1) The “rendering period” in Philippine labor practice

In the Philippines, an employee who resigns is generally expected to give the employer written notice at least 30 days in advance (commonly called the 30-day rendering period). This comes from the Labor Code provision on termination by the employee (historically cited as Article 285, now renumbered in the Labor Code).

Key point: During the rendering period, the employee is still employed. The employment relationship continues until the effective date of resignation (or until the employer accepts an earlier separation date).

That matters because wage rules—regular paydays, wage protection, and limits on deductions—continue to apply while the employee is rendering.

2) Can an employer withhold salary during the rendering period?

General rule: No.

An employer cannot withhold an employee’s wages for work already performed during the rendering period simply because:

the employee has resigned,
the employee has not yet completed clearance,
the employee still has accountabilities (laptop, ID, cash advances),
the employer is “holding pay” as leverage to force compliance, or
the employer is displeased with the resignation.

Philippine wage protection rules treat wages as something that must be paid on time and in full, subject only to lawful deductions. Withholding pay as pressure or punishment is typically considered an unlawful labor practice on wages (i.e., prohibited withholding/deductions), and it can expose the employer to administrative and monetary liability.

What the employer must do instead

Pay wages on the regular payday for days/hours actually worked while rendering.
Use only lawful deductions (discussed below).
If there’s a real dispute (e.g., alleged shortage, damages), pursue it through proper procedures rather than unilateral withholding.

3) Lawful vs. unlawful deductions: what can be taken from wages?

A) Deductions that are commonly lawful

Under the Labor Code’s wage protection provisions, deductions are typically allowed when they are:

Required by law (e.g., withholding tax; SSS, PhilHealth, Pag-IBIG contributions where applicable);
Authorized in writing by the employee for a lawful purpose (e.g., union dues with proper authorization, certain insurance/premium arrangements); or
Allowed by regulation or recognized practice under specific conditions (often with limits and documentation).

Practical takeaway: If the employer wants to deduct something like a loan/cash advance, the safest basis is clear documentation and written authorization, and the deduction should be reasonable (not a surprise, not arbitrary, and not confiscatory).

B) Deductions that are commonly unlawful (or high-risk)

Deductions or withholding become problematic when they are:

Unilateral penalties (e.g., “resignation fee,” “training bond” withheld from wages without a valid enforceable agreement and due process),
Unproven damage/shortage (e.g., employer claims a loss but provides no investigation, no accounting, no employee opportunity to explain),
Used as leverage (“No clearance, no salary” applied to salary already earned while still employed),
Vague/blanket authorizations (e.g., broad waivers allowing any deduction without itemization and accountability).

Even when an employer believes money is owed, self-help deductions without proper basis can backfire.

4) Clearance and accountabilities: can “no clearance, no pay” be imposed?

During rendering: “No clearance, no pay” is generally improper

Because the employee remains employed while rendering, the employer should not stop payroll just because clearance is incomplete. Clearance is typically an exit requirement, not a condition to receive wages for work already done.

For final pay: clearance can be part of the process—but it should not be abused

Many employers implement clearance procedures to ensure return of property and to compute final pay accurately. This is not inherently illegal. The legal risk arises when clearance becomes a pretext for indefinite delay or blanket withholding.

Best practice under Philippine labor standards is:

clearance should be specific (itemized accountabilities),
processed promptly, and
not used to defeat the rule that final pay should be released within the required period (see Section 6).

5) If the employee does not complete the 30-day notice, can the employer withhold wages?

The 30-day notice rule is not a license to confiscate wages

If an employee resigns without the required notice (or fails to complete the rendering period), the employer may have remedies—depending on circumstances—such as:

documenting the failure to render,
enforcing a valid contractual obligation (if any) consistent with law and public policy, or
pursuing a claim for actual damages if legally supportable and properly proven.

But employers generally still must pay wages for:

all days actually worked, and
earned benefits due.

Important distinction: A possible claim for damages is different from unilaterally withholding earned wages. In many disputes, employers lose when they skip due process and simply hold pay.

6) Final pay (“last pay”): the 30-day release rule and what it includes

The baseline rule: final pay is due within 30 days

The Department of Labor and Employment (DOLE) issued guidance widely cited in practice: Labor Advisory No. 06, Series of 2020, which provides that final pay should be released within thirty (30) days from the date of separation or termination of employment, unless a more favorable company policy, contract, or collective bargaining agreement provides otherwise.

This 30-day period is often treated as the standard compliance benchmark in employee money claims.

