I. Introduction

Domestic work is a recognized form of employment in the Philippines. A person hired to perform household work is not merely “help” in the informal sense. The law treats the domestic worker as an employee with statutory rights, and the employer as a person with legal duties.

Two issues often arise in household employment:

Referral fees, placement fees, commissions, or deductions connected with the hiring of a domestic worker; and
End-of-service pay, final wages, unpaid benefits, separation-related payments, and other amounts due when the domestic worker’s service ends.

These matters are governed primarily by the Domestic Workers Act, commonly known as the Batas Kasambahay, together with labor rules, civil law principles, social legislation, criminal law provisions on coercion or trafficking where applicable, and rules on recruitment and private employment agencies.

The legal policy is protective. Domestic workers are often economically vulnerable, live inside the employer’s home, and may be dependent on the employer for food, shelter, and mobility. For that reason, Philippine law regulates wages, deductions, deposits, recruitment practices, benefits, and termination.

II. Who Is a Domestic Worker?

A domestic worker, commonly called a kasambahay, is a person engaged in domestic work within an employment relationship. This may include:

general househelp;
yaya or child caregiver;
cook;
laundry worker;
gardener;
driver, if performing domestic household service;
other persons who regularly perform household work.

The key point is that the work is performed in or for a household and under the direction of the household employer.

A kasambahay is different from:

a family member who helps without employment;
a service provider hired through an independent business;
a person who performs work only occasionally;
a company employee assigned to a household but employed by the company;
a caregiver or nurse under a separate professional arrangement, depending on the facts;
a driver or gardener employed by a business rather than a household.

The label used by the parties does not control. If the facts show household employment, the worker may be protected as a kasambahay.

III. Who Is the Employer?

The employer is the person who hires, pays, controls, or benefits from the domestic worker’s service in the household.

In many homes, one family member handles hiring and payment, while the entire household benefits. For legal purposes, the employer is usually the person who entered into the employment arrangement and exercises control over the worker.

The employer’s obligations include payment of wages, respect for working conditions, provision of rest periods, remittance of social contributions where applicable, and payment of amounts due upon termination.

IV. What Are Referral Fees?

A referral fee is money or other consideration paid in exchange for introducing, recommending, placing, or connecting a domestic worker with an employer.

Referral fees may appear in different forms:

agency placement fee;
finder’s fee;
commission to a middleman;
referral fee to a former employer;
fee paid to a barangay contact;
deduction from the worker’s first salary;
“processing fee” or “transportation fee” charged to the worker;
salary advance deducted to reimburse the person who referred the worker;
payment to a recruiter who brought the worker from the province;
amount charged by an employment agency to the household employer.

The legal treatment depends on who charges the fee, who pays it, whether the person is licensed, whether the fee is imposed on the domestic worker, and whether the fee results in illegal deduction, debt bondage, or exploitation.

V. Core Legal Principle on Referral Fees

The central rule is this: a domestic worker should not be charged placement or recruitment-related fees as a condition for employment.

The protective purpose of the law is to prevent the worker from beginning employment already indebted to the agency, recruiter, employer, or middleman. A kasambahay’s wages are meant to support the worker and the worker’s family, not to repay unlawful hiring charges.

Thus, any arrangement where the worker is required to pay a referral fee, placement fee, processing fee, or recruiter’s commission is legally risky and may be prohibited, especially when collected directly from the worker or deducted from wages.

VI. Referral Fees Charged to the Employer

An employer may engage a legitimate employment agency or referral service to find a domestic worker. In that case, the agency’s service fee is generally a matter between the employer and the agency.

However, the employer should ensure that:

the agency is legitimate and properly authorized;
the agency is not charging the domestic worker illegal fees;
the agency is not taking the worker’s documents;
the agency is not requiring the worker to repay the employer’s fee;
the worker’s wages are paid directly and in full;
no hidden deduction is made from the worker’s salary;
the worker freely consents to the employment.

