Philippine Businesses Should Timely Release Final Pay

APRIL 02,2025

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MANILA, Philippines — Employers across the Philippines must ensure the timely release of final pay to separated or terminated employees in compliance with labor laws, an aspiring party-list group emphasized on Wednesday.

The Trabaho Party-list underscored the importance of adhering to the Department of Labor and Employment (DOLE) Labor Advisory No. 06, Series of 2020, which mandates that employees’ final pay should be released within 30 days from their official departure date.

Philippine Businesses: What Should Be Included in the Final Pay?

According to DOLE regulations, the final compensation package must include:

• Outstanding salaries
• Unused leave credits
• 13th-month pay
• Other entitled benefits under company policies or labor laws

Atty. Mitchell-David Espiritu, spokesperson for the Trabaho Party-list, warned that delayed salary releases can cause significant financial strain on workers.

“Failure to comply not only deprives workers of their hard-earned money but also exposes companies to legal consequences,” Espiritu stated.

Delayed Final Pay: A Growing Issue Among Philippine Businesses

The DOLE Central Visayas office previously flagged reports from employees claiming that their final pay had been withheld for two to three months, or in some cases, even longer, despite already securing company clearance.

Former DOLE Central Visayas regional director Salome Siaton reiterated that separated workers must receive their final compensation within 30 days, regardless of the reason for their termination.

“Klaro na ‘yan (That’s very clear),” Siaton emphasized, referring to the advisory that serves as a clear guide for both employers and employees.

Call for Stricter Enforcement of Labor Laws

The Trabaho Party-list also called for better enforcement of labor laws and stricter penalties for businesses that consistently fail to meet their obligations to workers.

“Employers should have transparent policies for releasing final pay, and employees should be proactive in ensuring a smooth settlement process,” Espiritu advised.

Why Timely Final Pay Matters

Delayed payouts can lead to financial distress, especially for workers relying on their last paycheck to cover urgent expenses. Moreover, a culture of non-compliance negatively affects the broader workforce, eroding trust and employee morale.

By ensuring on-time salary releases, businesses not only comply with labor laws but also foster a positive workplace reputation and strengthen employee relations.

Final Thoughts

If you’re an employee waiting for your final pay beyond the 30-day period, it’s essential to know your rights and escalate concerns to DOLE if necessary. Likewise, companies should establish efficient payroll systems to ensure timely disbursement and avoid potential legal repercussions.

For more labor law updates and workplace rights information, stay tuned to our latest posts! NOWTREND

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