UNDERPAID SALARY AFTER RESIGNATION: YOUR COMPLETE LEGAL GUIDE (PHILIPPINES, 2025)

This article is written for educational purposes. Labor rules evolve—always confirm the latest issuances or consult a Philippine labor-law practitioner for advice on your specific case.

1. Why “underpaid salary after resignation” matters

When an employee voluntarily resigns, the law treats any earned—but unpaid—wages as money claims. Because those claims carry a three-year prescriptive period (Art. 306 [291 old] Labor Code), a worker who waits too long may forfeit the right to sue. Understanding the rules, deadlines, and remedies is therefore critical.

2. Core legal framework

Source	Key points relevant to underpaid salary
Labor Code of the Philippines (Pres. Decree 442, as renumbered)	• Art. 99–102: payment of wages, illegal deductions • Art. 116: withholding of wages prohibited • Art. 113–115: permissible deductions & requisites • Art. 306: 3-year prescriptive period for money claims
Omnibus Rules Implementing the Labor Code	Detailed manner and timing of wage payment; penalties for delay
Presidential Decree 851 (13th-Month Pay Law)	Resigning workers are entitled to pro-rated 13th-month pay based on actual days worked in the calendar year
Labor Advisory No. 06-20 (DOLE, 17 Jan 2020) “Release of Final Pay”	Final pay (a.k.a. back wages, 13th-month differential, unused leave pay, etc.) must be released within 30 calendar days from date of separation, unless a shorter CBA/company policy applies
Lab. Dept. Order/Policy on SEnA (Single-Entry Approach first adopted in 2010; latest rules in Dept. Order # 238-22)	Requires would-be complainants to undergo SEnA conciliation-mediation before filing a case with the NLRC or appropriate office
Nacar v. Gallery Frames, G.R. No. 189871 (13 Aug 2013)	6 % legal interest per annum is imposed on unpaid wages from the date they fell due until full satisfaction
Jurisprudence on resignation pay disputes (e.g., Del Monte Phil. v. Saldivar, AutoBus v. Bautista, Quitoras v. Power-C-Ad)	Clarify when separation pay or damages become payable and when bad-faith penalties attach

3. What makes up “final pay”?

Component	Statutory basis	Typical issues leading to underpayment
Unpaid basic salary up to last actual workday	Art. 102–103	Late release; illegal deductions (e.g., training bond, equipment loss without due process)
Pro-rated 13th-month pay	PD 851 + DOLE Guidelines	Pro-rating errors; exclusion of OT/holiday pay from “basic salary”
Service Incentive Leave (SIL) conversion (minimum 5 days/yr)	Art. 95 Labor Code	Non-conversion, wrong SIL accrual, or forfeiture contrary to policy
Other convertible leaves (vacation, sick, etc.)	Company policy/CBA	Employer ignores CBA or claims leave lapses on resignation
Incentives & bonuses already “earned and demandable”	Civil Code Art. 1186; company policy	Employer treats bonuses as discretionary even if consistently granted
Tax refund (if withholding exceeds annual tax due)	NIRC, BIR RR 2-98	Failure to compute and refund, or to provide BIR Form 2316
Separation pay (only if provided by law, CBA, or company policy)**	Arts. 298-299 (formerly 283-284)	Employee assumes resignation gives right, but law grants it only for authorized causes, or if expressly promised

Tip: Collect payslips, time-cards, CBA extracts, company handbook, and BIR 2316. These documents will anchor your computation and later serve as evidence.

4. Counting the 30-day “final pay” clock

Start date: Date of effectivity of resignation (often last day of work).
Within 30 calendar days: Employer must release all due amounts unless a shorter period exists in your CBA or company rule.
Permissible delays: Only if there is a valid, documented offset—e.g., employee’s unliquidated cash advance proven through vouchers. Even then, only the net balance may be withheld.
Interest: If the employer overshoots 30 days without valid cause, legal interest at 6 % now typically applies (Nacar doctrine).

5. Step-by-step remedies if salary remains underpaid

A. Internal follow-up

Send a written demand to HR/payroll enumerating the precise amounts and legal basis.
Request a meeting; keep copies and get received stamps or email read receipts.

B. DOLE Single Entry Approach (SEnA)

Where filed: Any DOLE Regional/Field Office where you worked or reside.
Cost: Free; no lawyer required.
Timeline: 30-calendar-day conciliation-mediation period (extendable once by 15 days).
Outcome: Settlement agreement (compromise) or referral to the proper forum.