An employer who knowingly participates in a scheme that shifts recruitment fees to the domestic worker may face legal consequences.

VII. Referral Fees Charged to the Worker

A referral fee charged to the kasambahay is usually problematic. It may be unlawful if it functions as a placement fee, recruitment charge, or condition for getting the job.

Examples of questionable or unlawful arrangements include:

“You must pay one month’s salary to the agency after you start.”
“Your first two months’ salary will go to the recruiter.”
“The employer paid your placement fee, so it will be deducted from your salary.”
“You cannot leave until you repay the referral fee.”
“Your ATM card will be kept until the agency fee is fully paid.”
“Your ID will be held as security for the fee.”

These arrangements may violate labor protections on wages, deductions, freedom of movement, and recruitment practices. In severe cases, they may raise issues of forced labor, debt bondage, trafficking, illegal recruitment, or unjust enrichment.

VIII. Referral Fees Paid to a Former Employer

Sometimes a former employer refers a domestic worker to a new employer and asks for a referral fee.

A simple goodwill referral is not necessarily illegal if the former employer merely introduces the parties and the new employer voluntarily gives a token or payment. However, the arrangement becomes legally problematic if:

the fee is charged to the worker;
the worker’s release or documents are conditioned on payment;
the worker is treated as transferable property;
the former employer receives payment for “releasing” the worker;
the new employer deducts the fee from the worker’s wages;
the worker is forced to continue working to pay the fee.

A domestic worker is not property and cannot be bought, sold, transferred, or assigned as if the worker were part of the household’s assets.

IX. Referral Fees Paid to Relatives, Neighbors, or Barangay Contacts

Informal referrals are common. A relative, neighbor, barangay official, or friend may know someone looking for household work.

If the employer gives the referrer a voluntary token from the employer’s own money, and the worker is not charged or burdened, the legal risk is lower.

But the arrangement becomes questionable if:

the referrer demands payment from the worker;
the referrer takes part of the worker’s wages;
the employer agrees to deduct the referral fee from salary;
the worker is misled about wages or conditions;
the referrer controls the worker’s movement or documents;
the referrer regularly recruits workers without authority.

Regular recruitment for compensation may require compliance with laws on private employment agencies and recruitment.

X. Agency Recruitment of Domestic Workers

Private employment agencies may participate in the hiring of domestic workers, but they are regulated. The purpose of regulation is to prevent illegal recruitment, excessive fees, abuse, misrepresentation, and trafficking.

A responsible employer should ask:

Is the agency registered or licensed?
Does the agency issue receipts?
Does the agency use a written agreement?
Does the agency explain the worker’s rights?
Does the agency prohibit salary deductions for placement?
Does the agency keep the worker’s original documents?
Does the agency impose penalties if the worker leaves?
Does the agency provide replacement guarantees that unfairly pressure the worker?
Does the agency coordinate with government rules?

The employer should avoid agencies that treat domestic workers as commodities or promise replacement workers without regard to lawful termination and worker consent.

XI. Salary Deductions for Referral Fees

The employer generally should not deduct referral fees, agency fees, or recruitment expenses from the domestic worker’s wages.

Wages must be paid directly, regularly, and in full, subject only to lawful deductions. Any deduction must have a legal basis and should not reduce the worker’s statutory wage rights.

Examples of unlawful or questionable deductions include:

deduction for agency commission;
deduction for transportation arranged by the recruiter without proper agreement;
deduction for the employer’s agency fee;
deduction for medical tests required by the employer;
deduction for uniforms required by the employer;
deduction for household items allegedly damaged without due process or proof;
deduction for advances that are actually disguised placement fees.

A written acknowledgment of a deduction does not automatically make it valid. Consent may be defective if the worker had no real choice.

XII. Employer-Paid Referral Fees and Minimum Wage Compliance

Even if the referral fee is charged only to the employer, the employer must still pay the domestic worker at least the legally required minimum wage for kasambahay in the applicable area.

