1) The core idea: wages earned must be paid on time—even while resigning

In Philippine labor law, the moment work is performed, the corresponding wage is earned. Resignation does not suspend payroll obligations. During the 30-day notice period (often called “rendering”), an employee remains employed and must generally be paid on the normal paydays for days actually worked, including any statutory wage components that apply.

Withholding salary during rendering is usually unlawful unless it falls under very narrow legal exceptions (lawful deductions, authorized offsets, or amounts not yet due).

2) The legal framework that governs wage payment and withholding

A. 30-day resignation notice (rendering period)

The Labor Code recognizes resignation as a voluntary act by the employee. As a general rule, an employee who resigns should give the employer at least one (1) month prior notice, unless resignation is for causes that allow immediate separation (e.g., serious insult, inhuman treatment, commission of a crime against the employee, analogous causes). The 30-day period is meant to give the employer time to transition operations, not to give leverage to stop paying wages.

Key points

Resignation is unilateral; it does not require employer “approval” to be effective.
The employer may choose to waive the notice period or shorten it, but that does not erase pay for days already worked.

B. Wage protection rules (timely payment; limits on deductions)

The Labor Code’s wage provisions (commonly cited around Articles on wage payment and deductions) establish that:

Wages must be paid regularly and promptly at least at intervals set by law (typically at least twice a month for most employees).
Employers generally cannot make deductions or withhold wages except where expressly allowed.

C. Prohibition on withholding wages and “kickbacks”

The Code also prohibits withholding wages due to the employee, as well as unlawful deductions and arrangements that effectively return wages to the employer. In practice, this is the foundation for treating salary-withholding tactics as illegal when used to force clearance, return of property, or repayment, absent a lawful basis.

3) During the 30-day rendering: what can and cannot be withheld

What employers generally cannot do

1) Hold back current payroll during the notice period If an employee reports for work and performs duties, the employer must pay the wage due on the scheduled payday. “You’re resigning, so we’ll hold your pay until clearance” is typically not a lawful reason to stop regular payroll.

2) Withhold wages as a penalty for resignation or for “inconvenience” Employers may feel operational impact, but the remedy is not to withhold wages already earned. If an employee fails to render the required notice without valid reason and causes provable damage, the employer’s remedy is to pursue damages through the proper forum—not to unilaterally seize wages outside what the law allows.

3) Force a “no pay” rendering period The notice period is still an employment period. If the employee is required or allowed to work, it is paid work.

What employers may do (limited and fact-specific)

1) Pay only what is actually earned If the employee is absent without leave or does not work certain days, the employer is not obligated to pay for those unworked days (subject to leave credits, company policy, or other entitlements).

2) Apply lawful deductions (strictly limited) Lawful deductions are typically limited to:

Deductions required by law (e.g., SSS/PhilHealth/Pag-IBIG contributions, withholding tax).
Deductions authorized by regulations (e.g., certain facilities, if legally compliant).
Deductions with written authorization from the employee for a specific purpose, within legal bounds.

Important: Even where deductions are allowed, they must be properly supported, not excessive, and not used to defeat minimum wage or other labor standards.

4) “Clearance” and company property: can salary be withheld until cleared?

A. Clearance is not a legal condition to paying wages during rendering

A “clearance” process is mainly an internal control mechanism. It can justify administrative timing for final accounting (e.g., ensuring returned equipment), but it is not a blanket license to stop paying earned wages on regular paydays during the notice period.

B. For the final pay after separation, delays must still be reasonable

Employers often argue they must verify accountabilities before releasing the final pay. Verification can be legitimate, but:

The employer must act in good faith and with reasonable speed.
Indefinite withholding, or withholding used as leverage, is risky and often treated as unlawful.

A widely recognized labor standard in practice is that final pay should be released within a reasonable period after separation (commonly referenced in labor guidance as around 30 days), barring legitimate, documented reasons for a short delay (e.g., awaiting completion of final timekeeping cutoffs, computing prorations, verifying specific accountabilities). “No clearance, no pay—forever” is not defensible.

