Executive summary

When an employee in the Philippines separates from employment—whether by resignation, termination, end of contract, redundancy, or retirement—the final pay (also called “last pay” or “back pay”) should generally be released within 30 calendar days from the date of separation. If it isn’t, workers have clear remedies: a demand letter, conciliation–mediation under DOLE’s SEnA (Single Entry Approach), and, if needed, a formal case with the DOLE Regional Office (for labor standards violations) or the NLRC Labor Arbiter (for termination and broader money claims). Most claims prescribe in three (3) years, while illegal dismissal actions prescribe in four (4) years.

What “final pay” includes

Final pay commonly covers the following (as applicable):

Unpaid wages up to the last day worked (including overtime, night shift differential, premium/holiday pay that has accrued).
Pro-rated 13th month pay (compulsory under PD 851), computed based on basic pay actually earned during the calendar year up to the last day of work.
Cash conversion of unused Service Incentive Leave (SIL)—at least 5 days per year after one year of service—if not used, per the Labor Code. (Company policies may grant more.)
Separation pay, when legally due (e.g., redundancy, retrenchment, installation of labor-saving devices, closure not due to serious losses; or as required by company policy/CBAs/contract). Typical statutory rates are one month pay or one-half month pay per year of service, depending on the authorized cause; fractions of at least six months are generally counted as one year.
Retirement pay, if the employee qualifies under the Retirement Pay Law or company plan.
Other accrued, contractually promised, or policy-based benefits, e.g., proportionate allowances, rice or meal allowances (if part of wage or benefit policy), accrued but unpaid differentials due to wage orders.
Deductions/offsets must be lawful and documented (e.g., tax due, SSS/PhilHealth/HDMF, signed debts/advances, unreturned company property per a clear policy). Employers may not impose arbitrary penalties or withhold all pay merely because “clearance” is pending; only valid, provable accountabilities may be offset.

30-day release rule. As a general policy, employers should release final pay and issue a Certificate of Employment within 30 days from separation, unless a CBA, company policy, or more favorable practice provides a shorter period.

What cannot justify delaying payment beyond 30 days

Open-ended “processing” without a definite, reasonable basis.
Clearance delays where the employee has no documented, quantifiable liability.
Broad set-offs for alleged losses without proof and due process.
Withholding COE as leverage. A Certificate of Employment must be issued upon request within a short period (commonly three days from request), independent of final pay disputes.

How to compute the common components

Unpaid basic wages Daily rate × actual days worked but unpaid (plus overtime, differentials, premiums that have accrued).
Pro-rated 13th month pay [ \text{13th month} = \frac{\text{Total basic pay actually earned in the year up to last day}}{12} ] Exclude allowances not part of “basic pay,” unless your company’s policy includes them.
SIL conversion Unused SIL days × current daily rate (use the applicable conversion basis at separation).
Separation pay (if due)
- Redundancy/closure not due to serious losses/installation of labor-saving devices: usually one (1) month pay per year of service (or as specified by law/jurisprudence for the cause).
- Retrenchment/closure due to serious losses: one-half (1/2) month pay per year of service (at minimum). Count ≥6 months as one year, unless a more favorable company/CBA rule applies.
Taxes
- Regular wage items (unpaid salary, 13th month over the non-taxable cap, etc.) are taxable under the NIRC.
- Separation pay due to causes beyond the employee’s control (e.g., redundancy, retrenchment) may be tax-exempt. Coordinate with payroll/BIR rules in force at the time of separation.

Prescriptive periods

Money claims arising from employer–employee relations (wages, 13th month, SIL conversion, differentials, etc.): 3 years from when the cause of action accrued (typically the due date or date of separation).
Illegal dismissal (reinstatement/backwages): generally 4 years from dismissal.
Filing interrupts prescription; conciliation requests are typically treated as interrupting/ tolling for the covered claims.

Step-by-step remedies if final pay is unpaid after 30 days

1) Send a written demand to the employer

Keep it factual, list all amounts due with computations, and set a reasonable payment deadline (e.g., 5–10 days).
Request your COE (if not yet obtained) and a breakdown of the computation.
Send via traceable means (email with acknowledgment, registered mail, or personal delivery with receiving copy).

Simple demand template

Subject: Demand for Release of Final Pay and COE To: [HR/Employer] I resigned/was separated effective [date]. Under labor standards and DOLE guidance, final pay should be released within 30 days of separation. As of today, the following remain unpaid: unpaid wages ₱; pro-rated 13th month ₱; SIL conversion ₱; separation pay ₱; others ₱. Kindly release the total ₱ and my Certificate of Employment within [X] days of this letter. If you dispute any item, please provide a written computation and the legal/policy basis for any deduction. Sincerely, [Name] / [Contact]

2) File a Request for Assistance (RFA) under DOLE’s SEnA

Go to the DOLE Regional/Field Office with jurisdiction over the workplace or file online (where available).
SEnA is a mandatory conciliation–mediation step that aims to settle within 30 days from filing.
Bring/attach: valid ID, proof of employment, separation notice or resignation letter, pay slips, time records, computation sheet, the demand letter, and any employer responses.

