The SEC has now slightly modified the definition of pre-existing illness as:

•  An illness existing prior to the commencement of the contract where a doctor has diagnosed and prescribed treatment for said condition, or,
•  A pathological abnormality suffered by the seafarer prior to the conduct of a PEME and such condition cannot be diagnosed during the PEME.

The SEC has now expressly made it a duty on the part of the seafarer to disclose a pre-existing illness or condition in the PEME.

Work-related Death (Section 2.34)  

SEC has now defined work-related  death as death of the seafarer from work-related injury or illness occurring between the date of commencing duty and the date upon which they are deemed duly repatriated, or arising from their employment between those dates.  This was lifted from the Magna Carta of Filipino Seafarers.

Work-related injury (Section 2.36)

SEC has now defined work-related injury as those resulting to disability or death of the seafarer occurring between the date of commencing duty and the date upon which they are deemed duly repatriated, or arising from their employment between these dates.  This was lifted from the Magna Carta of Filipino Seafarers.

New and expanded duties of employer (Section 3.A)

The SEC, incorporating the provisions of the Magna Carta of Filipino Seafarers, has introduced new and expanded duties of the employer in the now Section 3.  They are:

Access to Information – The employer must provide relevant information to the seafarer (refers to the information, including the terms and conditions of employment, company policies affecting seafarers, and conditions and realities attending to their profession, that must be readily available, accessible and furnished to the seafarer upon proper request), including medical records.

Financial Security for Abandonment and Claims - Employer must maintain expeditious and effective financial security system in the event of their abandonment and to assure compensation for contractual claims.

Next-of-Kin Notification – it is the duty of the employer to immediately inform the seafarer’s family / next of kin in case of critical incidents and to furnish them with copies of reports, actions taken and plan regarding remedies, mitigation or repatriation. The duty to inform the next-of-kin is also applicable in case seafarer has any incident that requires a doctor’s medical attention.

Anti-Harassment / Anti-Bullying / Anti-Discrimination Policy – Employer must adopt policies to prevent harassment, bullying and discrimination and to establish complaint mechanisms and reporting procedures.

Free Passage from the Point of Hire to the Port of Embarkation (Section 5)

Seafarers shall be accorded the rights to safe passage and safe travel.

To this end, the shipowner shall:

1.Inform the seafarer about the possible hazards of the voyage and the ports of call;

2.Advise about the precautions to be taken; and

3.Issue the necessary documents.

Wages (Section 8)

The SEC has included a provision on the continuity of wages and entitlements during periods of captivity of a seafarer. Section 8 provides that, in cases involving piracy, armed robbery, war-related violence, or other forms of detention of the ship, the seafarer’s wages and related benefits—including allotments—shall continue to be paid for the entire duration of captivity until release and repatriation. This was previously contained in the POEA Memorandum Circular No. 34, Series of 2020.

Also, the seafarer who is abandoned by the employer shall be entitled to full payment of wages and other benefits provided under the employment contract or the CBA.

Lastly, the SEC prohibits deductions from seafarer’s wages without the seafarer’s prior written consent.

Hours of Work (Section 12)

The SEC now follows the Magna Carta of Filipino Seafarers’ guidelines on hours of work which in turn follows the MLC guidelines.

Leave Pay (Section 14)

The now Section 14 of the SEC clarifies that the following should not be counted as part of annual leave with pay:

1. periods of incapacity for work resulting from illness or injury or from maternity, under conditions as determined by the competent authority or through the appropriate machinery in each country;
2. temporary shore leave granted to a seafarer while under an employment agreement; and
3. compensatory leave of any kind, under conditions as determined by the competent authority or through the appropriate machinery in each country.

Subsistence (Section 16.B)

In keeping with the MLC, the SEC mandates the employer to provide the seafarer with food and drinking water of appropriate quality, nutritional value, and quantity, taking into consideration the differing cultural and religious backgrounds of the seafarers on board the ship. The food, drinks, and the preparation thereof shall be in accordance with the MLC 2006, local laws, rules and regulations and international standards.

Accommodation and Recreational Facilities (Section 17)

The SEC has introduced a new provision in the SEC on accommodation and recreational facilities in line with the MLC and the Magna Carta of Filipino Seafarers.  The provision provides:

1. The seafarer on board a ship shall be provided with safe, decent, and adequate accommodations, including but not limited to recreational facilities, for seafarers that meet the minimum standards set out in MLC 2006, taking into account the need to protect the health and well-being of seafarers working or living on board the ship, or both. There shall be a basic shipboard facility for women, such as separate sleeping rooms and appropriate and sufficient menstrual hygiene products and means of disposal.
2. The seafarer shall be provided with reasonable access to ship-to-shore telephone communications, email and internet facilities, where available, especially during his/her free time or when he/she is not on duty.
3. Access to communication during critical incidents, such as but not limited to maritime accidents, warlike incidents, piracy, injuries, detention, and complaints on board, shall be provided by the shipowner to the seafarer, as may be practicable.

