1) Understanding “Underpayment of Wages”

Underpayment happens when a worker receives less than what the law, wage orders, or a valid agreement requires. It is not limited to basic pay. It commonly includes shortfalls in:

Minimum wage (including sector- or region-specific minimums set by Wage Orders)
Holiday pay (regular holidays; and, when applicable, special non-working days)
Overtime pay
Night shift differential
Rest day and premium pays
13th month pay (required for most rank-and-file employees)
Service incentive leave (SIL) pay conversion (for employees entitled to SIL)
Wage-related benefits that are legally mandated or have become demandable (e.g., by company practice or CBA, depending on facts)
Illegal deductions or prohibited withholding that effectively reduces wages below what is due

Who counts as an “agency” in wage disputes?

In practice, the term “agency” may refer to:

A manpower/contractor (service contractor) that deploys workers to a client (“principal”); or
A private employment/recruitment agency (for local placement); or
A government agency acting as an employer (subject to a different regime for many categories of personnel); or
An outsourcing provider that is the employer of record.

This article focuses on the most common scenario: workers deployed by a manpower agency/service contractor to a client company and paid below legal entitlements.

2) Core Legal Framework

A) The Labor Code: wages and enforcement

Key principles and mechanisms come from the Labor Code and related issuances:

Workers are entitled to receive lawful wages in full and on time.
The government, through DOLE, has labor standards enforcement powers (inspection and compliance orders).
Wage claims may be handled through either:
- DOLE (labor standards enforcement and certain money claims), or
- NLRC (labor arbitration), depending on the claim’s nature (e.g., whether reinstatement/termination issues are involved) and the procedural route taken.

B) Wage Orders and wage-setting laws

Minimum wages are set by Regional Tripartite Wages and Productivity Boards (RTWPBs) through Wage Orders. Underpayment is often proven by comparing actual pay against:

the applicable regional wage order, and
the correct classification (industry/sector, location, etc.).

C) Key wage-related benefit laws

Commonly implicated rules include:

13th Month Pay (generally under P.D. 851 and implementing rules)
Service Incentive Leave (SIL) under the Labor Code for covered employees
Premiums and differentials under the Labor Code and implementing rules (overtime, night shift, rest day, holiday pay)

D) Contracting/subcontracting and who is liable

For manpower/agency setups, liability is governed by Labor Code rules on contracting and DOLE regulations on contracting (including rules distinguishing legitimate job contracting from labor-only contracting).

Why this matters: a worker may file against the agency, but also consider the client/principal because the law can impose joint/solidary liability for wage underpayment in many contracting situations.

3) Identify the Correct “Employer” and Potentially Liable Parties

When wages are underpaid in an agency deployment arrangement, there may be more than one responsible party:

A) The Agency/Contractor

Usually pays wages directly and issues payslips. It is commonly the direct employer.

B) The Principal/Client Company

Depending on the arrangement and compliance with legal requirements, the principal may be:

jointly/solidarily liable with the contractor for unpaid wages and other labor standards violations; and/or
deemed the real employer if the setup is found to be labor-only contracting.

C) Why include the principal in the complaint?

Including the principal can be critical when:

the agency is undercapitalized, evasive, or hard to collect from;
records and proof (timekeeping, schedules, work assignment) are with the principal; and
solidary liability rules apply.

Practical tip: If unsure, it is common to implead both the agency and the principal and let the forum determine the proper liabilities.

4) Check the Nature of the Dispute: Labor Standards vs. Termination

The best filing path depends on what else is involved.

A) Pure labor standards issue (typical underpayment)

Examples:

minimum wage shortfall
unpaid overtime/holiday pay
missing 13th month
illegal deductions
unpaid last pay

These are often addressed through DOLE’s labor standards mechanisms and/or NLRC money claims, usually after mandatory conciliation/mediation.

B) If termination/constructive dismissal is involved

If the worker was:

terminated, not renewed under suspicious circumstances,
forced to resign due to wage violations, or
removed from assignment with no pay (floating status issues can be complex),

then the dispute may shift into labor relations/termination, commonly falling under NLRC labor arbitration.

