A comprehensive, practice-oriented explainer on when final pay must be released and when a Certificate of Employment (COE) must be issued in the Philippines. This is general information, not legal advice.

1) Core rules at a glance

Final pay timing: As a general rule, release within 30 calendar days from the employee’s date of separation, unless a shorter period is set by company policy, collective bargaining agreement (CBA), or employment contract.
COE timing: Issue a Certificate of Employment within 3 calendar days from an employee’s request (or separation, if the company’s policy automatically issues it then).
No undue delay: Clearance, retrieval of company property, or internal audits must not be used to unjustifiably delay either final pay or a COE.
Channels for redress: Non-release or late release can be brought to DOLE (SEnA) for conciliation-mediation and, if unresolved, to the NLRC/Labor Arbiters as money claims; privacy-content disputes in a COE can be raised to DOLE and, when personal data issues arise, to the NPC.

2) What counts as “final pay”?

Final pay (often called back pay) is the sum of all amounts due to the employee on separation, regardless of the reason for separation, subject to lawful deductions. Typical inclusions:

Unpaid wages up to last day worked (including differentials and wage retro).
Pro-rated 13th-month pay (PD 851) based on basic salary actually earned in the calendar year up to the separation date.
Cash conversion of unused Service Incentive Leave (SIL) (minimum 5 days/year under the Labor Code), if unused and commutable under law/policy; plus unused company leaves if the policy provides commutation.
Separation pay, only if legally due, i.e., for authorized causes (redundancy, retrenchment, closure not due to serious losses, installation of labor-saving devices) and disease meeting statutory criteria.
Overtime, night-shift differential, holiday and premium pay, if any, not yet paid.
Allowances that are wage-integrated or expressly commutable under policy/contract.
Tax refund due to over-withholding (computed after year-to-date reconciliation); conversely, tax dues may be deducted if there is under-withholding.
Other lawful benefits: commissions already earned, de minimis allowances due, and any CBA-mandated payouts.

Lawful deductions may include:

Government-mandated contributions or taxes;
Accountabilities duly acknowledged (e.g., unreturned tools/approved salary loans), provided they are liquidated, supported, and do not reduce wages below what is legally due;
Training bonds/liquidated damages that are valid (i.e., reasonable, cost-based, not punitive), subject to proof of actual costs and the terms of the bond.

3) Separation pay: quick matrix (authorized causes)

Cause of Separation	Statutory minimum separation pay
Redundancy	At least 1 month pay per year of service, or 1 month pay, whichever is higher
Installation of labor-saving devices	At least 1 month pay per year of service, or 1 month pay, whichever is higher
Retrenchment to prevent losses	At least 1/2 month pay per year of service, or 1 month pay, whichever is higher
Closure/cessation not due to serious losses	At least 1/2 month pay per year of service, or 1 month pay, whichever is higher
Termination due to disease (medically certified, cannot be cured within 6 months, and continued employment is prohibited by competent public health authority)	At least 1/2 month pay per year of service, or 1 month pay, whichever is higher

“Per year of service” typically prorates fractions of a year (commonly 6 months = 1 year by long-standing practice), unless policy/CBA grants a better formula. Just-cause dismissals (e.g., serious misconduct) generally do not entitle the employee to statutory separation pay, unless granted by policy, CBA, or equity.

4) Certificate of Employment (COE): scope, content, limits

Purpose and right: An employee who is or has been employed is entitled to a COE. Employers must issue it within 3 calendar days from request.

Standard content:

Full name of employee;
Position(s) held;
Inclusive dates of employment;
Optionally, rate of pay / compensation history if the employee expressly requests it or if company policy routinely includes it.

What a COE is not:

Not a clearance certificate (no listing of accountabilities).
Not an appraisal, disciplinary record, or a character reference (avoid subjective statements).
Not a platform to disclose sensitive personal data beyond what is necessary (observe the Data Privacy Act).

Fees: Best practice is no charge for a standard COE copy requested within a reasonable period from separation. If an employer charges for additional certified copies or historical re-prints, the fee should be nominal and justified by policy.

5) Computation notes (practical)

13th-month pay = (Total basic salary actually earned in the calendar year up to separation) ÷ 12. Exclude non-basic allowances not integrated into wages; include regular COLA if wage-integrated by wage order/policy.
SIL conversion: Daily rate × unused SIL days (minimum 5-day SIL regime; companies with higher leave credits follow policy/CBA).
Separation pay daily rate: Use the latest regular salary rate, and if policy/CBA says “one month pay,” clarify whether it’s basic only or basic + fixed wage-integrated allowances.
Pro-rations: For per-year computations, a fraction of at least six months is typically counted as one whole year unless a more favorable policy applies.

