The employer is required to pay the employee’s wage in legal tender.[1]The employer is absolutely prohibited from paying the wage through promissory notes, vouchers, coupons, tokens, tickets, chits, or any object other than legal tender, even when expressly requested by the employee.[2] The prohibition does not apply to shares of stock of the corporation given as part of the employment offer as these are included in the employment contract’s consideration, and, thus, it is not part of the wage.

The employer may pay the employees their wages or other benefits through their commercial, savings or rural bank which should be located within a one kilometer radius. Further, the written permission of the majority of the employees or workers concerned have been ontained and the employer should observe the period of payment of wages.[3]Regardless of the method used, payment records should be kept as labor law places the burden on the employer to prove that the employee has been paid what is owing to him.

Best Legal Practices:

Keep records of payment of statutory monetary claims – The management should keep records of payment as proof in case of a labor complaint later on. As there has been no exception to this rule, the employer may end up paying twice the employee if no payment records will be shown as evidence, particularly if they have been razed by fire. Thus, employment records and other valuable documents (including contracts) should be uploaded to a virtual cloud storage or sent electronically to the office e-mail for record keeping purposes.

Wages are to be paid semi-monthly at intervals not more than 16 days apart.[4] The employer and the employee cannot agree to a change the payment to more than the prescribed period, such as a monthly payment. The reason being is that labor laws for the benefit of employees cannot be modified by agreement with the employer unless the changes will be more beneficial to the employee. Being paid on a monthly basis in contrast to a semi-monthly arrangement is clearly not more beneficial to the employee. 

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Industry Practices: In foreign-owned companies, such as BPOs, some pay their employees on a monthly basis as is the law or custom in their country of origin. However, Philippine labor clearly states that payment of wages should be made semi-monthly at intervals of not more than 16 days apart. Failure to follow such rule opens the employer to liabilities.

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In case of force majeure or circumstances beyond the employer’s control, he is required to pay the wage immediately after such force majeure or circumstances have ceased.[5] For work that cannot be completed in two weeks, and in the absence of a CBA or arbitration award, wage payments are to be made at intervals not exceeding 16 days, in proportion to the amount of work completed.[6]

Wages are to be paid at or near the place of undertaking except as otherwise provided by DOLE regulations designed to ensure greater protection of wages.[7] Payment other than the workplace is permissible only under the following circumstances:

  • When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions, or by reason of actual or impending emergencies caused by fire, flood epidemic or other calamity rendering payment thereat impossible;
  • When the employer provides free transportation to the employees back and forth; and
  • Under any other analogous circumstances; provided that the time spent by the employees in collecting their wages shall be considered as compensable hours worked.[8]

In line with the policy to ensure greater protection of wages, they are to be paid directly to the workers to whom they are due except in these situations:

  • In cases of force majeure rendering such payment impossible or under other special circumstances to be determined by the DOLE Secretary in appropriate regulations, in which case, the employee may be paid through another person under written authority given by the employee for the purpose; or
  • Where the employee has died, in which case, the employer may pay the wages of the deceased employee to the heirs of the latter without the necessity of intestate proceedings. The claimants, if they are all of age, are required to execute an affidavit attesting to their relationship to the deceased and the fact that they are his heirs, to the exclusion of all other persons. If any of the heirs is a minor, the affidavit is to be executed on his behalf by his natural guardian or next-of-kin. The affidavit is to be presented to the employer who will make payment through the DOLE Secretary or his representative. The said representative will act as referee in dividing the amount to be paid among the heirs. Payment herein will absolve the employer of any further liability with respect to the amount paid.[9]

The employer is solidarily liable with his contractor or subcontractor to the employees of the latter two who have not been paid their wages to the extent of the work performed under the contract and in the same manner and extent that he is liable to employees directly employed by him.[10]

Best Legal Practices:

Require contractor to submit a performance bond – Due to the probability of being held solidarily liable, the employer/principal may require the contractor or the latter’s subcontractor to obtain and submit a performance bond which will sufficiently cover the wages of the employees of the contractor/subcontractor. In case of liability, the principal may simply execute on the performance bond.

In the same manner, the rule in the preceding paragraph applies to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.[11] The principal is considered an indirect employer.[12]

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[3] R.A. 6727 (Wage Rationalization Act). Section 7. Payment by checks is allowed (Paragraph 2, Article 102, Labor Code).

[4] LABOR CODE. Paragraph 1, Article 103. The employer cannot make payments with less frequencies than once a month (Ibid.). A violation of this rule exposes the employer to liabilities, including administrative fines.

[5] Ibid.

[6] LABOR CODE. Paragraph 2, Article 103, cf. IMPLEMENTING RULES OF BOOK III, Section 3(b), Rule VIII.

[7] Ibid. Article 104.


[9] LABOR CODE. Article 105.

[10] Ibid. Paragraph 2, Article 106.

[11] Ibid. Article 107.

[12] Ibid.