Medical Care On Board Ships and Ashore and Health and Safety Protection and Accident Prevention (Section 18)

Another new provision introduced in the SEC is with respect to medical care, health and safety.  These again are largely due to the MLC and the Magna Carta of Filipino Seafarers.  The provision requires the employer to:

1. Provide adequate medical facility, equipment, paraphernalia, medical supplies, and medicines on board, and shall ensure access to shore medical facilities, including mental health services for seafarers, as well as corresponding medical or trained personnel who shall provide first aid and medical care.
2. Supply the medicine chest and its contents, including, but not limited to, the common emergency and maintenance medications prescribed by licensed physicians to seafarers during Pre-Employment Medical Examination (PEME), the medical equipment, and the medical guide on board shall be maintained and inspected regularly to ensure that labelling, expiry dates, and conditions of storage of all medicines and the directions for their use are checked, and all equipment are functioning properly.
3. Ensure that the seafarer shall have access to medical care, including assessment, counselling, psychotherapy and other forms of mental health intervention in relation to the treatment of any mental or behavioral disorder; necessary medicines; therapeutic appliances; board and lodging away from home until the seafarer has recovered, for any illness or injury, hospitalization, and dental treatment until the sick or injured seafarer has recovered or until the sickness or incapacity has been declared of a permanent character. The medical care shall be at no cost to the seafarer.
4. Employers shall institute measures on health emergency prevention in accordance with flag state health regulations and World Health Organizations (WHO) guidelines, including necessary disinfection, decontamination, deratting, or other measures necessary to prevent the spread of infection or contamination, which may include, but not limited to, the conduct of disease surveillance activity.
5. Where access to shore-based medical facilities is limited, employers shall ensure reasonable access to duly licensed health facilities for telemedicine and tele-mental health services to Filipino seafarers.

Transfer Clause (Section 19)

The amendment introduced in the new SEC is that the transfer of the seafarer must now be with the consent unlike in the old contract where the consent of the seafarer to the transfer was already pre-determined when the seafarer signs the contract.

Grievance Machinery (Section 20)

The grievance machinery under the new SEC is significantly strengthened compared to the 2010 contract. While the old SEC merely provided a basic onboard complaint mechanism, the new SEC formalizes the process into a structured, documented system that generally should be exhausted before disputes are elevated to arbitration or litigation.

Disciplinary Procedures (Section 21)

The new SEC maintains the old provision on the disciplinary procedure against an erring seafarer with the only change that where the disciplinary proceedings are to be initiated against the Master/Skipper of the vessel, the officer next-in-rank shall have the duty and responsibility to comply with the listed procedures.

Termination of Employment (Section 22)

The new SEC has retained the previous provision on termination of employment with the following additions:

1. A seafarer’s contract is terminated when he signs off due to medical reasons and after an illness and he is declared fit to work, the employer is unable to find employment for him on board the ship or on another ship of the shipowner.
2.   In case of voluntary resignation, there is now a need for the seafarer to serve a written notice to the employer at least one (1) month prior to the intended date of resignation, subject to exemptions provided by law.

Repatriation (Section 23)

The general rule is that seafarer shall be repatriated to the point of hire.  The SEC has now added as an exception the following circumstances:

-When the seafarer is incapacitated during the time of repatriation, the seafarer has the option to be repatriated to his place of address as stated in the contract;

-When the seafarer dies, the option for the remains to be repatriated to the point of hire or home address of the seafarer as reflected in the contract belongs to the next-of-kin;

-When the parties mutually agreed on a specific place in the Philippines.

Also, instead of the 72 hours reporting period of the seafarer to the manning agent it is now within three (3) working days upon arrival at point of hire.

Further, in case of an epidemic or pandemic declared by the World Health Organization (WHO), the employer shall be responsible for medical care expenses and board and lodging for periods spent by seafarers in self-isolation or quarantine, whether or not the seafarers have symptoms, have been exposed or are quarantined as a safety precaution for the community, until the seafarers have been duly repatriated to the point of hire.  

Repatriation expenses shouldered by the employer was also specifically provided to include:

1.Basic pay and allowances from the moment the seafarers leave the ship until they reach the repatriation destination;

2.Accommodation and food from the moment the seafarers leave the ship until they reach the repatriation destination;          

3.Transportation charges, wherein the default mode of transport should be by air;

4.Deployment cost of the shipowner; and

5.Immigration fees, fines, and penalties.

A waiver of entitlement to repatriation shall be valid only if it is written, and made freely and voluntarily, with full knowledge of its consequences. When a seafarer is abandoned, held captive on or off the ship as a result of acts of piracy or armed robbery against the ship, or is incapable of traveling due to illness, injury or incapacity, or other causes that affect the seafarer’s safety and security, no waiver shall be allowed or presumed.

