Dear Attorney,

I would like to inquire if an agency has the legal right to withhold an employee's salary, especially if the employee has not committed any serious offense or signed any document permitting a salary deduction. Is this allowed under labor laws in the Philippines?

Sincerely,
Concerned Employee

Insights

Under Philippine law, the right to receive wages is a fundamental right protected by the Labor Code of the Philippines. The withholding of wages, also known as "non-payment of wages," is strictly regulated.

Legal Provisions on Withholding Salary

Article 116 of the Labor Code prohibits withholding or delaying wages without legal justification. Employers are required to pay the full wage of the employee for work rendered. The only exceptions are when there are lawful deductions such as for Social Security System (SSS) contributions, taxes, or in situations where there is a court order or collective bargaining agreement permitting deductions.

When Salary Deductions Are Allowed

Employers can only deduct amounts from an employee’s wages in the following instances:

Authorized deductions required by law, such as SSS, PhilHealth, or Pag-IBIG contributions.
Written agreements between the employer and the employee allowing specific deductions (e.g., salary loans or advances).
Court orders requiring the deduction of wages.

Any deductions or withholding that are not supported by law or agreed upon in writing are illegal.

Penalties for Illegal Withholding

If an employer unlawfully withholds wages, employees may file a complaint with the Department of Labor and Employment (DOLE). DOLE has jurisdiction over wage disputes, and the employer may face penalties, including fines and possible imprisonment, depending on the severity of the violation.

In the absence of a valid reason or legal basis, the withholding of an employee's salary constitutes a violation of labor rights. Employers who violate this right can be held liable for unpaid wages, damages, and attorney's fees.

In summary, without legal justification, an employer in the Philippines cannot withhold an employee’s salary, and employees are entitled to receive their full wages for the work rendered. If there is any dispute regarding this, the employee may seek recourse through DOLE.