The employer cannot say:

“I already paid the agency, so your salary will be lower.”
“Your first salary will reimburse the agency fee.”
“You owe me because I spent money to hire you.”

The cost of recruitment is not a legal reason to underpay the worker.

XIII. Referral Fee Versus Salary Advance

A true salary advance is different from a referral fee.

A salary advance is money given by the employer to the worker ahead of the regular pay date, to be offset against future wages by agreement.

A referral fee is payment for getting the job.

A salary advance may be lawful if:

it is voluntary;
it is actually received by the worker;
it is documented;
deductions are reasonable;
the worker is not reduced below legal protections;
it is not used as a disguised placement fee;
it does not prevent the worker from leaving employment.

A supposed salary advance becomes suspicious if the money went to the recruiter, not the worker.

XIV. Transportation and Processing Costs

Transportation costs from the worker’s home province to the employer’s home are common in domestic work.

These expenses may be handled in different ways:

the employer pays them as part of recruitment cost;
the worker pays them voluntarily;
the agency pays them;
the parties agree on an advance.

The safest practice is for the employer to shoulder necessary recruitment-related transportation costs without deducting them from salary, especially if the employer requested the worker to travel. If the worker personally borrowed money for transportation, any repayment arrangement should be fair, documented, and not coercive.

Transportation costs should not be used to trap the worker in service.

XV. Document Retention and Referral Fee Abuse

A common abusive practice is the retention of documents to force repayment of referral fees or advances.

Employers, agencies, and recruiters should not keep the worker’s:

passport;
birth certificate;
IDs;
ATM card;
bank passbook;
cellphone;
employment records;
personal documents.

Keeping documents as security for a referral fee may be evidence of coercion or unlawful control. The worker should have access to personal documents at all times.

XVI. End-of-Service Pay: Meaning and Scope

“End-of-service pay” is not always a single statutory benefit with one fixed formula for all kasambahay situations. In household employment, the phrase may refer to the total amount due when employment ends, including:

unpaid wages up to the last day worked;
unpaid wage differentials;
unpaid rest day compensation, if applicable;
unpaid service incentive leave pay, if applicable;
unpaid 13th month pay, if applicable;
unpaid social contribution obligations;
return of deposits or unauthorized deductions;
payment in lieu of notice, if applicable;
indemnity or damages for unlawful termination, depending on facts;
separation pay if required by contract, settlement, or specific legal basis;
other agreed benefits.

The employer should settle all amounts due promptly and transparently.

XVII. Is There Automatic Separation Pay for Kasambahay?

A frequent question is whether a kasambahay is automatically entitled to separation pay whenever the employment ends.

The answer depends on the cause and circumstances of termination.

For ordinary domestic employment, there is no universal rule that every end of service automatically entitles the kasambahay to one month separation pay or one-half month per year of service in the way some regular employees may be entitled under specific Labor Code authorized causes.

However, the kasambahay must be paid all earned wages and benefits. Additional amounts may be due if:

the employment contract provides separation pay;
the employer terminates without proper cause or notice;
the termination violates the Batas Kasambahay;
the employer and worker agree to a settlement;
the employer has a policy or practice of granting such pay;
the worker was underpaid and wage differentials must be paid;
the facts fall under a legal rule requiring compensation.

Thus, “end-of-service pay” should be analyzed by item, not assumed as one lump sum.

XVIII. Final Wages

The most basic end-of-service obligation is payment of wages earned up to the last day of work.

Final wages should include:

salary for days actually worked in the last pay period;
unpaid salary from prior periods;
wage differentials if the worker was paid below the applicable minimum;
agreed allowances that are wage-like in nature;
unpaid overtime-type compensation only if legally or contractually applicable under the facts.

Payment should be direct and preferably documented with a signed payroll, receipt, or final pay computation.

XIX. Minimum Wage for Domestic Workers

Kasambahay minimum wages are set by law and may vary by region or wage order. Employers must check the applicable current rate in their area.

