Here’s a practice-oriented, everything-you-need guide (Philippine context) to retained and delayed wages of construction laborers—what’s lawful (and what’s not), how often wages must be paid, when deductions are allowed, what happens if the project owner hasn’t paid the contractor, and exactly how workers (and HR) can fix problems fast.

quick disclaimer: This is general information, not legal advice. CBAs, project contracts, and updated wage orders in your region can add rules on top of the Labor Code.

1) Who’s covered (and typical employment set-ups)

Rank-and-file construction workers—daily-paid, piece-rate (“pakyaw”), time-rate, or project employees—are covered by wage and benefit laws (minimum wage, OT/night differential, holiday/rest-day pay, 13th-month pay, SSS/PhilHealth/Pag-IBIG, etc.).
Project employment is common: the relationship lasts for the project/phase. Completion of the project ends the employment without separation pay. Terminating before completion for business reasons (redundancy/retrenchment/closure) triggers separation pay.
Contracting chains (owner → general contractor → subcontractor) are normal. The project owner (principal) is solidarily liable with the contractor/sub-contractor for unpaid wages and benefits of the workers on that project. “We haven’t been paid by the owner yet” is not a valid excuse to delay/withhold wages.

2) Pay frequency & mode (and why “retainage” for workers is illegal)

A) Frequency and timing

Wages must be paid at least twice a month, at intervals not exceeding 16 days (daily/time-rate).
Piece-rate/pakyaw workers must be paid for the work accomplished within the same frequency (or as milestones end), never at the mercy of the contractor’s progress billing.
Final pay when employment ends: as a best-practice benchmark, within 30 days of separation (sooner is better), including 13th-month pro-rata and accrued benefits.

B) Where/how to pay

In legal tender, or via ATM/payroll card or bank transfer with the worker’s consent and no fees charged to the worker.
Give payslips every pay day, showing days/hours worked, piece quantities, rates, OT/night/holiday premiums, and all deductions.

**C) “Retention money” versus wages

In construction contracts, owners retain 5–10% from contractor billings as retention money to ensure project completion.
That retention applies to the contractor’s billings—not to workers’ wages.
Any scheme that “retains” part of workers’ wages (e.g., “we’ll release 20% at project closeout”) is an unlawful withholding of wages.

3) Legit deductions vs illegal withholdings

Allowed deductions (when requirements are met):

Statutory: SSS, PhilHealth, Pag-IBIG, withholding tax.
Union dues/agency fee: with proper authorization/CBA.
Company loans/advances: with the worker’s written consent, subject to reasonable caps so take-home pay isn’t wiped out.
Loss/damage clearly due to the employee’s fault or negligence and after due process (investigation, written explanation); the deduction must be reasonable and not exceed the actual loss.

Prohibited practices (common in construction—and actionable):

“Wage retention” or forced savings without clear, written, voluntary consent (and even then, you must still meet pay-frequency rules).
Kickbacks (“SOP”) from wages or 13th-month.
Deposits required as condition for hiring or for use/custody of tools—unless authorized by law and never to cover normal wear/tear.
Withholding wages because the owner delayed paying the contractor, or because a foreman’s cash is short.
Paying with promissory notes, coupons, or scrip instead of money.
Seizing ATM cards/PINs or IDs to control access to wages.
“No ID, no pay” if the worker’s identity is otherwise ascertainable (you must provide a reasonable alternative).

4) Minimum wage, piece-rate math, and premium pay (clean rules you can use)

A) Minimum wage floor applies to everyone

Piece-rate/pakyaw output must convert to at least the daily minimum for 8 hours of normal work in the region, or the hourly minimum for the hours actually worked.
If output pay falls short, the employer tops up to the minimum.

B) Premium pay quick table (for non-exempt workers)

Overtime (OT): >8 hrs/day → +25% of hourly rate (regular day).
Night shift differential (NSD): 10:00 p.m.–6:00 a.m. → +10% of hourly rate.
Rest day work (first 8 hrs): +30% of daily rate; OT on rest day → add +30% on top of OT rate.
Regular holiday (first 8 hrs): 200% of daily rate; if also rest day → 260%; OT on regular holiday → add +30% of the holiday hourly rate.
Special non-working day: 130% (or 150% if also rest day); OT → add +30% of the special-day hourly rate.

C) Travel/wait time at site

Waiting time controlled by the employer (e.g., queuing for toolbox talks, safety clearances, or being required to stay on site) counts as hours worked.

5) Delayed wages: remedies, interest, and fees

A) Administrative route (fastest to trigger compliance)

Barangay: Optional if parties are in one city/municipality and the issue is purely civil; wage claims usually go straight to DOLE/NLRC.
DOLE Regional Office (Labor Inspectorate / SEnA desk):
- SEnA (Single-Entry Approach) is a free conciliation channel. File a Request for Assistance (RFA)—often enough to prompt payment.
- For clear wage violations, DOLE can inspect and issue a Compliance Order (administrative enforcement).
- Where there is labor-only contracting or unpaid wages on site, DOLE may tag the principal (project owner) for solidary liability.

B) NLRC / Arbitration route (money claims)

File a complaint for money claims (unpaid wages, OT, premiums, 13th-month, illegal deductions, damages).
Attorney’s fees: when workers are compelled to litigate to recover wages, awards typically include 10% attorney’s fees.
Legal interest: monetary awards earn legal interest (6% p.a.) from the time the claim is judicially or administratively demanded until full payment.

