How to Demand and Claim Backpay in the Philippines

Backpay—often called “unpaid wages,” “final pay,” or, in litigation, “backwages”—refers to money an employer still owes an employee. This guide explains, end-to-end, how to demand and recover backpay in the Philippines: what counts as backpay, the legal bases, where to file, deadlines, evidence, computation, settlement, enforcement, and a practical template you can use right away.

1) What exactly is “backpay”?

A. Final pay upon separation

When employment ends (resignation, end of contract, retrenchment, redundancy, closure, retirement, or dismissal), the employer must release the final pay within a reasonable time (commonly within 30 days under prevailing DOLE guidance or earlier if company policy/CBA says so). Final pay typically includes:

Unpaid basic wages and allowances up to last day worked
Pro-rated 13th-month pay (1/12 of basic salary for the year)
Encashment of unused Service Incentive Leave (up to 5 days per year if the benefit applies)
Overtime pay, night shift differential (10% of basic hourly rate for authorized night work), and premium/holiday pay, if any
Separation pay, if legally due (e.g., redundancy, retrenchment, disease with medical certification, installation of labor-saving devices, closure not due to serious business losses, etc.)
Other vested benefits under policy/CBA (e.g., rice/transport allowance, commissions already earned)

B. Backwages due to illegal dismissal

If you were illegally dismissed, “backwages” are awarded from the date of dismissal up to actual reinstatement; if reinstatement is no longer viable, up to the finality of the judgment, often with separation pay in lieu of reinstatement. Backwages generally include regular allowances and benefits that form part of your wage (e.g., COLA, guaranteed allowances, 13th-month).

Practical distinction: Final pay is due even without a dispute; backwages are a judicial/administrative award after proving illegal dismissal.

2) Legal bases and who has jurisdiction

Labor Code provisions on wages, benefits, and visitorial/enforcement powers of the DOLE, the jurisdiction of Labor Arbiters (NLRC) over termination disputes and monetary claims, and the Regional Director’s authority over simple money claims (subject to amount and conditions).
Special issuances on final pay and certificates of employment, and on Single-Entry Approach (SEnA)—the mandatory 30-day conciliation-mediation step before filing a case.
Jurisprudence clarifying backwages (e.g., full backwages without deduction for earnings elsewhere), reinstatement vs. separation pay, and inclusion of benefits that are wage-integrated.

Where to file depends on the claim:

Situation	Forum
Pure wage/benefit claims ≤ ₱5,000 per employee, no reinstatement/termination issues, and employment relationship subsists	DOLE Regional/Field Office (simple money claims)
Claims > ₱5,000, or any termination/illegal dismissal or reinstatement issue	NLRC – Labor Arbiter
Government employees	Civil Service/CSC rules, not covered here

Even for pure money claims, DOLE may refer you to the NLRC if facts show a termination dispute.

3) Deadlines (prescription periods)

Money claims arising from employer–employee relations: 3 years from when the claim accrued.
Illegal dismissal (reinstatement/backwages as an injury to rights): often treated as 4 years from dismissal in jurisprudence.
Unfair labor practice: 1 year from occurrence (less common for straight wage claims).

Tip: A written demand letter (extrajudicial demand) helps interrupt prescription. Don’t delay.

4) Step-by-step: How to demand and claim

Step 1 — Do an internal demand (low-cost, fast)

Audit your pay: List dates worked, rates, overtime, holidays, allowances, SIL balance, and amounts paid vs. unpaid.
Gather evidence (see Section 6).
Send a written demand letter to HR/payroll and the employer (email + courier). Give a clear amount and a deadline (e.g., 5–10 working days). Request your Certificate of Employment and payslip/payroll records if missing.
Document responses or non-response.

Many employers settle at this stage, especially if the demand is specific and evidence-backed.