Underpayment creates liability for wage differentials. If a domestic worker served for months or years below the legal minimum, the final pay should include unpaid wage differentials, subject to legal rules on prescription and proof.

Example:

If the legal monthly minimum wage is higher than the salary actually paid, the employer may owe the difference for the covered period.

The employer cannot justify underpayment by saying that the worker received food and lodging. Board and lodging are normally part of household employment conditions and cannot be used to evade minimum wage.

XX. 13th Month Pay

Domestic workers are generally entitled to 13th month pay if they have rendered at least one month of service during the calendar year.

The usual computation is:

Total basic salary earned during the calendar year ÷ 12 = proportionate 13th month pay

If employment ends before December, the kasambahay is usually entitled to the proportionate 13th month pay earned up to the date of separation.

Example:

If the worker earned ₱6,000 per month and worked for six months in the calendar year, the proportionate 13th month pay is:

₱6,000 × 6 ÷ 12 = ₱3,000

If salary varied, use total basic salary actually earned during the year divided by 12.

XXI. Service Incentive Leave

A kasambahay who has rendered at least one year of service is entitled to annual service incentive leave under the Batas Kasambahay.

If leave is unused, the treatment may depend on the applicable rules and the employment arrangement. As a protective practice, employers should account for accrued and unused leave benefits when computing final pay.

The employer should keep records of leave taken and remaining leave credits.

XXII. Weekly Rest Period

A domestic worker is entitled to a regular rest period. If the worker voluntarily agrees to work during a rest period, the parties should clearly agree on the corresponding arrangement, whether additional pay, replacement rest day, or other lawful treatment.

At the end of employment, disputes often arise when a worker claims never to have been given rest days. Employers should keep records and avoid requiring continuous work without rest.

A live-in arrangement does not mean the worker is on duty twenty-four hours a day.

XXIII. Social Benefits: SSS, PhilHealth, and Pag-IBIG

Domestic workers are covered by social legislation. Depending on wage level and applicable rules, employers may be required to register the worker and remit contributions to:

Social Security System;
PhilHealth;
Pag-IBIG Fund.

At the end of service, the employer should ensure that contributions due during employment were properly remitted. Failure to register or remit may expose the employer to liability, including arrears, penalties, and administrative consequences.

Final settlement should not ignore social contributions. Even if the worker receives cash, that does not automatically cure failure to remit statutory contributions.

XXIV. Return of Personal Property

Upon end of service, the employer must return the worker’s personal belongings, including:

clothes;
cellphone;
IDs;
documents;
money;
bank cards;
personal records;
personal appliances or items;
medicines;
religious items.

Withholding personal property to force repayment, prevent departure, or pressure a settlement is legally dangerous.

XXV. Notice of Termination

The Batas Kasambahay recognizes termination by either party under certain grounds. The required notice or consequence may depend on who ends the employment and why.

In general, the safest practice is:

the party ending the employment should give reasonable written notice;
the reason should be documented;
final pay should be computed;
the worker should be allowed to leave freely;
the employer should not use threats, detention, or document retention.

If the employer terminates without justifiable reason or without required notice, payment in lieu of notice or other compensation may be due depending on the circumstances.

If the worker leaves without notice and without justifiable reason, the employer may have limited remedies, but the employer still cannot withhold earned wages unlawfully.

XXVI. Termination by the Employer

An employer may terminate the kasambahay for lawful or justifiable reasons, such as serious misconduct, willful disobedience of lawful orders, gross negligence, fraud, commission of a crime against the employer or household, or other causes recognized by law or contract.

However, the employer should be careful. Accusations should not be used as an excuse to avoid paying final wages. If the employer alleges theft or misconduct, the employer may report the matter to proper authorities, but earned wages and lawful benefits should still be handled correctly unless there is a lawful basis for withholding a specific amount.

Employers should avoid:

public shaming;
threats;
illegal detention;
confiscation of belongings;
forced signing of quitclaims;
withholding salary without proof;
physical or verbal abuse.

