Dear Attorney,
I work for a company that has withheld one month of my salary. I recently requested an extension and agreed to continue working until the 10th of September, but they have yet to release the salary for my previous work rendered. Is it legal for the company to hold my salary under these circumstances?
— A Concerned Employee
Insights
In the Philippines, the issue of withholding salary is governed by several labor laws, specifically the Labor Code of the Philippines and relevant Department of Labor and Employment (DOLE) issuances.
Under the law, employees have a right to receive their salary on time, as compensation for services they have already rendered. This is guaranteed under Article 103 of the Labor Code, which mandates that wages be paid at least once every two weeks or twice a month at intervals not exceeding sixteen days. This means that employers are generally prohibited from delaying the payment of salaries beyond the prescribed period without legal justification.
In the scenario you described, the company’s act of holding your salary may not be lawful unless there is a clear and justified reason for doing so. Common justifications may include:
Incomplete Clearance: If your employment is ending or undergoing an extension, your employer may require you to complete an exit clearance process. However, holding your salary due to pending clearance is not automatically allowed. Under DOLE rules, if your work for a specific period has been completed, your salary for that period should be released, and other clearance issues should be handled separately. Any delay in the release of salaries based solely on clearance issues may be illegal.
Deductions or Disciplinary Actions: Employers can withhold part of your salary if there is a legitimate basis for deductions, such as payments for company property that hasn’t been returned, cash advances, or damages. However, they cannot withhold the entire salary unless the amount is significant enough to warrant this action. Even then, such deductions must be done in compliance with the Labor Code and company policies, and must be clearly communicated to you.
Extension of Employment: Your request for an extension to continue working until the 10th of September does not grant the employer any right to withhold your salary for services already rendered. The extension of your employment, assuming it's agreed upon by both parties, is a separate arrangement and should not affect the salary for the work already completed.
If the employer fails to release your salary without any valid justification, it may constitute a violation of your labor rights. You can take the following steps:
Communicate with your Employer: Try to resolve the issue by formally requesting the release of your salary, providing a written notice if necessary. This allows your employer to respond and clarify any misunderstandings.
File a Complaint with DOLE: If the employer refuses to release your salary, you may file a complaint with the DOLE for unfair labor practices or illegal withholding of wages. DOLE will typically mediate in such cases, and if necessary, order the employer to release the unpaid wages.
Legal Action: If the issue remains unresolved despite mediation, you may consider pursuing a small claims case in court for the recovery of the salary withheld. Under Philippine law, wage disputes can be brought to the appropriate courts for resolution, but most issues are settled at the DOLE level.
In summary, withholding of salary is generally prohibited unless supported by specific legal grounds. In your case, if the work has already been rendered and there are no valid deductions or disciplinary reasons, the withholding of your salary appears unjustified. You have the right to receive compensation for your labor, and your employer may be in violation of the law if they refuse to release your wages. Pursuing the matter through formal channels, beginning with communication, is advisable.