Legality of Withholding Wages During a 60-Day Resignation Notice in the Philippines
(Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. For specific legal concerns, always consult a licensed attorney or the Philippine Department of Labor and Employment (DOLE) or other relevant government agencies.)

1. Overview of Resignation Under Philippine Labor Law

In the Philippines, an employee has the right to resign from work at any time, subject to the requirement of serving due notice to the employer. Under Article 300 (previously Article 285) of the Labor Code of the Philippines, an employee who intends to resign must serve a written notice at least thirty (30) days in advance before the effective date of resignation. This allows the employer reasonable time to look for a replacement or to transition responsibilities smoothly.

Although the Labor Code specifies a 30-day notice, it is relatively common for employment contracts, company policies, or collective bargaining agreements (CBAs) to stipulate longer notice periods, such as 45 days or 60 days. These extended notices are generally enforceable, provided that:

They are clearly stated in a company policy or individual employment contract; and
Both parties have freely agreed to these terms.

Thus, a 60-day resignation notice can be a valid requirement if it is part of an employee’s contract or an established company policy.

2. Right to Wages and Prohibition Against Unlawful Deductions

2.1 General Rule on Payment of Wages

Wages refer to the remuneration or earnings an employee receives in exchange for work or services rendered. Philippine labor laws place a high premium on the prompt payment of wages. Under Article 103 of the Labor Code, wages must be paid at least once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.

2.2 Prohibition on Withholding Wages

Article 116 of the Labor Code (in its renumbered form) explicitly prohibits the withholding of any part of an employee’s wages except for:

Deductions authorized by law, such as SSS, PhilHealth, Pag-IBIG contributions, and taxes;
Deductions with the employee’s written consent for specific purposes (e.g., loan repayments to the company); or
Deductions arising from court orders, such as garnishment.

Outside these specific exceptions, employers are generally not allowed to withhold wages from an employee.

3. Withholding Wages During the Notice Period

3.1 Is it Legal to Withhold Wages Pending Completion of 60-Day Notice?

As a rule, withholding wages to force an employee to serve the full 60-day notice is not permitted. Even if an employee is contractually bound to provide a 60-day notice, an employer cannot simply suspend or withhold wages for work already rendered. The critical point in labor law is that:

An employee must be paid for all hours worked, regardless of any disputes related to resignation notice requirements.

If an employee continues to perform work during the notice period, that employee must be paid according to the agreed pay schedule (e.g., weekly, semi-monthly, or monthly), following the Labor Code requirements on wage payment intervals.

3.2 Possible Deductions from Final Pay

Even though wages for ongoing work cannot be withheld, certain deductions from the final pay (the last pay an employee receives upon separation) may be permissible:

Unreturned company property. If the employee fails to return company property (such as a laptop, uniforms, tools, etc.), the employer may make deductions from the final pay to cover the cost of these items, provided there is due process and the employee acknowledges the unreturned items or liability.
Authorized salary loans or cash advances. If the employee has an outstanding loan or cash advance from the company, the remaining balance can be deducted from the final pay as long as there is a written agreement permitting such deduction.
Training bonds (if validly executed). If there is a training agreement stipulating that the employee must reimburse the cost of training if they resign within a certain period, the employer may offset that amount against the final pay, provided the agreement is valid under Philippine law and the employee’s consent to the deduction is on record.

Important note: Any deductions still must comply with the Labor Code restrictions, particularly the principle that deductions must be lawful, adequately documented, and (where necessary) with the employee’s consent.

4. Enforcing a 60-Day Notice Requirement

4.1 Employee’s Obligation to Serve the Agreed Notice Period

If an employment contract or company policy requires a 60-day notice, an employee who disregards this obligation may be held liable for damages if the employer can prove that the lack of proper notice caused it specific losses (e.g., business disruptions, additional expenses for a rush hiring process, etc.). However, in practice, proving actual damages in court can be challenging.

4.2 Employer’s Recourse for Breach of Notice Requirement

An employer’s primary legal remedy for an employee’s failure to comply with the notice requirement is to file a civil case for damages. But in many instances:

The cost of litigation may outweigh the actual damages.
Courts typically require substantial proof of actual and compensable damage.

Because of these hurdles, many employers instead rely on company clearance procedures and withholding the release of final pay until the employee returns all company property and settles any outstanding liabilities. This is different from withholding wages for work performed. The company may hold off on final settlement (after the last day of work) until the employee has completed clearance, but it cannot withhold wages for days already worked during the notice period.

5. Best Practices for Employees and Employers

5.1 For Employees

Review your employment contract and company policies to confirm how many days’ notice you must provide.
Submit a formal resignation letter stating your intended last day of work, respecting the 60-day notice (if contractually obligated).
Coordinate with your HR department on any final obligations, including clearance procedures, return of company property, and settling any outstanding loans or advances.
Keep records of payslips and communications with HR to ensure you are paid for all the days you work.

5.2 For Employers

Ensure company policies on resignation (including extended notice periods) are properly documented and communicated to employees from the outset.
Do not withhold wages for work already performed. If an employee remains on the payroll during the notice period, follow the regular pay schedule.
Limit deductions to those authorized by law and, if necessary, ensure you have the employee’s written consent (for example, for training costs or loan repayments).
If an employee fails to comply with the notice requirement, evaluate whether filing a claim for damages is truly practical.
Upon the employee’s last day, facilitate the clearance process promptly so that the final pay and certificate of employment can be released in compliance with the Department of Labor and Employment’s guidelines (e.g., DOLE Labor Advisory No. 06-2020, which suggests releasing final pay within thirty (30) days from last day worked or date of clearance, whenever possible).

6. Consequences of Illegal Withholding of Wages

Employers who unlawfully withhold wages may face:

Administrative sanctions from the DOLE (e.g., imposition of penalties).
Civil liability to pay the employees the amount of wages withheld, plus legal interest, and, in some cases, moral or exemplary damages if malice or bad faith is proven.
Criminal liability, if the withholding amounts to a willful refusal to pay wages (which can, in rare instances, lead to prosecution under Articles 288-289 of the Labor Code or under general provisions of the Revised Penal Code if it constitutes estafa or similar offenses).

7. Key Takeaways

A 60-day notice requirement is valid if clearly stipulated in a contract or company policy.
Wages cannot be withheld to force compliance with a resignation notice period. Employees must be paid for days actually worked.
Employers can lawfully make deductions from the final pay for unreturned property, outstanding loans, and validly executed training bonds, subject to due process.
If an employee breaches the notice requirement, the employer’s remedy is generally to seek civil damages, though this is seldom pursued unless substantial losses are proven.
DOLE guidelines emphasize timely payment of final wages and strict limits on wage deductions.

In summary, while employers can lawfully require a 60-day resignation notice if it is part of an agreed contract or policy, they generally cannot withhold wages for days the employee has already worked as a means to enforce compliance with that notice. Both employees and employers benefit from upholding clear, written policies on notice periods, final pay settlements, and deductions, thereby avoiding disputes and potential legal exposure. Should any conflicts arise, the first step is typically to seek clarification or conciliation with the HR department, and if unresolved, the matter can be brought to the DOLE or handled through formal legal channels.