Dear Atty. Maan,

I resigned from my previous company last December but until now or almost 3 months later, I haven’t still received my final pay. Despite following up with the company, they keep telling me that it is still being prepared, even though I have completed all the necessary requirements. Can the company withhold my final pay for this long?

Jo

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Dear Jo,

As a general rule, employers are prohibited from withholding wages from employees. The Labor Code provides:

Art. 116. Withholding of wages and kickbacks prohibited. — It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s consent.

Further, Under Labor Advisory No. 06 Series of 2020 dated 31 January 2020, the Department of Labor and Employment directs that an employee’s final pay must be released within 30 days from the date of separation or termination of employment, unless there is a more favorable company policy, individual or collective agreement thereto.

While the instant recent Advisory directs that the employee shall receive his or her final pay within 30 days from the date of separation or termination in the absence of a more favorable company policy, individual or collective agreement for the employee relating to payment of final pay upon separation, the Supreme Court ruled in the case of Milan v. National Labor Relations Commission, G.R. No. 202961, [4 February 2015] that requiring clearances before the release of last payments to the employee is a standard procedure among employers, whether public or private. Clearance procedures are instituted to ensure that the properties, real or personal, belonging to the employer but are in the possession of the separated employee, are returned to the employer before the employee’s departure.

From the foregoing, after fulfilling all the required clearances, you have the right to request the immediate release of your final pay if the 30-day period has already lapsed. The company is obligated to provide your final pay within 30 days from your last date of employment, whether you were terminated by the employer or resigned voluntarily. This time frame, as stated by DoLE (Department of Labor and Employment), aims to strike a balance between the employer’s need to manage effectively and the employee’s right to receive timely payment.

Hope this helps.

Atty. Marie Antonette Baudi