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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Forms of Payment – No employer shall pay the wages of an employee by means of, promissory notes, vouchers, coupons, tokens tickets, chits, or any object other than legal tender, even when expressly requested by the employee. (Article 102, Labor Code of the Philippines)
Time of Payment – Wages shall be paid at least once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. If on account of force majeure or circumstances beyond the employer’s control, payment of wages on or within the time herein provided cannot be made, the employer shall pay the wages immediately after such force majeure or circumstances have ceased. No employer shall make payment with less frequency than once a month. (Article 103, Labor Code of the Philippines)
Place of Payment – Payment of wages shall be made at or near the place of undertaking, except as otherwise provided by such regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure greater protection of wages. (Article 104, Labor Code of the Philippines)
WHAT ARE THE FORMS OF PAYMENT OF WAGES?
The forms of payment of wages are regulated by the Labor Code, which specifies that wages must be paid using legal tender.
Legal tender refers to the official currency recognized by a government as acceptable for the payment of debts and transactions within its jurisdiction.
Jurisprudence says:
Wages shall be paid only by means of legal tender. The only instance when an employer is permitted to pay wages informs other than legal tender, that is, by checks or money order, is when the circumstances prescribed in the second paragraph of Article 102 are present. (Dominico Congson vs. National Labor Relations Commission, G.R. No. 114250, April 5, 1995)
It is settled in jurisprudence that checks, being only negotiable instruments, are only substitutes for money and are not legal tender; more so when the check has a named payee and is not payable to bearer. (Federal Express Corporation vs. Luwalhati Antonino, G.R. No. 199455, June 27, 2018)
The Labor Code provides:
Article 102. Forms of Payment. —No. employer shall pay the wages of an employee by means of, promissory notes, vouchers, coupons, tokens tickets, chits, or any object other than legal tender, even when expressly requested by the employee.
Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of effectivity of this Code, or is necessary as specified in appropriate regulations to be issued by the Secretary of Labor or as stipulated in a collective bargaining agreement.
In simple terms, the law says that employers must pay their workers with regular money, like cash. They can’t use things like vouchers, or tokens instead. However, there are some situations where paying with a check or money order is okay. For example, if it’s common practice in the area where the law applies, or if there are special rules from the Secretary of Labor or an agreement between the employer and workers.
WHEN TO PAY WAGES?
The Labor Code provides:
Article 103. Time of Payment – Wages shall be paid at least once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. If on account of force majeure or circumstances beyond the employer’s control, payment of wages on or within the time herein provided cannot be made, the employer shall pay the wages immediately after such force majeure or circumstances have ceased. No employer shall make payment with less frequency than once a month.
The payment of wages of employees engaged to perform a task which cannot be completed in two (2) weeks shall be subject to the following conditions, in the absence of a collective bargaining agreement or arbitration award:
(1) That payments are made at intervals not exceeding sixteen (16) days, in proportion to the amount of work completed;
(2) That final settlement is made upon completion of the work.
The law says that employees must be paid their wages regularly and on time. For most workers, this means they should get paid at least once every two weeks or twice a month, with no more than 16 days between payments.
If there are reasons beyond the employer’s control that prevent them from paying on time, like a natural disaster, they need to pay as soon as they can after the problem is resolved.
Employers can’t pay less frequently than once a month.
For employees who are hired to do a job that takes longer than two weeks to complete, the rules are a bit different. In this case:
- They still need to be paid regularly, with intervals no longer than 16 days, based on how much work they’ve finished.
- The final payment should be made once the job is done.
- These rules apply unless there’s a special agreement between the employer and employees or a decision from an arbitrator.
WHERE TO PAY WAGES?
The Labor Code provides:
Article 104. Place of Payment – Payment of wages shall be made at or near the place of undertaking, except as otherwise provided by such regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure greater protection of wages.
Wages should be paid to workers either at their workplace or very close to it. However, there might be some special rules set by the Secretary of Labor and Employment that allow for different arrangements, as long as they still protect workers’ wages.
Read also: PAYMENT OF WAGES AND MONETARY BENEFITS THROUGH TRANSACTION ACCOUNTS
Payment of salary, and prohibitions regarding wages
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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