Dear Attorney,

I would like to ask for your assistance regarding my backpay from my previous job. My employment ended a while back, but I have yet to receive the backpay I am owed. I’m unsure about the legal steps I can take to recover it. Could you advise on what actions I should take to address this issue and how long it might take to resolve?

Thank you.

Concerned Employee

Insights

In the Philippines, employees who resign or are terminated from their employment are entitled to receive their final pay, commonly referred to as "backpay." This includes unpaid salaries, benefits, and any other amounts owed, such as accrued leave credits, 13th-month pay, or prorated bonuses.

The law mandates that backpay should be released within a reasonable time after the employee's separation from the company. However, there is no specific provision in the Labor Code that clearly states the exact number of days within which the employer must release the final pay. Based on common practice and Department of Labor and Employment (DOLE) advisories, the period is typically within 30 days.

To address delayed backpay, the following steps can be taken:

Send a formal demand letter: The first step is to notify your previous employer about the delay in releasing your backpay. A demand letter serves as a formal request for payment and could resolve the issue without the need for litigation.
Filing a complaint with DOLE: If the employer fails to respond or refuses to release the backpay, you may file a complaint with the DOLE. This can trigger mediation between you and your employer to settle the matter.
Labor Arbitration: Should DOLE intervention fail, filing a case before the National Labor Relations Commission (NLRC) is the next step. This is applicable in situations where the amount involves wage-related claims and there’s non-compliance by the employer.

It is important to note that while small claims courts are an option, they should be considered only if the case does not involve complex employer-employee relationships, as labor disputes typically fall under the jurisdiction of DOLE or the NLRC.

Statutory Rights and Recourse

Under Article 116 of the Labor Code, withholding of wages without valid cause is illegal. If the backpay constitutes part of your earned salary or benefits, an employee has the right to recover these under existing labor laws. Furthermore, if the employer unjustly delays the release of wages, employees may seek additional compensation or interest for the delayed payment.

Ensuring timely communication with your employer is crucial, and consulting with a lawyer will help determine the best legal course based on the specifics of your situation.