XXVII. Termination by the Domestic Worker

A kasambahay may resign or terminate employment. Reasons may include:

better employment;
family emergency;
illness;
abuse;
nonpayment of wages;
lack of rest;
unsafe working conditions;
personal reasons.

If the worker resigns, the employer must still pay earned wages and accrued benefits. The employer should not refuse payment merely because the worker is leaving.

If the worker leaves without notice, the employer may raise contractual or legal issues, but unpaid earned wages should not be casually forfeited.

XXVIII. Termination Due to Abuse, Nonpayment, or Unsafe Conditions

If the domestic worker leaves because of employer abuse, nonpayment of wages, illegal deductions, lack of food, deprivation of rest, threats, or unsafe conditions, the worker may have valid grounds to end the employment immediately.

In such cases, the employer may still owe:

unpaid wages;
wage differentials;
13th month pay;
leave benefits;
return of deductions;
damages or other relief, depending on facts;
social contribution arrears.

Severe abuse may also lead to criminal, civil, administrative, or barangay-level proceedings.

XXIX. Death of the Employer or Worker

If the employer dies, the employment arrangement may end or continue depending on the household and agreement. Unpaid wages and benefits earned before death remain obligations that may be claimed from the estate or responsible household arrangement.

If the domestic worker dies, unpaid wages and benefits may be payable to the worker’s lawful heirs or representatives. Social benefits may also arise depending on SSS, PhilHealth, Pag-IBIG, or other coverage.

The employer should not ignore final pay simply because the employment ended by death.

XXX. End-of-Service Pay Computation

A practical final pay computation should include the following categories:

A. Unpaid Salary

Compute the daily equivalent of the monthly wage if the worker did not complete the month.

A common practical method is:

Monthly salary ÷ agreed working days or calendar basis × days worked

For domestic work, because the wage is usually monthly and live-in, the parties should use a fair and documented method.

B. Wage Differentials

If the worker was paid below the legal minimum:

Legal minimum wage – actual wage paid = monthly differential

Multiply by the number of months covered.

C. Proportionate 13th Month Pay

Total basic salary earned during the calendar year ÷ 12

D. Unused Leave Benefits

If payable or agreed:

Daily wage × unused leave days

E. Refund of Unauthorized Deductions

Add back any deductions that were not legally allowed, such as illegal referral fees, placement fees, excessive advances, or unexplained charges.

F. Social Contribution Arrears

These may need to be paid directly to the relevant agencies rather than simply handed to the worker, depending on the contribution type.

G. Contractual Benefits

Add any benefits promised in writing or consistently given as a practice.

XXXI. Sample Final Pay Computation

Assume:

monthly salary: ₱6,000;
last month worked: 10 days out of 30;
total salary earned from January to June: ₱36,000;
no unpaid prior salary;
no illegal deductions;
no unused leave issue.

Final salary for last 10 days:

₱6,000 ÷ 30 × 10 = ₱2,000

Proportionate 13th month pay:

₱36,000 ÷ 12 = ₱3,000

Total final pay:

₱2,000 + ₱3,000 = ₱5,000

If there are wage differentials, unpaid benefits, or illegal deductions, those must be added.

XXXII. Quitclaims and Waivers

Employers sometimes ask a domestic worker to sign a quitclaim or release after receiving final pay.

A quitclaim may be valid if:

the worker freely signed it;
the amount paid is fair and reasonable;
there was no fraud, intimidation, or coercion;
the worker understood the document;
the document does not waive non-waivable statutory rights;
the worker actually received the money.

A quitclaim is vulnerable if:

signed under pressure;
written in a language the worker does not understand;
signed before payment;
used to cover illegal underpayment;
grossly inadequate;
accompanied by threats or document retention.

The better practice is to issue a transparent final pay computation and receipt rather than rely on a broad waiver.