Outcomes at SEnA

Settlement: Employer pays; parties may sign a settlement agreement with finality and enforceability.
Non-settlement: You’ll receive a Referral/Endorsement to the proper forum.

3) Choose the proper forum if not settled

A. DOLE Regional Office (Labor Standards / Enforcement) Appropriate when claims involve non-compliance with labor standards (e.g., non-payment of wages, 13th month pay, SIL, wage order differentials). DOLE can:

Inspect the establishment, require payroll/timekeeping records, and issue Compliance Orders.
Assess underpayment and require payment of deficiencies; impose administrative sanctions.
Enforce even for multiple workers (not limited to ₱5,000) when arising from labor standards violations.

B. NLRC Labor Arbiter File a case when the dispute involves:

Termination issues (illegal dismissal, separation pay due to dismissal, backwages, damages).
Money claims intertwined with termination or not purely labor standards (e.g., claims based on contract/CBAs where factual/legal issues require adjudication). Process highlights: position papers, preliminary conference, possible mediation, decision; appeals to the NLRC Commission and courts follow statutory rules.

Tip: If you’re unsure which venue is correct, SEnA officers typically guide parties and issue the proper referral.

Evidence checklist to strengthen your claim

Government ID and contact details.
Employment proof: contract/appointment, IDs, company emails, SSS E-1/E-4 records, pay slips, payroll summaries.
Proof of separation: resignation letter with employer acknowledgment, termination/authorized cause notice, end-of-contract memo, retirement approval.
Computations: your itemized worksheet for unpaid wages, 13th month, SIL conversion, separation/retirement pay.
Communications: demand letter, HR replies, texts/emails, clearance forms, inventory turn-over receipts.
If alleging unlawful deductions: policy excerpts and proof of returned property.

Legal interest, damages, and penalties

Courts/tribunals commonly impose legal interest (currently 6% per annum) on monetary awards, generally computed from the time the amount became due or from demand (or as adjudged), until full satisfaction.
Moral/exemplary damages and attorney’s fees may be awarded in appropriate cases (e.g., bad faith, oppressive conduct), typically resolved by the NLRC/Labor Arbiter rather than DOLE inspectors.

Special situations

Resignation: Final pay still due within ~30 days. Employer may offset documented liabilities; cannot delay indefinitely for “clearance.”
Project/Fixed-term/End-of-Contract: Final pay and pro-rated 13th month (and SIL conversion if applicable) remain due; separation pay generally not due unless contract/law provides.
Probationary: Same entitlements to accrued wages, pro-rated 13th month, SIL conversion; separation pay only if termination is for authorized causes recognized by law.
Retrenchment/Redundancy/Closure: Separation pay at statutory or better rates; tax treatment may be favorable (often tax-exempt).
Death/Disability: Beneficiaries/heirs may claim unpaid wages and benefits; separation pay due to death may be tax-exempt.
Domestic workers (Kasambahay): Entitled to wage payment, pro-rated 13th month, and other benefits under the Domestic Workers Act; remedies also via DOLE/SEnA.

Practical timelines (illustrative)

Day 0: Separation effective.
By Day 30: Employer should release final pay and COE (or sooner if policy/CBA says so).
Day 31+: Send demand letter with a short deadline.
If unpaid: File SEnA RFA; expect conference(s) within days; 30-day window to settle.
If unresolved: File with DOLE RO (labor standards) or NLRC (termination/mixed claims).
Prescription: Keep 3-year (money claims) and 4-year (illegal dismissal) clocks in mind.

Frequently asked questions (quick answers)

Can an employer wait for “client payment” before releasing my last pay? No. Cash flow issues don’t excuse non-payment of accrued wages/benefits.

Can they withhold everything until I return my laptop/ID? They may offset the documented value of unreturned items per policy, but not indefinitely withhold all earnings where no quantified liability is shown.

Is 13th month pay still due if I resigned in March? Yes, pro-rated based on what you actually earned from January 1 to your last day.

What if I signed a quitclaim? Quitclaims are not automatically binding if executed under duress, deception, or without full payment of legal entitlements. Tribunals examine voluntariness and adequacy.

Do I need a lawyer for SEnA? Not required. Many employees pursue SEnA pro se. For complex or high-value cases, legal counsel helps.

Action plan you can copy

Prepare: IDs, proof of employment and separation, pay slips, computations.
Send a formal demand (keep proof of service).
File SEnA at the DOLE office with jurisdiction over your workplace (or through available online channels).
If unsettled, pursue either a DOLE labor standards complaint (for non-payment of statutory benefits) or an NLRC case (for termination-related and broader money claims).
Track prescriptive periods and consider legal interest in your prayer for relief.

This article provides general legal information on the Philippine 30-day final pay rule and DOLE remedies. For nuanced situations (e.g., complex separation programs, executive packages, CBAs), consider consulting counsel or a labor consultant for tailored advice and up-to-date tax treatment.