Final Pay Not Released in the Philippines: DOLE Rules, Timelines, and How to File a Complaint

Philippine private-sector context. This guide reflects DOLE issuances and Labor Code rules commonly applied up to mid-2024. It’s general information—not legal advice.

Quick answer (TL;DR)

“Final pay” (a.k.a. last pay/back pay) usually includes: unpaid wages, overtime/night differential/holiday pay, pro-rated 13th-month pay, cash conversion of unused Service Incentive Leave (SIL), separation pay if applicable, tax refund (if any), and other earned benefits minus lawful deductions.
Release deadline: Under DOLE Labor Advisory No. 06-20 (Guidelines on the Payment of Final Pay and Issuance of COE), the employer should release final pay within 30 calendar days from the date of separation, unless a more favorable policy/contract/CBA says sooner.
COE: Employers must issue a Certificate of Employment within 3 days from an employee’s request, regardless of the reason for separation.
If unpaid after 30 days: Start with a written demand to HR. If still unresolved, file a SEnA (Single-Entry Approach) request for conciliation-mediation at the DOLE Regional/Field Office. If no settlement, file a case with the NLRC (Labor Arbiter) for money claims (and illegal dismissal, if applicable).
Deadline to sue (prescription): Money claims (e.g., unpaid final pay) generally within 3 years from when they became due; illegal dismissal within 4 years.

1) What counts as “final pay”?

Typical components:

Unpaid wages up to the last day worked (including differential adjustments).
Overtime (OT), night shift differential (NSD), premium pay, and holiday pay earned but unpaid.
Pro-rated 13th-month pay (PD 851):
- Formula (conceptual): (Basic salary actually earned for the year ÷ 12) up to the separation date.
- Note: “Basic salary” excludes allowances/OT; if you had unpaid basic salary for earlier months, that should be factored.
Cash conversion of unused Service Incentive Leave (SIL) (Labor Code):
- Private-sector rank-and-file employees who have rendered at least 1 year of service are entitled to 5 days SIL/year, convertible to cash if unused at year-end or upon separation.
- Rate: based on the employee’s regular daily wage.
Separation pay (only if applicable): see Section 4 below.
Other earned benefits under company policy/CBA/contract (e.g., allowances already earned, commissions with completed conditions, non-forfeitable incentives).
Tax refund (if year-to-date withholding exceeds actual tax due at separation).

Lawful deductions that may reduce the take-home final pay include: statutory contributions/taxes, written-authorized salary deductions/advances/loans, final SSS/HDMF/PhilHealth loans (if there are employer undertakings), and the value of unreturned company property if there’s a clear basis and written authorization or policy allowing set-off. Employers cannot impose arbitrary penalties or withhold all wages indefinitely.

2) Release deadline & documents

A) Deadline

30 calendar days from the date of separation (resignation, end of contract, termination), unless your contract/CBA/company policy grants an earlier release.
Employers may run a clearance process, but this should not be used to stall payment beyond the 30-day standard without a lawful, documented reason; at minimum, the undisputed portion should be released on time.

B) Certificate of Employment (COE)

Must be issued within 3 days from request, stating at least the position and inclusive dates of employment. Reason for separation is not required; disciplinary history should not appear unless you request it.

Good practice: Before departure, request in writing: (1) COE; (2) final pay computation; (3) BIR Form 2316 (issued upon separation or by the following Jan 31, whichever comes first).

3) What employers may and may not do

Allowed

Deduct documented and authorized accountabilities (e.g., company loan with signed authorization; the proven cost of unreturned equipment if policy allows).
Withhold only the disputed portion while investigating; release the undisputed portion within the deadline.

Not allowed

Withhold the entire final pay as “penalty” or due to a blanket “no clearance, no pay” rule without promptly accounting for actual, documented obligations.
Refuse to issue a COE because of “pending clearance” or an employee’s “bad record.”

Quitclaims/releases: You may be asked to sign a “quitclaim” to receive final pay. These are valid only if voluntarily executed, free from fraud/duress, and for a reasonable consideration. Courts may nullify unconscionable quitclaims. Read carefully; seek advice if unsure.

4) Separation pay (who gets it and how much)

Separation pay applies only in specific cases:

Authorized causes by employer:
- Redundancy or installation of labor-saving devices → At least 1 month pay or 1 month pay per year of service (whichever is higher).
- Retrenchment to prevent losses or closure not due to serious losses → At least 1 month pay or ½ month pay per year of service (whichever is higher).
Disease (employee found unfit to work and disease not curable within 6 months) → At least 1 month pay or ½ month pay per year of service (whichever is higher).
No separation pay for just causes (serious misconduct, willful disobedience, gross & habitual neglect, etc.), unless granted by policy or equity.
Resignation doesn’t ordinarily entitle you to separation pay, except when contract/CBA/company policy provides it.

Tax note (general): Separation pay due to causes beyond the employee’s control (e.g., redundancy, retrenchment, disease) is typically tax-exempt under the Tax Code and BIR rules; check current BIR guidance for details. Regular 13th-month and certain benefits may be tax-exempt up to the statutory cap, with excess taxable.

5) How to compute (practical roadmap)

List everything you’re owed up to separation date:
- Last unpaid basic pay
- OT/NSD/holiday premiums
- Pro-rated 13th-month pay (basic earnings ÷ 12)
- Cash conversion of unused SIL (daily rate × unused SIL days)
- Separation pay, if applicable (see Section 4)
- Any other earned benefits/commissions (per policy/contract)
Subtract lawful deductions (taxes, contributions, authorized loans, cost of unreturned property per policy, etc.).