C) Criminal/penal exposure

Willful non-payment or underpayment of wages and obstruction of DOLE orders can carry fines and/or imprisonment for responsible officers. (Use this leverage wisely—most matters resolve at SEnA.)

6) “Owner hasn’t paid us yet”—who pays the workers?

Not a defense. Wage laws protect the worker’s direct, timely pay.
The contractor/sub-contractor remains the employer; but the principal (project owner or general contractor) is solidarily liable for wage deficiencies of workers on the project.
Workers can go straight after the principal (administratively or at NLRC) when the contractor is insolvent or stalling.

7) Project employment, suspension of work, and “no work, no pay”

When work is truly suspended (rain-outs, force majeure, permit holds), the default rule is no work, no pay, unless your CBA/company policy says otherwise (e.g., rain allowance).
If suspension stretches, employers sometimes place workers on floating status (temporary layoff). That cannot exceed 6 months in total. Past that, continued off-work status generally becomes constructive dismissal, exposing the employer to separation/backwages unless they recall or lawfully terminate for authorized cause.

8) Handover, final pay, and 13th-month

13th-month pay (for all rank-and-file) is pro-rated based on actual basic salary earned within the calendar year.
Final pay on project completion should include last wages, pro-rated 13th-month, cashable leaves (if policy/CBA), minus lawful deductions only.
Non-issuance of Certificate of Employment or withholding final pay to force workers to sign waivers is unlawful coercion (waivers must be voluntary, clear, and for a reasonable consideration).

9) What HR and contractors should do (to stay compliant)

Pay practices

Set fixed paydays (e.g., 15th & 30th), never beyond 16 days apart.
Use biometric/daily time records (DTR) or piecework sheets signed by workers and foremen.
Issue payslips that itemize hours/output and every deduction.
Never “retain” a portion of wages to cover punch-list or closeout.

Contracting & cash-flow

Price your bids to cover full wage obligations independent of the owner’s retention.
Include in sub-contracts: “Labor shall be paid on schedule notwithstanding owner retention; failure is material breach.”
Keep HMO/SSS/PhilHealth/Pag-IBIG current; don’t pass employer contributions to workers.

Documentation

Keep employment contracts (even for project hires), deployment lists, daily manpower reports, and payroll registers for at least 3 years (inspectors will ask).

10) What workers can do (and bring) if pay is delayed

Step-by-step

Ask in writing (text/email is fine): “My wages for [dates] are unpaid; please release on or before [date].”
Collect proof: ID, site gate passes, DTR/photos of the logbook, piecework sheets, chats with foreman, any payslips.
SEnA filing at DOLE: bring the above; ask to include the project owner as solidarily liable.
If not resolved, file NLRC money claims (you can file per worker or as a group).
Don’t sign blanket waivers unless the correct amounts are paid and the terms are clear.

Red flags that help your case

Repeated “next billing pa” excuses.
ATM or ID confiscation.
Payslips that don’t show how piecework converted to minimum wage.
No payroll records available on request.

11) FAQs (fast answers)

Q: Our subcontractor keeps “retaining” 10% of wages until turnover. Legal? No. Retention is between owner and contractor. Workers must be paid in full on regular paydays.

Q: We’re piece-rate. Some weeks we earned below the daily minimum. Employer must top up to the daily/hourly minimum for hours worked, and still pay OT/night/holiday premiums when applicable.

Q: The foreman says “no pay” because of rework. You can only deduct for proved loss/damage due to your fault and after due process, and only the actual, reasonable loss—not open-ended “rework penalties.”

Q: We finished the project. When is final pay due? Best practice is within 30 days (sooner if possible). You still get pro-rated 13th-month.

Q: Can we claim interest and attorney’s fees? Yes—6% legal interest on monetary awards and typically 10% attorney’s fees when you had to sue to recover wages.

Q: Owner says “talk to your subcontractor, not us.” You may include the owner in DOLE/NLRC cases due to solidary liability for on-site wage violations.

12) Simple templates you can adapt

A) Worker wage-demand (send to contractor/sub-con & copy the owner)

Subject: Release of Wages for [Dates] – Project [Name/Site] I worked as [position] from [dates] under [contractor/sub-con]. My wages for [pay periods] remain unpaid totaling ₱[amount] based on our DTR/piece sheets. Kindly release payment on or before [date]. Otherwise, I will seek assistance from DOLE/NLRC and include the project owner for solidary liability. Thank you.

B) Sub-contract clause (for HR/contract admins)

“Sub-contractor shall pay all workers’ wages, OT/premiums, and benefits on statutory paydays regardless of Owner’s payment status. Wage retention is prohibited. Failure constitutes material breach. Sub-contractor agrees that Owner/Contractor may pay workers directly and offset against Sub-contractor’s billings.”

Bottom line

Retaining any portion of a construction worker’s wages is illegal; pay must come at least twice monthly, with clear payslips and only lawful, documented deductions.
Delayed wages can be enforced quickly through DOLE (SEnA/inspection) and NLRC, with solidary liability reaching the project owner if needed.
Piece-rate pay must still meet minimum wage floors and premium pay rules.
Employers should budget independently of owner retention and keep records tight; workers should document work and ask in writing—then use SEnA/NLRC if pay isn’t released.

If you share the region, daily/piece rates, and the unpaid dates, I can (a) compute the exact underpayment (including OT/night/holiday premiums), and (b) draft a ready-to-file SEnA RFA you can submit to DOLE.