C. National Labor Relations Commission (NLRC) complaint

Jurisdiction: Labor Arbiters handle money claims regardless of amount when accompanied by a reinstatement prayer, or exceeding ₱5,000 even without reinstatement. Smaller pure money claims may still pass through DOLE Regional Directors.
Prescriptive period: 3 years from each payday missed; clock pauses once you file SEnA (interruption of prescription).
Filing fees: Minimal (₱500 institutional fee + % of claim exceeding ₱100,000). Indigents may litigate in forma pauperis.
Procedure: Mandatory conciliation conference → position papers → hearings (if needed) → decision.

D. Execution & appeal

If you win, the employer must pay or post a bond to appeal. Garnishment, bank freezes, or sheriff levies are available for enforcement.
Appeals go to the NLRC Commission; thereafter to the Court of Appeals via Rule 65, and ultimately to the Supreme Court.

6. Monetary reliefs you can recover

Relief	When awarded	How computed
Back wages / unpaid salary	Always, if proven	Net of lawful deductions
Legal interest (6 % p.a.)	Delay in payment	From date each wage fell due
Nominal damages (₱10k–₱50k typical)	Employer violates due-process twin-notice rule on deductions	Discretionary; Jaka doctrine
Moral & exemplary damages	Employer acted in bad faith, fraud, or oppression	Requires clear proof; amounts vary
Attorney’s fees (10 % common)	When employee compelled to litigate or shows bad faith	Set as a percentage of award

7. Common employer defenses—and counter-arguments

Employer Defense	Typical Weakness
“We’re waiting for management approval/cash flow.”	Labor Advisory 06-20 imposes a mandatory release period; cash-flow problems aren’t recognized grounds for delay.
“Employee resigned without 30-day notice, so we’re offsetting one month’s salary.”	Deduction only allowed if (a) contractual penalty exists, and (b) employee gives written authorization or Labor Arbiter approves.
“Final pay is on hold due to pending clearance/liquidation.”	Clearance systems are allowed, but only lawful and documented liabilities may be charged; the balance must still be released within 30 days.
“Training bond” or “equipment loss” deduction	Must satisfy Art. 113 conditions: (1) in writing; (2) freely given; (3) for a valid purpose; (4) employer not in charge of safekeeping. Absent any, deduction is invalid.

8. Key practical tips for employees

Resignation letter: State your intended last day and request your “final pay and Certificate of Employment within 30 days pursuant to Labor Advisory 06-20.”
Compute in advance: Use spreadsheet templates to compare your figures with HR’s.
Document everything: Keep screenshots of every payroll query, follow-up message, and HR response.
Group action: If several ex-employees face the same issue, you can file one NLRC complaint and split the filing fees.
Mind the clock: Diary the 30-day release deadline and 3-year prescription; missing either can doom a case.

9. Obligations & liabilities of the employer

Obligation	Statutory/Policy Basis	Penalty for non-compliance
Release final pay within 30 days	Labor Advisory 06-20	6 % interest; damages; possible wage order fine (₱40k–₱200k) & closure for repeat offenders
Issue Certificate of Employment (COE) within 3 days	Labor Advisory 06-20	₱1k–₱10k administrative fine per affected worker
Keep payroll records for 3 years	Art. 116 & DO 183-17	Fines, possible criminal liability
Anti-retaliation (no blacklisting)	Art. 118	Criminal prosecution & administrative fines

10. Frequently-asked questions (FAQ)

Question	Short Answer
Do I get separation pay if I resigned?	Generally no, unless (a) resignation is due to constructive dismissal or (b) your CBA/company policy promises it.
Can the company deduct the cost of my lost company phone from my last salary?	Only after due process and if loss is through your fault and you gave written consent to the deduction.
Is SIL automatically converted to cash at resignation?	Yes—unused service incentive leave must be paid. Company leave credits beyond the 5-day SIL depend on policy.
I resigned abroad under a Philippine POEA contract; where do I sue?	File at the POEA/DOLE Regional Arbitration Branch or through the nearest Philippine Overseas Labor Office (POLO), then NLRC.
Can I waive my claim in a quitclaim?	Quitclaims are valid only if executed voluntarily, for a reasonable consideration, and without vitiation. Courts often set them aside if the consideration is unconscionably low.

11. Checklist before filing a case

Copy of resignation letter & HR acknowledgement
Final pay breakdown (company version vs. your computation)
Payslips/time records covering the disputed period
Company policies/CBA provisions on pay & deductions
Proof of follow-ups/demand letter
Computation sheet with 6 % interest
Identification documents & sworn statement (for SEnA/NLRC filing)

12. Conclusion

Underpaid wages after resignation are actionable and time-bound. The law gives you a clear 30-day release rule, a straightforward conciliation path (SEnA), and a robust adjudicatory forum (NLRC). Armed with accurate computations, timely action, and solid documentation, you can compel your former employer to pay every peso you have rightfully earned—and even recover interest, damages, and fees if they refuse.

Need a personalized calculation or a demand-letter draft? Let me know—I’m happy to help you take the next step.