I. Overview

In Philippine labor law, wages are generally earned only when work is actually performed. This is known as the “no work, no pay” rule.

A tricky area arises when employers try to prorate salaries or make “deductions” that relate to periods before the employee’s official start date—for example, when the first payslip shows “deductions” for days the employee was not yet working, or when pre-employment costs are recovered through salary deductions.

This article explains, in the Philippine context:

What the no work, no pay rule really means
When the employer–employee relationship legally begins
Whether employers can deduct anything for days before the start date
How pre-employment training, medical exams, uniforms, and other costs fit in
What wage deductions are allowed or prohibited under the Labor Code
Practical examples, risks, and remedies for workers and employers

II. Legal Foundations of the “No Work, No Pay” Rule

Nature of wages
- The Labor Code treats wages as compensation for work done or services rendered.
- As a general rule: if no work is done, no wages are due, except in specific situations provided by law or contract.
General principle in jurisprudence
- Philippine courts have repeatedly upheld that employees are not entitled to wages for unworked days, except where the law expressly grants pay (e.g., regular holidays, service incentive leaves, maternity/paternity leave, etc.) or where a CBA/company policy is more favorable.
Key exceptions to no work, no pay These do not really change the rule; they are legal or contractual exceptions:
- Regular holiday pay (even if unworked, subject to rules)
- Service Incentive Leave (SIL) and its commutation
- Paid leaves under law (maternity, paternity, solo parent leave, etc.)
- Company-granted paid leaves (sick leave, vacation leave, emergency leave)
- Guarantees under CBAs (e.g., pay during suspension of work beyond the worker’s control)
Outside these, the standard rule applies: no work, no pay.

III. When Does the Employment Relationship Begin?

This is crucial, because before the employment relationship starts, there is usually no right to wages.

Job offer and acceptance
- Once a worker accepts an offer, there may be a binding contract, but the employer–employee relationship in labor law typically starts when the worker begins rendering service or is already under the employer’s control (e.g., actual reporting to work, company-directed training, or onboarding).
Pre-employment requirements Common pre-employment steps:
- Submitting documents (NBI/Police clearance, TIN, SSS, etc.)
- Undergoing pre-employment medical exams
- Attending pre-hire interviews or assessments
- Completing entrance tests or examinations
In many cases, the applicant is not yet considered an employee for these steps, especially if:
- There is no assurance of hiring, and
- Activities are more like screening rather than actual work.
Onboarding, orientation, and training
- If a person is already hired and the company requires them to attend orientation or training, and they are under the employer’s control (fixed hours, instructions, evaluation), these hours may be considered hours worked and therefore compensable, even if labeled as “training.”
- If an activity is purely qualifying, with no guarantee of employment and primarily for the applicant’s benefit (e.g., open qualifying seminar for applicants), the company may treat it as unpaid — but this becomes dangerous once control becomes closer to actual work.
Practical implication
- Before the actual start date (or before the applicant is treated as an employee), there is usually no wage entitlement.
- Once the person is accepted and begins to perform required tasks under company control, the relationship (and wage obligations) effectively begin.

IV. “No Work, No Pay” and Days Before the Start Date

1. Can an employee demand pay for days before formal start?

Generally, no. If the contract says the start date is 1 July, and the person actually starts working on 1 July, they cannot claim wages for June, because:

They were not yet rendering service; and
The employment relationship had not yet commenced.

This is not even a “deduction”—it is simply no pay for days with no work and no existing employment.

2. When employers show “deductions” for unworked days

Some employers structure first pay like this (for a monthly-paid employee):

Monthly salary is divided into a daily equivalent, and
Days not worked within that first payroll period are shown as “deductions.”

Example:

Offer: ₱30,000 monthly, start date: August 10.
Payroll cutoff: August 1–15.
Employee works only August 10–15 (6 days if Monday–Saturday).
Payslip may show:
- “Basic Pay (Aug 1–15): ₱15,000”
- “Less: Absences (Aug 1–9): (₱9,000)”
- “Net basic: ₱6,000”

Legally, this looks like a deduction, but in substance it is just pro-rating the salary because the employee did not earn wages before reporting for work. As long as:

The computation is transparent and accurate, and
The wage rate is not below minimum for days actually worked,

this is not an unlawful deduction. It’s simply the way payroll is formatted.

V. Can Employers Deduct Amounts for Being Late to Start?

Scenario: The contract says the employee should start September 1, but the employee reports on September 5 without a valid reason.