What final pay usually includes

Final pay is not just “last salary.” Depending on the employee’s situation and employer policies, it can include:

Unpaid salary/wages up to the last day of work
- Includes unpaid regular days, approved overtime, night differential, holiday pay, etc., if earned.
Proportionate 13th month pay
- Computed from January 1 up to the separation date (or the employer’s 13th month computation period), less any amounts already paid.
Cash conversion of unused Service Incentive Leave (SIL) (if applicable)
- Typically applies if the employee has unused leave credits convertible to cash under law/company policy.
- Note: Some leave benefits are company-granted and governed by policy; SIL is the statutory minimum (commonly 5 days) for eligible employees.
Tax refund or tax adjustments (if any)
- Depending on annualization, the employee may have an over-withheld tax that becomes refundable through payroll finalization.
Other company benefits due under policy or contract
- Examples: prorated allowances if contractually promised, commissions already earned under the commission scheme, reimbursements properly liquidated, etc.
Separation pay / retirement pay (only if applicable)
- Separation pay is typically tied to authorized causes (redundancy, retrenchment, closure not due to serious losses, etc.), not standard resignation.
- Retirement pay depends on the employee meeting retirement eligibility under law/company retirement plan.

What final pay does not automatically include

A penalty for resignation (not presumed lawful).
Unproven charges (e.g., “damage fees” without established basis).
Amounts withheld indefinitely for clearance.

7) Pay timing while rendering vs. final pay timing after separation

It helps to separate two timelines:

A) Pay during rendering period (still employed)

Paid on the regular payroll cycle.
Employer must follow ordinary wage rules on frequency and timeliness.
Employer cannot “freeze” salary pending clearance because clearance is an exit process.

B) Final pay after last day (separated)

Consolidated settlement of remaining amounts due.
DOLE’s practical benchmark: release within 30 days from separation (subject to more favorable rules).
Employer may complete clearance steps, but not to justify unreasonable or indefinite delay.

8) Common scenarios and how the rules apply

Scenario 1: Employer says “We’ll hold your last two paychecks until you return your laptop.”

During rendering: wages for work done should still be paid on payday.
After separation: the employer may demand return of property and may pursue appropriate remedies if unreturned, but withholding pay beyond lawful deductions is risky—especially without documentation and due process.

Scenario 2: Employer says “No clearance, no final pay.”

Clearance can be required, but final pay should still be released within the required period and the process must be reasonable. Blanket refusal can support a money claim.

Scenario 3: Employee has a cash advance/loan.

Employer can deduct if there is a clear agreement and authorization, and accounting is transparent.
If disputed, the employer should not simply withhold everything; it should compute final pay and offset only what is legitimately due and properly supported.

Scenario 4: Employer alleges a shortage or alleged damages.

Employer should show proof, conduct a fair process, and avoid unilateral deductions that look like punishment. Disputes are better handled through formal channels rather than withholding wages.

Scenario 5: Employee resigns immediately without notice.

Employer still pays wages earned.
Employer may explore legal remedies for actual provable losses (if any), but that is not the same as withholding earned wages as a “fine.”

9) Remedies if wages or final pay are withheld

When an employee experiences withholding of salary during rendering or delayed/nonpayment of final pay, typical steps in the Philippine context include:

Written demand / follow-up
- Request a written breakdown of final pay computation and deductions.
DOLE-SEnA (Single Entry Approach)
- A mandatory conciliation-mediation mechanism in many labor disputes before escalation.
Filing a money claim
- Depending on the nature/amount and employment circumstances, claims may go through DOLE or the NLRC framework.

Documentation that matters: resignation notice, employment contract/policies, payslips, time records, clearance forms, inventory/accountability records, loan ledgers, and written authorizations for deductions.

10) Practical compliance checklist (Philippine HR/legal operations view)

For employers

Keep paying the employee on normal payroll dates during rendering.
Prepare final pay computation early (especially 13th month proration and leave conversion).
Keep deductions itemized and supported by law/authorization.
Run clearance fast, specific, and documented; avoid using it as leverage.
Release final pay within the DOLE benchmark period, subject to any more favorable rule.

For employees

Provide resignation notice in writing and keep proof of receipt.
Continue documenting attendance/work output during rendering.
Return company property with receiving copies.
Ask for a written final pay computation and the release date.

11) Bottom line principles

Rendering period = still employed. Wages for work performed must be paid on time.
Withholding wages as leverage is generally unlawful. Employers should rely on lawful deductions and proper processes.
Final pay has a standard release expectation. DOLE guidance commonly applies a 30-day release benchmark from separation, subject to more favorable company/CBA/contract rules.
Disputes don’t justify blanket withholding. Claims for damages/shortages should be proven and handled through appropriate procedures, not by freezing pay.