XXXIII. Written Employment Contract

The Batas Kasambahay requires or encourages clarity in the terms of domestic employment. A written contract helps prevent disputes over wages, duties, rest days, benefits, and termination.

A good contract should state:

name and address of employer;
name and address of domestic worker;
duties and job description;
wage rate;
pay schedule;
rest day;
sleeping arrangement for live-in workers;
meals and basic needs;
social benefit registration;
leave benefits;
term of employment, if any;
termination procedure;
prohibition on illegal deductions;
no placement fee to be charged to the worker;
emergency contact;
agreement on transportation, if any.

A written contract cannot reduce statutory rights.

XXXIV. Referral Fee Clause in a Kasambahay Contract

A protective clause may state:

The domestic worker shall not be charged any placement fee, referral fee, recruitment fee, processing fee, or similar charge as a condition for employment. Any agency or referral fee, if lawfully incurred by the employer, shall be for the employer’s account and shall not be deducted from the domestic worker’s wages.

This clause helps prevent future disputes and protects both parties.

XXXV. Final Pay Clause in a Kasambahay Contract

A useful clause may state:

Upon termination of employment, the employer shall pay all wages and benefits earned by the domestic worker up to the last day of service, including proportionate 13th month pay and other benefits due under law or this agreement. The employer shall provide a written computation and shall not withhold personal documents or belongings.

XXXVI. Agency Replacement Guarantees

Some agencies offer employers a “replacement guarantee” if the domestic worker leaves within a certain period.

Employers should be careful. A replacement guarantee is a commercial arrangement between employer and agency. It must not result in:

forcing the worker to continue against will;
penalizing the worker;
withholding worker’s wages;
requiring the worker to repay agency fees;
transferring the worker without consent;
restricting the worker’s movement;
blacklisting or threatening the worker.

The worker’s legal rights are not erased by the agency’s replacement policy.

XXXVII. Live-In Domestic Workers

Many kasambahay are live-in workers. This creates special concerns.

The employer must not treat the worker as available at all hours. The worker must have rest, privacy, humane sleeping arrangements, adequate food, and freedom from abuse.

At end of service, the worker should be allowed to pack belongings, communicate with family, and leave safely. If the worker came from another province, the parties should handle transportation humanely and consistently with their agreement.

Live-in status does not justify withholding wages for food and lodging unless the law clearly allows a specific treatment. In general, household board and lodging should not be used to reduce statutory wage rights.

XXXVIII. Domestic Workers Hired From Provinces

Recruitment from provinces is common and often involves relatives, agencies, bus fares, and informal advances.

Employers should avoid practices that create debt bondage. A worker should not be told that she cannot leave because the employer paid for fare, agency fees, or referral charges.

If transportation assistance is given, document whether it is:

a gift;
employer-shouldered recruitment cost;
salary advance actually received by the worker;
loan payable under fair terms.

Any deduction should be lawful, reasonable, and not a disguised placement fee.

XXXIX. Children and Young Domestic Workers

Special care is required where the worker is young. Philippine law has protections against child labor and exploitation. A child below the legal working age cannot be employed as a domestic worker. For young workers who are legally allowed to work under limited circumstances, additional protections apply.

Referral fee arrangements involving minors may raise serious concerns, including exploitation and trafficking.

Household employers should verify age through reliable documents and avoid hiring minors for domestic work.

XL. Illegal Recruitment and Trafficking Concerns

Referral fees and domestic work can overlap with illegal recruitment or trafficking when there is abuse.

Warning signs include:

worker is charged large placement fees;
worker’s documents are confiscated;
worker is transported under false promises;
worker is not allowed to leave;
worker is threatened with police action for debt;
salary is withheld for months;
worker is locked inside the house;
worker is transferred between employers;
worker is forced to work excessive hours;
worker is physically, sexually, or psychologically abused.

These facts may go beyond ordinary labor disputes and may involve criminal liability.

