Back Pay Philippines

Dear Attorney,

I need legal advice regarding my back pay. I worked for a company for 7 months, but after resigning, I haven't received any back pay, despite being promised one. When I try to communicate with my employer through chat, they don't respond. How can I ensure that I get what I’m owed?

Sincerely,
An Employee with Unpaid Back Pay

Insights

In the Philippines, the concept of "back pay" generally refers to the final compensation due to an employee upon resignation, termination, or end of contract. Back pay typically includes unpaid salary, unused leave credits, 13th-month pay, and other benefits the employee may be entitled to, based on the labor laws of the country.

Legal Basis for Back Pay

The Labor Code of the Philippines provides the legal foundation for the timely payment of final wages. Article 297 of the Labor Code (formerly Article 283) governs back pay. When an employee resigns or is terminated, their employer is mandated to release the final pay within 30 days after separation, unless otherwise specified by company policy or an agreement between the employee and the employer.

Final pay encompasses the following:

1. Unpaid Wages: Any salary or wage for work already rendered.
2. Pro-rated 13th-Month Pay: For employees who haven't completed the full year, they are still entitled to a proportionate 13th-month pay.
3. Unused Leave Credits: If the employee has accumulated leave days, these should be converted into monetary value and included in the final pay.
4. Other Benefits: Depending on company policy, this may include performance bonuses, separation pay (if applicable), and allowances.

What to Do If Back Pay is Withheld

If an employer does not release the back pay within the 30-day period, the employee has several options:

1. Formal Demand: The employee can send a formal demand letter to the employer, outlining their legal rights to back pay under the Labor Code and requesting payment.
2. Filing a Complaint: If the employer fails to respond or refuses to release the back pay, the employee may file a labor complaint with the Department of Labor and Employment (DOLE) or the National Labor Relations Commission (NLRC). These institutions have jurisdiction over labor disputes involving employee compensation, including withheld final pay.
3. Small Claims Court: If the amount owed qualifies under the small claims procedure, the employee may file a case with the appropriate court for recovery of unpaid wages.

Importance of Written Communications

To protect their rights, employees should ensure that they maintain written records of all communications with their employer, including resignation letters and any discussions about final pay. This documentation can serve as evidence in case legal proceedings become necessary.

If an employer is ignoring communication attempts, the employee should escalate the matter through legal channels, particularly if informal discussions or chats are unsuccessful in resolving the issue.