No pay for September 1–4
- The simple application of no work, no pay: the employee does not get paid for those days.
Can the employer impose penalties via wage deduction?
- For example, “Penalty: four days’ salary deducted on top of days not paid.”
- Wage deductions as penalties are heavily restricted and are generally not allowed, unless they fall under permissible deductions (see next section) and do not defeat minimum labor standards.
Other consequences instead of wage deductions Employers usually have other remedies for failure to report on agreed start date:
- Cancelling or postponing employment
- Replacing the applicant with someone else
- Treating the employee as having reneged on the contract (possibly civil liability if damages can be proven, but this is rare and not through wage deductions)

Bottom line:

No pay for unworked days is normal.
Extra “penalties” deducted from wages are generally not allowed, unless clearly lawful and expressly authorized.

VI. Wage Deductions Under the Labor Code

The Labor Code limits when employers can deduct from an employee’s wages. As a rule, no deductions except those:

Required by law
- Withholding tax
- SSS contributions
- PhilHealth contributions
- Pag-IBIG (HDMF) contributions
- Other mandatory government deductions
Authorized by the employee in writing, for a lawful purpose Typical examples:
- Union dues under a check-off arrangement
- Premiums for group insurance, with clear written consent
- Company loans (salary loans, calamity loans) where the employee voluntarily authorized installment deductions
Authorized by law/DOLE regulations Examples include:
- Deductions for company goods/facilities (e.g., meals, lodging) when:
  - They are voluntarily accepted, and
  - They are not unjustly overpriced, and
  - They do not effectively bring wages below minimum pay for the work performed
- Deductions for losses or damages only when:
  - There is proof of fault or negligence,
  - The employee is given due process (chance to explain, investigation), and
  - There is a clear basis for the amount.
What is not allowed
- Deductions for:
  - General “penalties” or “fines”
  - Losses without proof of fault or without due process
  - Items that shift business costs (e.g., normal wear and tear, operational expenses) onto employees in a way that defeats minimum wage and other standards.

VII. Deductions Related to Pre-Employment Costs

Now we get to the heart of “deductions before employment start date.”

Common pre-employment costs:

Pre-employment medical exams
- Many employers require medical exams as a condition for employment.
- In principle, this is a business requirement; good practice is for the employer to shoulder the cost.
- Some companies, however, require applicants to pay up front and later reimburse, or allow the clinic to charge the applicant.
- Recovering such costs from future wages must:
  - Be voluntarily agreed upon,
  - Not violate minimum wage laws, and
  - Not be a disguised way of passing normal business expenses onto workers.
Uniforms and company-issued equipment
- Uniforms are typically a business expense.
- If the employer requires uniforms, they should generally provide them at no cost, or if they charge, it must:
  - Be reasonable,
  - Be voluntarily agreed to in writing, and
  - Not push the employee’s take-home pay below statutory minimum.
ID cards, background checks, clearances
- Company IDs and background checks are normally employer’s cost.
- Government clearances (e.g., NBI) are usually paid by the applicant, but these are not wage deductions because they occur before employment and not from wages.
- Any attempt to recoup additional “admin costs” via wage deductions is questionable unless clearly agreed upon and lawful.
Training costs and training agreements
- Some companies require training agreements where employees commit to stay for a certain period or reimburse training costs if they leave early.
- For such agreements to be acceptable:
  - The training must be real and substantial (not just basic orientation).
  - The amount to be reimbursed must be reasonable, often amortized over time.
  - Deductions from wages to recover unpaid training costs must be:
    - Based on a clear, signed agreement,
    - Lawful and not contrary to labor standards, and
    - Implemented with transparency and due process.
Important line: No wages before start = nothing to deduct from

From a legal standpoint:

Before the employment start date, the person is usually not yet an employee, thus:
- They are not yet earning wages; and
- There is technically no “wage” to deduct from.
Any “deduction” related to that period is really:
- Either (a) an attempt to recoup pre-employment costs from future wages, or
- (b) an accounting presentation of pro-rating (not paying for days before start date).

To be lawful, deductions from future wages for pre-employment costs must comply with the rules on wage deductions discussed above.

VIII. Payroll Cutoffs and First Pay: How It Usually Works

First pay often causes confusion.

Monthly-paid employees
- Monthly salary usually includes all days of the month, including rest days and regular holidays within the month, subject to rules.
- When an employee starts mid-period, the employer typically pro-rates:
  - They calculate daily rate (for payroll purposes) and
  - Pay only for days from start date up to the cutoff.
Daily-paid employees
- Paid strictly for days actually worked (plus any legally required holiday/rest day pay).
- If they start mid-period, they are simply paid for those actual workdays.
Why it looks like a “deduction”
- Payslips often show full-period basic salary, then “less: unpaid days.”
- This is just formatting, not a penalty, as long as there was no work and no employment on those days.