XLI. Remedies of a Domestic Worker

A domestic worker who is charged illegal referral fees or denied final pay may seek help from:

barangay officials, for conciliation where appropriate;
Local Social Welfare and Development Office;
Public Employment Service Office;
Department of Labor and Employment;
police or women and children protection desks in cases of abuse;
prosecutor’s office for criminal complaints;
Public Attorney’s Office;
courts, depending on the nature of the claim.

The proper forum depends on whether the issue is unpaid wages, illegal deduction, abuse, trafficking, criminal conduct, or contract dispute.

XLII. Remedies of an Employer

An employer may also have remedies if the domestic worker commits theft, fraud, serious misconduct, or abandons work in violation of an agreement.

However, the employer should use lawful remedies:

document the incident;
speak to the worker calmly;
make a barangay blotter or police report if necessary;
compute final pay separately;
avoid physical confrontation;
do not detain the worker;
do not confiscate documents;
do not withhold wages without lawful basis;
do not post defamatory statements online.

The employer’s grievance does not remove the worker’s basic rights.

XLIII. Barangay Settlement

Many kasambahay disputes are brought first to the barangay, especially where the parties live in the same city or municipality.

Barangay conciliation may help settle:

unpaid final wages;
return of belongings;
transportation home;
disputed deductions;
minor property damage claims;
misunderstandings about resignation.

However, serious labor violations, trafficking, child abuse, violence, or criminal offenses should not be treated as mere household misunderstandings.

XLIV. Documentation Best Practices for Employers

Employers should keep:

copy of employment contract;
copy of worker’s ID, with consent;
payroll records;
receipts of wage payments;
records of 13th month pay;
leave and rest day records;
SSS, PhilHealth, and Pag-IBIG registration and remittance records;
written acknowledgment of advances;
final pay computation;
receipt of returned belongings;
agency receipts, if any.

Good documentation protects both the employer and the worker.

XLV. Documentation Best Practices for Domestic Workers

Domestic workers should keep:

employment contract;
employer’s name, address, and contact details;
agency name and receipt, if any;
wage records;
screenshots or messages about salary and benefits;
proof of deductions;
copies of IDs;
social contribution records;
final pay computation;
receipts for any money received;
emergency contact information.

A worker should avoid surrendering original documents unless strictly necessary and should ask for their return immediately.

XLVI. Common Disputes

A. “The agency fee will be deducted from the worker’s salary.”

This is legally risky and often unlawful. Agency fees should not be shifted to the domestic worker.

B. “The worker left after one week; can the employer withhold salary?”

The worker should generally be paid for days actually worked. The employer may raise lawful claims separately, but earned wages should not be automatically forfeited.

C. “The worker damaged household items; can the employer deduct the cost?”

Deductions should not be made casually. There should be proof, due process, and a lawful basis. Ordinary wear and tear should not be charged to the worker.

D. “The worker borrowed money; can it be deducted from final pay?”

A genuine loan or salary advance may be offset if clearly documented and lawful. But it cannot be a disguised referral or placement fee.

E. “The employer paid for the worker’s fare from the province; can it be recovered?”

It depends on the agreement and circumstances. If it was an employer recruitment cost, it should not be deducted. If it was a documented personal advance to the worker, a fair repayment may be possible. It must not be used to prevent the worker from leaving.

F. “The worker was given food and lodging; can those be deducted from wages?”

As a rule, employers should not use food and lodging to reduce statutory wage obligations for domestic workers.

G. “Is final pay due even if the worker resigned?”

Yes. Earned wages and earned benefits remain due.

H. “Is final pay due even if the worker was terminated for misconduct?”

Earned wages and benefits generally remain due, although the employer may pursue lawful claims for proven wrongdoing.