Step 2 — SEnA (conciliation-mediation)

File a Request for Assistance (RFA) at any DOLE Single Entry Assistance Desk (physically or via regional online channels).
A SEnA officer schedules conferences within 30 calendar days. Bring your documents; propose a settlement figure (principal + legal interest).
If settled, parties sign an agreement enforceable through DOLE. If no settlement, you get a Referral/Endorsement to the proper forum (NLRC or DOLE Regional Director).

Step 3A — DOLE money claim (simple, small-value)

File your complaint with the DOLE Regional/Field Office if your case fits simple money claim criteria.
The Regional Director may issue a compliance order after evaluation/inspection.
Employers can be directed to pay; non-compliance can lead to writs and penalties.

Step 3B — NLRC case (termination or larger claims)

File a complaint with the NLRC – Labor Arbiter (usually after SEnA referral).
Mandatory conference, then position papers with evidence and computations.
Decision: If you win, you may get reinstatement (or separation pay in lieu) plus backwages and other monetary awards.
Appeal: Parties have 10 days from receipt to appeal to the NLRC Commission (employers generally must post a bond for monetary awards). Further review via Rule 65 to the Court of Appeals, then Rule 45 to the Supreme Court on questions of law.

Step 4 — Enforcement

After finality or pending appeal with reinstatement, request writ of execution.
Sheriffs can garnish bank accounts/receivables or levy on property.
Monetary awards earn legal interest (commonly 6% per annum under current jurisprudence) from the proper reckoning date until full payment.

5) Computation essentials

A. Final pay (separation scenario)

Basic wages due = Daily rate × days actually worked but unpaid
Pro-rated 13th month = (Total basic salary earned in the calendar year ÷ 12)
SIL encashment (if unused and applicable) = Daily rate × remaining SIL days (up to 5 per year as mandated)
Overtime = Hourly rate × 1.25 (or 1.30/1.69/2.0 for certain holidays/rest day scenarios) × OT hours actually worked
Night shift differential = Hourly rate × 10% × hours between 10:00 p.m. and 6:00 a.m.
Holiday/Rest day premium = As provided by law/policy/CBA
Separation pay (if due) = Typically ½ month or 1 month per year of service, depending on authorized cause (specific cause determines the multiplier)

B. Backwages (illegal dismissal)

Backwages = Sum of basic pay and integrated regular allowances/benefits from date of dismissal to actual reinstatement; or to finality of decision if separation pay in lieu is awarded.
13th month and regular allowances typically included.
No deduction for earnings elsewhere (prevailing doctrine).
Interest: 6% per annum (generally from finality of judgment on the total monetary award; some items may earn interest from demand or filing—state both in your prayer).

For fixed-term/project employees, backwages may be limited to the unexpired term/project period if dismissal is found illegal.

6) Evidence: what works (and what if you don’t have payslips)

Helpful documents:

Employment contract/appointment letters, policy manuals, CBA
Payslips, payroll summaries, time sheets/biometrics logs, DTRs
Emails/chats assigning work, approving overtime, acknowledging underpayment
Bank credits/transfers, remittance records
Company memos on schedules, rates, incentives, or changes
Government filings proving relationship (e.g., SSS/PhilHealth/Pag-IBIG remittances)

If you lack payslips: Your sworn statement, time/attendance evidence (photos, access logs), co-worker affidavits, and bank/SMS/pay app screenshots can carry the claim. Burden of proof is on the employer to show payment once non-payment is alleged with some proof of work rendered.

7) Special situations

Contracting/Subcontracting: The principal may be solidarily liable with a labor-only contractor for wage claims; even with legitimate contracting, principals can be liable for unpaid wages related to the contracted work.
Commissions/Service charges: If contractually/legally due and already earned, they form part of wage for backpay.
Withholding for clearance: Employers may follow clearance procedures, but cannot indefinitely delay final pay. Any set-off (e.g., unliquidated cash advances) must be lawful and clearly documented.
Tax: Separation pay due to causes beyond the employee’s control (e.g., redundancy, retrenchment) may be tax-exempt; backwages are generally taxable compensation. Ask payroll to withhold properly and issue correct tax forms.
OFWs and seafarers: Contractual and POEA/Standard Employment Contract rules apply; venue and remedies may differ (often still NLRC for money claims).

