Employee Liability for Shoplifted Items Charged by Agency in the Philippines

Got you. Here’s the short, practical answer for the Philippines:

Can an agency charge an employee for shoplifted items?

Generally, no—not unless all of the legal conditions for a wage deduction are satisfied. Philippine law protects wages and prohibits deductions except those allowed by law/regulation or with the worker’s written authorization (and even then, other safeguards still apply). (Labor Law PH Library)

When (and only when) a deduction may be legal

Under the Labor Code’s Implementing Rules (Book III, Rule VIII), a deduction for loss or damage is valid only if every condition below is met:

  1. The employee is clearly shown (after investigation) to be responsible;
  2. The employee was given a reasonable chance to explain;
  3. The amount is fair and does not exceed the actual loss; and
  4. The deduction does not exceed 20% of the employee’s wages in a week. (Labor Law PH Library)

“Written authorization” doesn’t make everything okay

DOLE’s Department Order 195-18 allows deductions with written authorization (even payable to the employer), but this doesn’t override the loss/damage safeguards above, nor other labor-standards limits. Blanket “I’ll pay for any shortages” forms are risky and can still be struck down if the Rule VIII requirements aren’t met. (Judiciary eLibrary)

Shoplifting by customers

Losses from customer shoplifting are normally a business risk, not automatically the employee’s liability. Employers (or their agencies) can’t pass these losses to staff absent proven fault/neglect and due process—and even then the 20% weekly cap and “actual loss only” limits apply. (RESPICIO & CO.)

If you’re deployed by an “agency”

If you’re a contractor-deployed worker (e.g., merchandiser), the principal (retailer) can be solidarily liable with the agency for labor-standards violations like illegal deductions. That means you can pursue claims against both under DOLE D.O. 174-17 and Labor Code Arts. 106-109. (PALSCON)

Special note for private security personnel

DOLE Labor Advisory No. 11 (2014) recognizes cash deposits/deductions for loss/damage only in the private security industry, still subject to the “prove fault + due process + actual loss + 20% cap” rules. This carve-out does not apply to typical retail staff. (Scribd)


What you can do now (quick checklist)

  • Don’t sign broad “authority to deduct” forms. If you already did, you can still contest illegal deductions that ignore Rule VIII. (Judiciary eLibrary)
  • Ask in writing for the incident report/audit showing your specific liability; note the 20% weekly cap and “actual loss only” rule. (Labor Law PH Library)
  • File a SEnA Request for Assistance with DOLE (fast, free 30-day mediation). If no settlement, you’ll get a referral to the proper forum (NLRC/DOLE). (ncmb.gov.ph)
  • Remember the 3-year limit for money claims (from when the deduction happened). (Labor Law PH Library)

If you want, tell me your exact situation (who’s charging you, what you signed, and how much they’re deducting per cutoff), and I’ll map your options and draft a one-page, cite-backed letter you can give to HR/your agency.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.