5) Before Filing: Build a Strong Documentation Pack

Underpayment cases are won on proof. Gather as many of these as possible:

Identity and employment relationship

Agency contract, employment agreement, or appointment papers
Company/agency ID, deployment memo, endorsement letter
Emails/texts showing work assignment and supervision
Any onboarding documents

Wage proof

Payslips, payroll summaries
Bank crediting records / ATM transaction history
Vouchers, acknowledgments, payroll envelopes, remittance slips
13th month computations or proof of nonpayment

Work/time proof (especially for OT/holiday/rest day claims)

DTRs, timecards, biometrics logs (often held by the principal)
Schedules/rosters, overtime approvals, duty assignment sheets
Chat messages or emails requiring work on certain dates/times

Legal baseline references

Copy or details of the applicable Wage Order for the region/sector
Company policy manuals or memos relevant to pay and timekeeping

If records are held by the principal or agency: note where they are and who controls them. In many proceedings, the employer’s failure to produce payroll/time records can be weighed against it.

6) Where to File: The Philippine Channels

A) First stop in most cases: SEnA (Single Entry Approach)

Most labor disputes start through Single Entry Approach (SEnA)—a mandatory 30-day conciliation-mediation mechanism before formal cases proceed.

What it does: attempts settlement quickly; if no settlement, the case is referred to the proper office (DOLE or NLRC, etc.) for formal action.

What to prepare:

A brief narrative of underpayment and dates
Amounts claimed (even if estimated initially)
Documents listed above
Names/addresses of agency and principal; worksite address

What can happen:

Settlement with a payment schedule
Agreement on wage adjustment and restitution
Referral to enforcement/adjudication if no settlement

B) Filing with DOLE (labor standards enforcement / certain money claims)

DOLE mechanisms commonly used for underpayment:

Labor Standards Complaint / Request for Inspection

DOLE may conduct an inspection (or require document submission) and issue compliance directives.

Money claims within DOLE’s authority Certain money claims are handled at the DOLE regional level under Labor Code provisions and rules (with specifics depending on the claim type and whether reinstatement is involved).

Strength of DOLE route: strong for clear labor standards violations (minimum wage, 13th month, etc.), and DOLE has compliance/enforcement posture.

C) Filing with NLRC (Labor Arbiter)

The NLRC is typically used when:

the case involves termination/reinstatement, or
the issues require adjudication beyond compliance (including broader monetary claims, damages, and attorney’s fees, depending on the case).

NLRC cases proceed more like formal litigation:

Position papers
Mandatory conferences
Decision
Appeal (with strict rules)
Execution

Common approach: start with SEnA; if unresolved, referral to NLRC for filing a complaint before the Labor Arbiter.

7) Step-by-Step: Filing a Complaint (Practical Walkthrough)

Step 1 — Compute a conservative estimate of what is owed

Even a rough table helps:

Actual daily wage vs. minimum wage
OT hours x OT rate
Holiday/rest day premiums
13th month shortfall
Deductions that appear unlawful

Do not worry if it is not perfect; the employer’s records should refine the numbers.

Step 2 — Draft a concise statement of facts

Include:

dates of employment (start to present/end)
worksite(s) and schedule
who supervised day-to-day work (agency, principal, or both)
how wages were paid and how often
what exactly is underpaid (minimum wage, OT, holiday, 13th month, etc.)
how much is claimed (estimate) and how computed

Step 3 — Initiate SEnA

File a request for assistance at the appropriate office (commonly through DOLE’s SEnA desks or designated receiving units).

During mediation:

Be ready to show payslips/bank credits.
Ask the agency/principal to bring payroll and time records.
If pressured to sign a quitclaim: do not sign anything not understood; ensure amounts match lawful entitlements and payment is verifiable.

Step 4 — If no settlement, proceed to the proper forum

If it remains a labor standards underpayment issue, it may be referred for DOLE enforcement/complaint processing.
If it includes termination/reinstatement or requires adjudication, proceed to NLRC.

Step 5 — File against the correct parties

Frequently named respondents:

The agency/service contractor (direct employer)
The principal/client company (as solidarily liable and/or real employer, depending on findings)

Step 6 — Attend conferences and submit position papers on time

Deadlines matter. Organize attachments:

Payslips/bank records
DTRs/schedules
Employment documents
Computation sheet

Step 7 — Enforcement/collection

Winning on paper is not enough. If the employer does not pay voluntarily:

pursue execution mechanisms available in the forum
identify collectible assets or payment sources
solidary liability (where applicable) can be essential for collectability

8) Common Defenses and How to Respond

“Fixed pay / package rate already includes OT and premiums.”

For many employees, OT and premiums must still be shown and correctly paid. Package arrangements do not automatically excuse underpayment if the package falls below statutory minimums or does not satisfy premium pay requirements.

“No OT was authorized.”

If OT was suffered or permitted (worked with knowledge of management), it may still be compensable. Proof can include messages, logs, and patterns of required work.