8) Settlement strategy (without leaving money on the table)

Anchor with a clean computation: principal + 6% legal interest (state alternative reckoning dates) + 10% attorney’s fees if you engaged counsel.
Prioritize enforceability: Ask for post-dated checks or bank manager’s check; include a default clause.
Conditional quitclaim: If accepting a settlement, use a narrowly worded Quitclaim and Release specifying the exact items and amounts paid and excluding unknown/undiscovered claims unless fully compensated. Courts scrutinize quitclaims; unconscionable ones can be set aside.

9) DIY demand letter (copy, paste, customize)

[Date]

[Employer/HR/Payroll]
[Company Name]
[Company Address]
[Email Address]

Subject: Demand for Payment of Backpay/Final Pay

Dear [Name/HR],

I worked as [Position] from [Start Date] to [End Date/Present]. As of today, the following lawful wages/benefits remain unpaid:

1) Unpaid wages for [dates] .................................. ₱[amount]
2) Pro-rated 13th-month pay (Jan–[Month]) ..................... ₱[amount]
3) Unused Service Incentive Leave (___ days) .................. ₱[amount]
4) Overtime/night differential/holiday premium for [dates] .... ₱[amount]
5) [Separation pay/Commissions/Other benefits] ................ ₱[amount]

**Total principal:** ₱[total]

Please remit the total amount to my bank account [details] within **[5/10] working days** from receipt of this letter and release my **Certificate of Employment**. If I do not receive payment by then, I will proceed to **SEnA** and, if necessary, file the appropriate action with the **DOLE/NLRC** for recovery of the above amounts **plus legal interest at 6% per annum**, attorney’s fees, and costs.

Attached are copies of my contract, time records, and computations.

Very truly yours,

[Your Name]
[Address / Email / Mobile]

10) Filing checklist

Clear computation sheet (excel tab with formulas)
Proof of employment and pay rate
Time/attendance and workload proof
Demand letter + proof of service
ID, proof of address, and bank details (for settlement)
SEnA RFA form completed
For NLRC: complaint form, narrative, position paper outline, annexes, and calculation

11) Common pitfalls (and how to avoid them)

Vague demands → Itemize dates, hours, and legal bases.
Missing deadlines → Calendar the 3-year (money claims) and 4-year (illegal dismissal) clocks; demand early to interrupt.
Accepting a broad quitclaim → Narrow it or reserve undisputed/unknown claims.
Overlooking SIL/holiday/night differential → These are often missed and add up.
Forgetting interest → Always claim 6%; specify reckoning dates in the alternative.
Wrong forum → If any termination issue exists or claim > ₱5,000, go NLRC, not DOLE simple money claim.

12) Quick Q&A

Q: Can my employer delay final pay until I finish clearance? A: Clearance is allowed, but undue delay isn’t. Reasonable timelines apply; document and demand.

Q: I have no payslips. Can I still claim? A: Yes. Provide sworn statements and any secondary proof; employer must show records of payment.

Q: Are backwages taxable? A: Generally yes (compensation income). Separation pay due to authorized causes beyond your control may be tax-exempt.

Q: What if my employer is a contractor? A: The principal may be solidarily liable for wages, depending on the contracting arrangement and the work performed.

13) One-page action plan

Compute what’s due (include 13th-month, SIL, OT, premiums).
Demand in writing with a payment deadline.
File SEnA if unpaid; try to settle (principal + 6%).
Escalate: DOLE simple money claim or NLRC case (if termination/amount or both).
Enforce: Writ of execution; pursue garnishment/levy if needed.

Final note

This article gives a thorough, practice-oriented overview for the Philippine context. If your situation involves unusual contracts (e.g., overseas, executive equity, commission-heavy pay, or complex authorized-cause terminations), tailor the computation and forum choice accordingly—and bring your documents to a labor lawyer or DOLE desk officer for a quick review before filing.