5) Final pay vs. salary during rendering: don’t mix them up

Salary during rendering (still employed)

Includes:

Basic wage for days worked
Overtime pay, night shift differential, holiday pay, rest day premium (if applicable)
Other wage-related statutory pay items that fall due during that payroll period

This must generally be paid on time under normal payroll cycles.

Final pay (after separation)

Often includes:

Unpaid salary up to last day worked (if not yet paid)
Pro-rated 13th month pay (under 13th month pay rules)
Cash conversion of unused service incentive leave or company-granted convertible leave (depending on policy/contract and legal rules)
Other amounts due under contract/CBA/company policy (e.g., commissions already earned per plan rules)
Less lawful deductions (taxes, statutory contributions, and properly authorized deductions)

Final pay is where employers usually try to “net out” accountabilities—but even here, the rules on deductions and offsets remain strict.

6) Offsets, debts, loans, and “accountabilities”: when can an employer deduct?

A. Employee loans and salary deductions

If there is a company loan or other debt, salary deductions must generally be supported by:

A clear written agreement (or payroll authorization)
A lawful deduction scheme that does not violate labor standards

B. Company property loss/damage

An employer cannot automatically deduct the alleged value of unreturned items or losses from wages just because it claims the employee is accountable. Typically, lawful deduction requires:

Due process in establishing accountability (and not merely accusation)
A basis in policy/contract and, ideally, the employee’s written authorization for deduction or a legally recognized mechanism to recover the amount

Where the amount is disputed, not yet liquidated, or not clearly due and demandable, unilateral withholding or offsetting against wages is legally precarious.

C. Training bonds / liquidated damages clauses

Some employers use training bonds or reimbursement clauses. Even if a clause exists, deducting from wages still faces the same constraints:

The amount must be properly due, enforceable, and not contrary to law or public policy.
Wages are protected; many disputes over bonds require adjudication rather than self-help withholding.

7) Common scenarios and how the law typically treats them

Scenario 1: “We will hold your last two cutoffs while you render.”

Generally not allowed if those cutoffs correspond to work already performed. Payroll must proceed normally.

Scenario 2: “No clearance, no pay.”

For current wages during rendering: generally unlawful as a condition.
For final pay: clearance may be part of internal processing, but withholding must be reasonable and cannot override wage protections.

Scenario 3: “You have a cash shortage/loss; we’ll deduct it from your salary.”

Deductions for loss/damage are highly sensitive and must comply with legal limits and due process. Unilateral deductions without proper basis are risky and frequently challenged.

Scenario 4: “You didn’t complete the 30 days, so we’re forfeiting your salary.”

Forfeiture of earned wages is generally impermissible. The employer may pursue damages if legally justified, but not by simply refusing to pay wages already earned.

Scenario 5: “We’re withholding because you might compete / you have a non-compete.”

Non-compete issues do not generally justify wage withholding. The remedy is enforcement through lawful means, not withholding earned salary.

8) Consequences for unlawful withholding (employer-side risks)

When wages are withheld without legal basis, exposure can include:

Orders to pay the withheld amounts as money claims
Potential administrative findings for labor standards violations
Additional liabilities depending on the manner and duration of withholding, and whether it implicates prohibited practices on wage deductions/withholding

9) Remedies for employees (practical enforcement path)

Philippine labor enforcement typically provides:

Single Entry Approach (SEnA) for mandatory conciliation-mediation before escalation
Filing of money claims through the proper labor forum (often involving DOLE mechanisms for labor standards enforcement or the NLRC labor arbiters, depending on issues like disputes, reinstatement claims, and the nature/amount of the claim)

Documentation is critical:

Payslips, time records, schedules, resignation notice and acknowledgment, emails on clearance/accountabilities, and computation of final pay components.

10) Compliance checklist (what “lawful handling” looks like)

For employers

Continue paying wages during rendering on normal paydays.
Provide a transparent final pay computation.
Limit deductions to those required by law or properly authorized and legally permissible.
If there are accountabilities, document them, quantify them fairly, and avoid indefinite withholding.
Process clearance quickly and release final pay within a reasonable period.

For employees

Give written resignation notice and keep proof of receipt.
Render the notice period unless valid grounds justify immediate resignation or the employer waives it.
Return company property with acknowledgment/receipts.
Request a written final pay computation and release schedule.