In case of the employer’s failure to fulfill their obligations on repatriation, the DMW and Overseas Workers Welfare Administration (OWWA) will shoulder the repatriation cost subject to reimbursement from those primarily responsible for the repatriation. Imposition of administrative sanctions by the DMW against those primarily responsible may also be made.

War/High Risk Zone (Section 25)

Under the SEC, the war, warlike, and high-risk area provisions introduce several new elements not found in the 2010 SEC. Section 25 now provides that declared war or high-risk areas may be identified not only by the DMW but also based on advisories from the DFA and internationally recognized bodies such as the ITF/IBF, thereby broadening the basis for classification. More significantly, the provision expressly grants seafarers the right to make an informed decision on whether to proceed to such areas, requiring the employer to disclose voyage risks and corresponding entitlements prior to passage. If a war-risk situation arises during the contract, the seafarer is given the right to refuse sailing into the area without discrimination or prejudice to current and future employment, coupled with the employer’s obligation to ensure immediate and safe repatriation. The SEC also mandates that, where deployment to a war-risk area is already known at the time of engagement, the seafarer’s written consent must be secured and appended to the contract for DMW approval.

Recognition of Mental Health (Section 18)

Section 18 of the SEC expands the obligations on employers with respect to medical care, particularly through the express recognition of mental health services as part of the employer’s duty. It provides that the shipowner must ensure access not only to conventional medical treatment—such as medicines, hospitalization, and board and lodging until recovery—but also to mental health care, including assessment, counselling, psychotherapy, and other forms of intervention for mental or behavioral disorders. The provision further requires that such medical care be provided at no cost to the seafarer and extends access even where shore-based facilities are limited by mandating the availability of telemedicine and tele-mental health services. This is a notable development, as it formally integrates mental health into compensable and employer-funded care, thereby expanding the scope of potential claims beyond physical injury or illness and reinforcing the employer’s continuing responsibility for both the physical and psychological well-being of seafarers.

Social Media Restriction (Section 3.B.10)

The SEC introduces a new restriction on the digital conduct of seafarers by expressly regulating the use of social media and other forms of communication. It requires that seafarers refrain from posting or transmitting any unauthorized information that may disclose vessel location, voyage plans, operational details, or maritime incidents prior to official release, as well as any content that may compromise maritime safety, security, or commercial interests.

Gender-Sensitive Provisions (Section 3.A.9 and 10)

The SEC likewise incorporates explicit gender-sensitive and anti-discrimination protections, marking a shift toward a more inclusive regulatory framework. Under Section 3, employers are required to adopt policies that protect seafarers against discrimination, harassment, and bullying, including the conduct of gender sensitivity programs and the establishment of safe complaint mechanisms. Complementing this, Section 17 mandates the provision of gender-appropriate accommodation on board, including separate sleeping facilities for women and the availability of menstrual hygiene products and proper disposal systems.

Applicable Law (Section 35)

The SEC has now recognized the fundamental principle that parties to the individual employment contract are allowed to stipulate and mutually agree to other terms and conditions over and above the minimum standards; provided, that the stipulations are mutually beneficial to both parties and are not contrary to law, public policy and morals..

Table of Offenses and Corresponding Administrative Penalties (Section 37)

The SEC expanded the list of offenses and now includes the following: (a) submitting, furnishing, or using false material information or documents or any form of gross misrepresentation for the purpose of job application or employment; (b) other forms of misrepresentation relative to the overseas employment of seafarer; (c) sexual assault, rape, murder, acts of terrorism, and other heinous crimes; (d) unjustified breach of employment contract by the seafarer; (e) gross violations of LMA policies and regulations; (f) conviction for violation of the Anti-Violence Against Women and Children Act (RA 9262) or any other relevant laws involving gender-based violence; and (g) violation of the Code of Discipline for seafarers.

The penalties for the above enumerated offenses would be reprimand or warning, dismissal and payment of cost of repatriation.

Looking Ahead: Implementation and What to Watch

We will continue to monitor developments closely and provide further updates as additional issuances, guidelines, or implementing rules are released by the Department of Migrant Workers. At this stage, while the SEC outlines significant structural and substantive changes, the manner of its final implementation—including transition arrangements, effectivity, and alignment with existing CBAs and industry practices—will be critical in determining its full impact on claims handling and operational compliance. Clients are encouraged to stay apprised of these developments as the framework evolves.

For full copy of the DMW Department Circular No. 07 series of 2026, please see the downloads page on our website or click

https://www.delrosariolaw.com/en/e-library/downloads

Areas of Specialization:  Labour & personal injury, litigation and dispute resolution, corporate and commercial, shipping and admiralty, intellectual property, cargo claims and charter party, transport, insurance and reinsurance, arbitration and ADR, immigration.