Dear Attorney,

I resigned from my job over five months ago, but I have yet to receive my final pay. I’ve followed up with my employer several times, but they keep giving vague responses. Is there a legal basis for this delay? What steps can I take to resolve this?

Concerned Former Employee

Insights

Under Philippine labor laws, an employee who has resigned or been terminated is entitled to receive their final pay. The final pay typically includes the following:

Unpaid salary - Compensation for any days worked but not yet paid.
Pro-rated 13th-month pay - Employees are entitled to receive the 13th-month pay pro-rated based on the time they worked in the calendar year.
Unused leave credits - Cash equivalent of unused vacation or sick leaves, depending on company policy.
Other benefits - Other payments stipulated in the employment contract, like bonuses, incentives, or commissions.

Legal Timeline for Final Pay Release

The Department of Labor and Employment (DOLE) in the Philippines has set guidelines that final pay should ideally be released within 30 days from the date of separation, unless a different timeline is agreed upon in the contract or company policy.

Legal Recourse for Delayed Final Pay

If an employer fails to release the final pay within the reasonable period, the employee has several options:

Demand Letter - Sending a formal demand letter to the employer requesting immediate payment of the final pay can prompt quicker action.
Filing a Complaint - If no response is given, the employee may file a complaint with the DOLE for non-payment of wages. The complaint process allows the employee to resolve the issue through mediation or arbitration.
Civil Suit - As a last resort, an employee may file a civil case for the recovery of unpaid wages, although this can be a lengthier and more expensive process.

DOLE's Role in Resolving Final Pay Issues

The DOLE offers assistance in facilitating the settlement of employment-related disputes. Employees can reach out to DOLE offices and file a complaint through the Single Entry Approach (SEnA), a mechanism designed to mediate disputes between employees and employers quickly.

Employers are obligated under the Labor Code to pay all due compensation promptly. Failure to comply can lead to penalties, such as being required to pay the amount owed with interest, in addition to damages or attorney’s fees, depending on the circumstances of the delay.

Employers must also ensure that delays in releasing final pay are justified, as unreasonable delays can be deemed a violation of labor standards and employee rights.