“You are not our employee; you are the agency’s.”

Agency arrangements do not automatically shield the principal if laws on contracting impose joint/solidary liability or the arrangement is labor-only contracting.

“You signed a quitclaim.”

Quitclaims are not always ironclad, especially if:

the amount is unconscionably low,
the worker did not voluntarily and knowingly agree,
the payment was not actually made or was coerced.

9) Prescriptive Periods (Deadlines) to Watch

Wage-related money claims generally have time limits. A widely applied rule is that money claims arising from an employer-employee relationship prescribe in three (3) years from the time the cause of action accrued. Waiting too long can bar recovery for older periods.

Practical implication: file early, especially if underpayment has been ongoing for years—older portions may prescribe first.

10) Special Situations

A) “Floating status” / off-detail without pay (common in agencies)

In agency deployments, workers sometimes get placed on “floating” or “off-detail” status. This can become unlawful depending on duration, reasons, and whether it is used to avoid wage obligations. If it results in nonpayment of wages when work is available or becomes constructive dismissal, the case may shift to an NLRC termination dispute.

B) Government as “agency”

If the employer is a government office and the worker is under civil service rules, remedies may fall under the Civil Service Commission framework rather than DOLE/NLRC, depending on employment status (regular, casual, contractual, job order). However, many “contractual” arrangements in government have their own rules and limitations.

C) Domestic workers (Kasambahay)

Kasambahay are covered by a special law regime. Procedures and venues can differ (often involving barangay-level handling of disputes before escalation, depending on the issue and locality practice). Underpayment still matters, but filing mechanics may not mirror typical DOLE/NLRC pathways.

D) BMBEs and minimum wage exemptions

If the employer is a registered Barangay Micro Business Enterprise (BMBE), minimum wage exemption issues can arise, but exemptions have conditions and do not automatically excuse other wage-related obligations. Verify the employer’s claimed status and the scope of exemption.

11) Remedies You Can Ask For

Depending on facts and forum, remedies may include:

Wage differentials (minimum wage shortfalls)
Unpaid premium pays (OT, holiday, rest day, night differential)
Unpaid 13th month pay
Refund of illegal deductions
Legal interest (when awarded and applicable under prevailing rules)
Attorney’s fees (in appropriate cases, often when forced to litigate)
Damages (more common when there is bad faith, harassment, or termination disputes)

In addition, persistent or willful violations can expose employers to administrative and potentially penal consequences under labor laws, though the worker’s main objective is often recovery of unpaid wages.

12) How to Write the Complaint: A Simple Structure

A strong complaint (or request for assistance) is factual and organized:

Parties

Name, address, contact info of worker
Exact business names and addresses of agency and principal

Employment Facts

Position, start date, worksite
How wages were paid (daily/weekly, bank transfer, etc.)
Work schedule and actual hours

Violations

Minimum wage underpayment (cite region and wage order category)
Unpaid OT/holiday/rest day premiums
Missing 13th month
Illegal deductions

Claims and Computation

A table with dates/periods and amounts claimed

Relief

Payment of total monetary claims
Solidary liability of respondents (if applicable)
Any other lawful relief

13) Practical Mistakes to Avoid

Delaying filing until large portions prescribe
Filing against only the agency when the principal may be solidarily liable
Bringing no proof of pay (at least bank credits or even photos of payslips)
Signing quick settlement documents without verifying the math and the actual payment method
Relying solely on verbal assurances instead of written agreements

14) A Quick Checklist (Bring This When You File)

Valid ID
Contract/employment documents
Payslips or payroll proof
Bank statements showing salary credits
DTRs/schedules or proof of hours worked
Computation sheet (even if estimated)
Names/addresses of:
- agency HR/payroll office
- principal/client company
- workplace location

15) When Professional Help Is Most Useful

While workers can file on their own, legal assistance becomes especially helpful when:

the principal denies liability and contracting issues must be litigated
records are withheld and the case needs procedural pressure to compel production
termination/constructive dismissal is intertwined with underpayment
the amounts are large or the employment period is long
there are multiple workers (collective claims can raise strategy and proof issues)

Bottom line

To complain against an agency for underpayment in the Philippines, the standard path is:

Organize proof + compute estimates,
Start through SEnA conciliation, then
If unresolved, proceed to DOLE enforcement/claims processing for labor standards issues and/or NLRC labor arbitration for adjudicatory cases (especially if termination is involved), often naming both agency and principal to preserve full remedies and collectability.