Tip: Companies use different daily-rate factors (e.g., 26/261/313/365) depending on whether rest days/special days are deemed paid. Use the factor shown on your payslip or HR policy for consistent computation.

6) What to do if final pay isn’t released on time

Step 0 — Try internal resolution (fastest)

Send a written demand to HR/Payroll requesting: (1) final pay release; (2) detailed computation; (3) COE within 3 days.
Attach: valid ID, resignation/termination notice, clearance (if any), payslips, time records, contract/policy excerpts.

Simple template (you can copy-paste):

Subject: Request for Release of Final Pay and COE

Dear HR/Payroll, I separated from the company on [date]. Under DOLE Labor Advisory No. 06-20, final pay should be released within 30 calendar days from separation and COE within 3 days from request.

Kindly release my final pay and provide the detailed computation by [date = 30th day or earlier per policy]. Please also issue my COE within 3 days.

Attached are my ID and separation documents. Thank you.

If ignored or denied after the 30-day window, proceed.

Step 1 — File a SEnA request with DOLE (conciliation-mediation)

Where: Any DOLE Regional/Field Office with jurisdiction over the workplace (or where the employer is located).
What to file: Request for Assistance (RFA) under the Single-Entry Approach (SEnA), stating the unpaid final pay and the amount you claim.
What happens: DOLE schedules a conciliation-mediation session (often within days). The process is non-adversarial and free.
Timeline: SEnA is designed to be completed within 30 calendar days from filing.
Outcome: If the parties settle, the agreement is documented and enforceable. If no settlement, DOLE issues a referral to the proper forum (usually the NLRC).

Bring/submit: government ID, proof of employment, separation letter, payslips, time records, any emails/texts showing follow-ups, computation (if you have one).

Step 2 — File a case with the NLRC (if SEnA fails or isn’t suitable)

Forum: National Labor Relations Commission (NLRC), Labor Arbiter.
Claims: Unpaid final pay is a money claim; if you also contest your dismissal, include illegal dismissal and claim for damages/attorney’s fees, as appropriate.
Filing fees: Employees generally aren’t required to advance docket fees; fees (if any) are usually assessed against the employer upon award. Ask the filing office about current rules.
Process (typical): Mandatory conferences → submission of position papers/evidence → decision. Remedies (appeal, etc.) follow NLRC rules.
Prescription: File within 3 years for money claims; 4 years for illegal dismissal.

Optional — DOLE compliance route via inspection

In some cases (especially where many workers are affected), DOLE may use its visitorial/enforcement powers to conduct an inspection and issue a compliance order for unpaid monetary benefits. You can raise this during SEnA/with the Regional Office.

7) Evidence checklist (bring what you have)

Valid government ID
Employment contract/offer letter/201 file excerpts
Resignation letter / termination notice / end-of-contract memo
Company policies (on clearance/final pay/commissions) or CBA provisions
Payslips, payroll summaries, bank statements showing last credits
Timekeeping records, OT approvals, holiday duty logs
Leave ledger showing unused SIL
Emails/texts requesting COE and final pay, and any responses
Proof of company loans already paid (or accountabilities settled)

You don’t need everything—any proof helps.

8) Frequently asked questions

Q: Can my employer refuse to pay until I return all company property? They may deduct the documented value of unreturned items (if policy/authorization allows), but not indefinitely withhold everything without accounting. The undisputed part should still be released on time.

Q: I resigned. Am I entitled to separation pay? Generally no, unless granted by contract/CBA/company policy. You’re still entitled to your final pay (wages, pro-rated 13th-month, unused SIL, etc.).

Q: The company closed down. Am I still owed? Yes—final pay still covers earned wages/benefits. Separation pay depends on the cause of closure (see Section 4).

Q: Are commissions part of final pay? If the conditions to earn them were met before separation (e.g., sale closed, collection made if that’s the condition), they’re generally payable per your plan/policy.

Q: I signed a quitclaim. Can I still claim deficiencies? Possibly. Courts may set aside quitclaims obtained by fraud/duress or covering unconscionably low amounts. Keep all proofs and seek counsel.

Q: Can I demand interest? Yes, courts may impose legal interest on monetary awards from the time they are due (rates follow Supreme Court circulars). Ask for it in your claim.

9) Practical tips

Calendar the 30th day from your separation date; that’s your standard follow-up marker.
Keep your communications in writing.
Ask for a breakdown of the computation (rates, factors, deductions).
If you moved, give HR your updated bank details/address to avoid “payment failed” delays.
If the amount is small but the principle matters, SEnA is still worth it—fast and free.
If many coworkers are affected, file together; it strengthens settlement and may trigger DOLE inspection.

10) Where to file / who to contact

SEnA / DOLE Regional or Field Office with jurisdiction over your workplace or employer’s address.
NLRC Regional Arbitration Branch for your area (after SEnA or if otherwise directed).
DOLE Hotline: 1349 (nationwide). You can call to ask which office handles your barangay/city and what to bring.

11) One-page action plan (you can save this)

Day 1–5 after separation: Email HR requesting final pay computation and COE.
Day 30: If unpaid, send written demand (see template). Give a short, clear deadline (e.g., 5 days).
No payment: File SEnA RFA at DOLE with your documents.
No settlement within SEnA: File NLRC case (money claims; add illegal dismissal if applicable).
Track prescriptive periods: 3 years (money claims), 4 years (illegal dismissal).

Final note

Because rules can evolve, double-check if your region has any new implementing guidelines or online filing options. If your situation involves large sums, a non-compete, or a quitclaim, consider consulting a labor lawyer or the Public Attorney’s Office (PAO) for personalized advice.