When an employee resigns, employers often ask whether they may deduct the cost of personal protective equipment (PPE)—for example, safety shoes, hard hats, goggles, gloves, or reflective vests—from the employee’s “final pay” (also called back wages/last pay). In the Philippines, the short, practical answer is:

In most situations, you should not charge employees for PPE as a matter of policy and law—because PPE is generally an employer-provided occupational safety requirement. However, you may be able to deduct the value of unreturned reusable company property (including certain PPE items) from final pay only if strict legal and procedural requirements are met.

This article explains the legal framework, what is allowed and prohibited, and how to implement lawful deductions (if any) without triggering labor claims.

1) What counts as PPE, and why it matters legally

PPE is equipment worn to minimize exposure to hazards (e.g., helmets, safety shoes, gloves, eye/face protection, hearing protection, respirators, harnesses). It may be:

Consumable/disposable (e.g., masks, earplugs, disposable gloves, disposable coveralls), or
Reusable/returnable (e.g., hard hats, goggles, face shields, harnesses, respirators, safety vests in some settings)

This classification matters because disposable PPE is ordinarily a business/OSH compliance expense, while reusable PPE may be treated like company-issued property that must be returned upon separation.

2) The governing principles in Philippine labor law

A. Wages are protected; deductions are the exception

Philippine labor policy strongly protects wages. Deductions from wages (including amounts due in final pay) are generally prohibited unless they fall within recognized exceptions.

As a starting point, employers should assume: No deduction is allowed unless it is clearly authorized.

B. OSH framework: PPE is generally employer-provided and should not be charged to workers

Under Philippine occupational safety and health (OSH) rules, employers must provide a safe workplace and implement controls. PPE is typically part of employer compliance—meaning the cost of required PPE is usually an employer expense, not something passed on to employees.

That said, requiring employees to return reusable PPE that remains company property is different from charging them the cost of PPE as a condition of employment.

C. Final pay is still subject to lawful deduction rules

“Final pay” typically includes unpaid wages, prorated 13th month pay (if applicable), cash conversion of unused leave if company policy/contract provides it, and other earned amounts. While the Philippines commonly follows the practice that final pay should be released within a reasonable period after clearance, whatever the composition of final pay, the wage-protection rules on deductions remain relevant.

3) The key distinction: “PPE cost” vs. “unreturned company property”

Employers often use “PPE deduction” to mean one of two things:

Scenario 1 — Charging the employee for PPE the employer was supposed to provide

Examples:

Deducting the price of safety shoes issued as part of mandatory site safety
Deducting the cost of masks or gloves used on the job
Requiring employees to “buy” PPE through payroll deduction as a standard practice

This is high-risk and often improper, because PPE for compliance is generally an employer obligation and wage deductions are tightly regulated.

Scenario 2 — Deducting the value of reusable PPE that is company property and was not returned

Examples:

Employee received a company-issued harness and did not return it
Employee was issued a hard hat and goggles logged as returnable property and refuses to return them

This can be lawful in limited circumstances—but only if you do it correctly.

4) When a deduction for PPE-related items is more likely to be allowed

A deduction tied to PPE is most defensible when all of the following are true:

The item is genuinely company property (not a benefit granted to the employee as personal property), and it is returnable.
There is clear documentation that the employee received the specific item (issuance log, acknowledgement form, property accountability form).
There is a clear separation/clearance process where return is requested and the employee is given a fair chance to comply.
There is a clear, written and voluntary authorization for deduction, or a basis recognized by law (and the authorization is not obtained through coercion).
The amount deducted is reasonable and properly computed (e.g., net book value, depreciated value, fair replacement cost—not punitive).
Due process is observed: the employee is informed of the shortage/non-return and is allowed to explain/contest.
You are not using the deduction to force a quitclaim or to “hold hostage” final pay beyond what’s reasonable.

Even then, a safer approach is to demand return/payment separately rather than automatically deducting from wages—unless your paperwork and process are strong.

5) When PPE deductions are likely unlawful or vulnerable to complaint

A PPE-related deduction is likely improper if:

It is a standard policy to charge employees for mandatory PPE required by safety rules.
The PPE is consumable/disposable or is consumed in the ordinary course of work.
The PPE is lost/damaged due to normal wear and tear, or due to workplace conditions outside employee fault.
The employer requires a deposit, cash bond, or automatic withholding for potential PPE loss (Philippine labor rules generally disfavor deposits for loss/breakage).
There is no signed acknowledgement that the employee received the item and agreed to be accountable under defined conditions.
The deduction amount is inflated, punitive, or not supported by valuation.
The employer uses the deduction to delay final pay indefinitely or to compel the employee to sign a release.

6) Written authorization and “voluntariness”: what employers often get wrong

One of the biggest failure points is paperwork that looks like authorization but is legally weak.

A valid authorization should be:

Specific (identifies the property, the valuation method, and the circumstances triggering liability),
Freely given (not signed under threat of non-release of wages beyond what’s legally justifiable),
Consistent with law and policy (you can’t authorize something illegal via a form),
Supported by evidence (issuance records, return logs, notices).