6) Clearance and release mechanics

Clearance is permissible (return of IDs, tools, laptops, liquidation of cash advances), but cannot be wielded to indefinitely stall final pay.
Partial release is advisable where only a small item remains under verification (e.g., pending expense liquidations)—release the undisputed amounts first.
Quitclaims are not required to release what is already due and demandable. A quitclaim is valid only if executed voluntarily, with full understanding, and for a reasonable consideration—and may be voided if obtained through fraud, coercion, or for unconscionably low amounts.

7) Special scenarios

Resignation (with or without 30-day notice for just causes): same 30-day final pay benchmark; pro-rated 13th-month pay and SIL conversion still apply; no statutory separation pay for voluntary resignation unless policy/CBA grants it.
End of fixed-term or project: treat like authorized cessation without statutory separation pay unless policy/contract/CBA provides otherwise; all earned wages, pro-rated benefits, and SIL conversion remain due.
Probationary employees: entitled to final pay and COE on the same timelines; separation pay rules depend on cause of termination.
Death of employee: pay heirs/estate; process requires identification of rightful payees (e.g., extrajudicial settlement or SPA); follow the same timing to the extent practicable, considering documentation.
Company closure: employees due separation pay (except in proven serious losses); final pay should still follow the 30-day benchmark from separation date.
Payroll cutoffs/third-party processors: internal cycles do not excuse missing the legal timeframe; employers should arrange off-cycle payments.

8) Data privacy and employment records

COE issuance should follow data minimization: include only what’s necessary (dates, role, status).
Requests for pay history or reason for separation require employee consent (or a lawful basis).
Provide government forms upon separation (e.g., BIR Form 2316, PhilHealth/SSS/Pag-IBIG documentation) in line with statutory calendars; these are separate from the COE but should not be unreasonably withheld.

9) Remedies for delay or non-release

SEnA (Single Entry Approach) at the DOLE Regional/Field Office: a 30-day conciliation-mediation track to compel prompt release.
NLRC/Labor Arbiter: money claims (unpaid wages, benefits, separation pay), legal interest, damages when warranted.
Wage law sanctions: repeated or willful non-payment can invite administrative action and, in egregious cases, criminal liability under wage statutes.
Data Privacy complaints: if a COE unlawfully discloses personal or sensitive information.

10) Employer compliance checklist

☐ Written policy confirms final pay within ≤30 days and COE within 3 days of request.
☐ Payroll has an off-cycle release mechanism.
☐ Standard COE template (dates, position, tenure; optional pay details upon request).
☐ Clearance flow with specific timelines; no open-ended holds.
☐ Separation pay matrix applied consistently; proration rules documented.
☐ Quitclaim policy (if used): voluntary, explained, and paid against a reasonable consideration—never a precondition to release the undisputed dues.
☐ Documentation pack: payslip/final computation, 13th-month proration, SIL conversion, tax adjustments, separation pay basis.

11) Employee action checklist

☐ Submit a written request for COE (keep proof); follow up after 3 days if not received.
☐ Ask HR for a final pay computation breakdown; verify 13th-month proration, SIL conversion, separation pay basis (if applicable), and tax adjustments.
☐ Return company property and complete clearance promptly; request partial release of undisputed amounts if an item is under review.
☐ If delayed beyond 30 days (without valid reason), file at DOLE SEnA with your employment papers, payslips, and emails.
☐ Review any quitclaim carefully; do not sign under pressure, and note that undisputed dues should be released even without it.

12) Frequently asked clarifications

Q: Can a company condition COE issuance on clearance or quitclaim? A: No. A COE is a right and should be issued within 3 days from request; do not hinge it on signing a quitclaim or finishing lengthy audits.

Q: Can “ongoing investigation” justify holding final pay beyond 30 days? A: Investigations do not justify indefinite withholding. Employers should release undisputed amounts and only hold what is specific, liquidated, and supported by documented accountabilities.

Q: Are allowances part of 13th-month pay? A: Only if they are considered part of basic salary (wage-integrated). Purely discretionary/non-wage allowances are excluded.

Q: How is a fraction of service counted for separation pay? A: The long-standing approach treats at least 6 months as one full year, unless a more favorable CBA/policy applies.

13) Model COE (neutral language)

Certificate of Employment This is to certify that [Employee Name] was employed by [Company] as [Position] from [Start Date] to [End Date]. This certification is issued upon the employee’s request for whatever legal purpose it may serve. Issued this [Date] at [City], Philippines. [Authorized Signatory] | [Title] | [Company]

14) Bottom line

Final pay: release within 30 days from separation (or earlier if policy/CBA says so).
COE: issue within 3 days from request.
Employers should release undisputed amounts without delay; employees should document requests and use SEnA/NLRC if deadlines are missed.