IX. “No Work, No Pay” vs. Abuse of Deductions

Even when “no work, no pay” applies, employers must not abuse the rule or use it to justify illegal deductions.

Examples of problematic practices:

Stating a start date of the 1st but instructing the employee to report later, then still treating earlier days as “absences” and deducting them.
Deducting arbitrary “processing fees”, “placement fees”, or “onboarding fees” from wages that effectively shift employer costs to the worker.
Charging excessive training costs or uniforms in a way that brings take-home pay below minimum.
Using blank authorization forms to justify all kinds of deductions not clearly understood by the employee.

Even if the employee “consents,” if the arrangement undermines minimum labor standards, the deduction can still be considered unlawful.

X. Practical Scenarios

Scenario 1: First payslip shows “deduction” for days before start date
- Likely just proration to reflect the actual start date.
- Check:
  - Does the total pay match the days you actually worked?
  - Is your daily equivalent at least minimum wage?
Scenario 2: Deduction labeled “pre-employment medical exam”
- Check:
  - Did you sign a clear, specific authorization?
  - Is the amount reasonable and not disguised penalty?
  - After deduction, do you still receive at least minimum wage for days worked?
- If no clear written consent or deduction seems abusive, it may be questionable.
Scenario 3: Deduction for “training bond” after resigning early
- Check:
  - Did you sign a training agreement describing the training, cost, and service period?
  - Was the training truly substantive, not just basic orientation?
  - Is the amount proportionate (e.g., amortized, not full amount after some service)?
Scenario 4: Employment never actually started but employer demands “penalty”
- Without actual employment and wages, the employer cannot deduct anything.
- If they claim damages, that’s a civil matter, not a wage deduction issue, and would need to be proven in court — which is rare for ordinary employment situations.

XI. Remedies for Questionable Deductions

If an employee believes deductions related to pre-employment or pre-start periods are illegal or excessive, they may:

Clarify internally
- Ask HR/payroll for a detailed breakdown of the computation.
- Request copies of any deduction authorizations you supposedly signed.
Use company grievance mechanisms
- If the company has a grievance procedure, follow it: submit a written complaint, seek mediation with HR, etc.
Seek assistance from DOLE
- File a request for assistance under the Single Entry Approach (SEnA) for mediation.
- If unresolved, file a formal money claim complaint before the proper DOLE office or labor arbiter (money claims generally prescribe in three years from the time they accrued).
Keep records
- Keep copies of:
  - The offer letter/contract,
  - Payslips,
  - Any written authorizations for deductions,
  - Any communication about pre-employment expenses or training bonds.

XII. Best Practices for Employers and Employees

For employers

Clearly state in offer letters:
- Start date,
- Salary basis (monthly/daily; inclusive/exclusive of rest days),
- Whether pre-employment training will be paid,
- What pre-employment costs (if any) will be shouldered by whom.
Avoid labeling basic proration as “penalties” or “absences” when there was no employment yet; use clear terms like “prorated salary due to mid-period start.”
Ensure all wage deductions:
- Are within legal grounds,
- Have informed written consent, and
- Do not reduce wages below statutory minimum or defeat labor standards.

For employees

Read job offers and contracts carefully:
- Look for clauses on start dates, training, and cost-sharing of pre-employment expenses.
Be cautious about signing:
- Blank authorizations
- Very broad “I agree to any deduction the company may impose” clauses
Keep copies of all documents, especially:
- Offers, contracts, training agreements,
- Payslips, and written consents for deductions.

XIII. Summary

The no work, no pay rule in the Philippines means no wages are due for days where no work was performed, except where law, CBA, or company policy grants pay.
Before the employment start date, there is generally no employer–employee relationship, so there is no right to wages and technically nothing to deduct.
What often appears as “deductions” for pre-start days is usually just proration of salary — lawful if accurate and transparent.
Wage deductions (including those meant to recover pre-employment costs) are strictly regulated: they must be legal, clearly authorized in writing, reasonable, and not defeat minimum wage and labor standards.
Employees may question and challenge deductions they believe are improper, and may seek assistance from DOLE if needed.

This article is for general information only and does not constitute legal advice. Specific situations may have details that change the analysis, so consulting a lawyer or DOLE office is advisable for particular cases.