Blanket clauses like “I authorize the company to deduct any amounts due” are riskier than itemized, event-based authorizations.

7) How to compute a fair PPE-related deduction (if any)

If deduction is justified (e.g., unreturned reusable PPE), compute conservatively:

Preferred methods

Depreciated value / net book value based on internal asset schedule
Replacement cost only if reasonable and documented, and if depreciation is not applicable
Market value (for older items) if replacement cost is excessive relative to actual value

Avoid

Charging brand-new replacement price for old, used equipment
“Penalty” charges
Deductions not supported by receipts, purchase orders, or asset registers

Best practice: give the employee an itemized statement:

Item description + serial/asset tag (if applicable)
Date issued
Returnable status
Value computation method
Amount proposed for deduction
How to contest and deadline to respond

8) Due process checklist before any deduction

To reduce risk, follow a simple due process flow:

Inventory check & clearance notice Provide a list of accountabilities to be returned.
Demand to return / explain Give a reasonable period to return items or explain loss.
Incident review (if lost/damaged) Determine whether loss was due to negligence, an incident in the course of work, theft without employee fault, force majeure, or normal wear.
Written computation and opportunity to contest Provide itemized computation and allow the employee to contest in writing.
Obtain specific written authorization (where applicable) If you intend to deduct from final pay, ensure authorization is specific and voluntary.
Release the undisputed portion of final pay If there is a genuine dispute, consider releasing the uncontested amounts and resolving the property issue separately.

9) Practical compliance strategy: reduce disputes by policy design

A robust PPE/property accountability system prevents final pay disputes:

A. Separate “employer-provided PPE” from “employee-owned PPE”

If the company requires PPE as OSH compliance: provide it and treat it as a business expense.
If an employee wants upgraded PPE beyond minimum standard, consider an optional purchase program—but keep it clearly voluntary and documented.

B. Decide which reusable PPE is returnable

Create two categories:

Returnable PPE (must be returned): harnesses, respirators, specialty goggles, face shields, certain helmets
Non-returnable PPE (issued for personal use): some safety shoes or personal-fit items (this depends on your policy, hygiene, and industry practice)

Then document it clearly on issuance.

C. Use issuance forms that are specific

Include:

Item description, serial/asset tag
Condition at issuance
Return requirement
Valuation method if unreturned
Process for disputes

D. Don’t “hold” final pay as leverage

Delaying final pay indefinitely invites complaints. If property issues remain, address them promptly and proportionately.

10) Frequently asked questions

Can we deduct the cost of safety shoes from final pay?

If safety shoes are required PPE for the job, charging employees for them is legally risky and often inconsistent with OSH principles. If you treated shoes as company property that must be returned, you would need clear documentation and a realistic return policy (many safety shoes are effectively personal-fit items, making “return” impractical). Most employers treat required safety shoes as employer expense or as a subsidized benefit rather than a recoverable cost.

Can we deduct for a lost hard hat or goggles?

If they were returnable company property with clear issuance records, and the employee failed to return without valid explanation, a deduction may be defensible if properly authorized and reasonably valued.

What if the employee refuses to sign a deduction authorization?

If you do not have a strong legal basis to deduct, do not force it. Consider:

Requiring return of property as part of clearance (without unreasonable withholding of earned wages), and/or
Pursuing a separate civil claim for property loss (often not cost-effective), and/or
Writing off minor losses as business expense.

Can we require a “PPE deposit” upon hiring?

Requiring deposits that effectively shift business loss risk to employees is generally disfavored under wage protection rules. A safer route is a property accountability system (issuance tracking + return process), not deposits.

Can we withhold the entire final pay until all PPE is returned?

Withholding all final pay as leverage is risky. A more defensible approach is to release undisputed earned amounts and resolve the property issue promptly, using lawful channels.

11) Recommended template language (policy-level, not legal advice)

If you maintain returnable PPE, policy language should be tight and specific, such as:

The company provides required PPE in compliance with OSH standards.
Certain PPE items are designated as returnable company property and must be returned upon separation.
Failure to return returnable PPE may result in recovery of its reasonable value, subject to:
- documented issuance,
- due process and dispute mechanism,
- itemized valuation (depreciated or fair value),
- lawful deduction rules and written authorization where required.

Avoid language that says:

“All PPE costs will be charged to the employee,” or
“Company may deduct any amount from wages at its discretion.”

12) Bottom line: what employers should do

Best practice in the Philippines:

Do not treat mandatory PPE as an employee expense.
Treat only clearly returnable reusable PPE as accountable company property.
If an item is not returned, recover only a reasonable, documented value—and only through a lawful, documented, due-process-backed method.
When in doubt, separate the property dispute from wage release to minimize labor-law exposure.

If you share your industry (construction, manufacturing, BPO, healthcare, logistics) and the exact PPE items you issue (e.g., safety shoes vs. harness vs. helmet), I can draft a compliant PPE issuance & returnability policy and final pay deduction checklist tailored to that setup.