Final pay of employees
The Department of Labor and Employment (Dole) disclosed last week that the failure of employers to release the final pay of their employees on time was at the top of the list of the complaints it received in 2025.
The Dole reminded employers that employees whose employment is terminated, regardless of the cause, must be given their final pay within 30 days from the termination, unless the employer has a better policy. And if the employee requests a certificate of employment, the employer is obliged to provide it not later than three days after the request was made.
Incidentally, that certificate is essential if the employee plans to get employment elsewhere, or in case any issues may arise about his or her right to claim some benefits from the Social Security System.
Note that if the cessation of employment is due to retirement and the employer has a retirement program, the terms and conditions of that program shall be applied.
If there is none and the employee has reached age 60 years or more—but not beyond 65 (which the Labor Code declares as compulsory retirement age) and has worked for at least five years—the retiree is entitled to a retirement pay equivalent to at least 15 days’ pay for every year of service. A fraction of at least six months shall be considered as one whole year.
Some companies with collective bargaining agreements give employees who resign after being employed for, say, five years, the same benefits that would otherwise accrue from retirement.
Aside from the separation or retirement pay, the Dole advised employers that the final pay also includes, among others, any unpaid salary, the cash equivalent of unused sick or vacation leaves, pro rata 13th-month pay and cash bonds or other deposits that the employee may have made as part of his or her employment.
By and large, saying goodbye to one’s employment, especially if it was the first job and the employment period was quite long, is often emotion-filled and receipt of the final pay formally ends that phase of a person’s life.
Yet, the delay in the release of the final pay may sometimes be attributed to disagreement between the employer and employee on the computation of unused leaves, liquidation of cash advances, settlement of accountabilities and refusal of the employee to sign a release and quitclaim.
Except for the last item, the rest of the causes for the delay can be easily resolved by reviewing the notes or records of the employee and the employer.
The refusal to sign a quitclaim may be motivated by a desire to spite the employer for personal reasons or a silent plan of the exiting employee to later sue the employer for additional monetary benefits.
The employer cannot be faulted for demanding that the employee sign a quitclaim written in a language that the employee is familiar with before the final pay is released.
The gist of the claim is principally that, with the receipt of the final pay, the employee has no further claims or causes of action against the employer arising from his or her employment.
In other words, he or she has cut clean and fair and square from the employer-employee relationship.
Somehow, the quitclaim is an assurance to the employer that if the employee later says that he or she did not receive the final pay that is due and owed to him or her under the law or company policy, the quitclaim would belie that claim.
To forestall any possible imputation of force or intimidation as the reason for signing the quitclaim—especially if the employment breakup is not harmonious—it has become common practice for the signing of the quitclaim by the employee and the witnesses, and its notarization, to be recorded through the ubiquitous cellphone.
Between the bare assertion of involuntary signing of the quitclaim and the record of its signing, the latter would no doubt be a more credible proof of the true situation and, therefore, make it difficult to invoke the claim that “all doubts must be resolved in favor of labor.”
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