XLVII. Practical Checklist for Employers at Hiring

Before hiring a kasambahay, the employer should:

Verify the worker’s age and identity.
Avoid charging or allowing referral fees to be charged to the worker.
Use a written employment contract.
State wage, duties, rest day, and benefits clearly.
Register with SSS, PhilHealth, and Pag-IBIG where required.
Pay wages directly and regularly.
Keep payroll records.
Do not keep the worker’s documents.
Clarify transportation or advances in writing.
Treat agency fees as the employer’s expense, not the worker’s debt.

XLVIII. Practical Checklist at End of Service

When employment ends, the employer should:

Determine the last day of work.
Compute unpaid wages.
Compute proportionate 13th month pay.
Account for unused leave benefits, if applicable.
Add wage differentials, if any.
Refund unauthorized deductions.
Settle documented lawful advances, if any.
Check social contribution compliance.
Return all personal belongings and documents.
Provide a written final pay computation.
Have the worker acknowledge receipt only after actual payment.
Avoid broad, coercive waivers.
Allow the worker to leave freely and safely.

XLIX. Sample Final Pay Receipt

Final Pay Receipt and Acknowledgment

I, [Name of Domestic Worker], acknowledge receipt from [Name of Employer] of the amount of ₱________ as payment of the following:

Unpaid salary up to [date]: ₱________
Proportionate 13th month pay: ₱________
Unused leave benefits, if any: ₱________
Refunds or adjustments: ₱________
Less lawful advances, if any: ₱________

Total amount received: ₱________

I confirm that I received the above amount on [date] in [cash/bank transfer/e-wallet]. I also confirm receipt of my personal belongings and documents, consisting of [list].

This acknowledgment refers only to the amounts actually paid and does not waive rights that cannot be waived under law.

Signed:

Domestic Worker

Employer

Witnesses:

L. Sample No-Referral-Fee Acknowledgment

No Placement or Referral Fee Acknowledgment

The employer and domestic worker acknowledge that the domestic worker has not been charged any placement fee, referral fee, recruitment fee, processing fee, or similar amount as a condition for employment.

Any lawful agency or referral fee incurred by the employer, if any, is for the employer’s account and shall not be deducted from the domestic worker’s salary or benefits.

Signed this ___ day of ________, 20.

LI. Sample Computation Form

Kasambahay Final Pay Computation

Name of Worker: __________________ Employer: __________________ Period of Service: ________________ Last Day Worked: _________________ Monthly Wage: ₱___________________

Salary for current period: ₱________
Unpaid prior salary: ₱________
Wage differentials: ₱________
Proportionate 13th month pay: ₱________
Unused leave benefits: ₱________
Refund of deductions: ₱________
Other benefits: ₱________

Gross Final Pay: ₱________

Less lawful documented advances: ₱________

Net Final Pay: ₱________

Prepared by: __________________ Received by: __________________ Date: __________________

LII. Practical Legal Strategy

For employers, the best strategy is prevention. Do not allow any agency, recruiter, or referrer to charge the worker. Put the wage and benefits in writing. Pay directly. Keep records. Upon termination, compute final pay promptly.

For domestic workers, the best strategy is documentation. Keep records of wages, deductions, conversations, and agency charges. Do not surrender documents. Ask for a written computation at the end of employment.

For agencies and referrers, the safest rule is to charge only lawful fees to the employer, issue receipts, avoid collecting from workers, and comply with licensing and labor regulations.

LIII. Conclusion

Referral fees and end-of-service pay for domestic workers in the Philippines must be understood through the protective framework of the Batas Kasambahay. A domestic worker should not be made to pay for access to employment through referral fees, placement charges, or salary deductions. Recruitment costs should not become a debt that traps the worker in service.

When employment ends, the worker must receive all earned wages and benefits, including unpaid salary, proportionate 13th month pay, applicable leave benefits, refunds of unauthorized deductions, and other amounts due under law or contract. The employer must also respect the worker’s freedom, return personal documents and belongings, and avoid coercive quitclaims.

The safest and fairest approach is simple: no illegal referral fees, no hidden deductions, clear written terms, proper social benefit compliance, accurate final pay computation, and humane treatment from hiring to separation.