Resigned from work? Here's when you should receive your final pay, COE

CEBU CITY, Philippines — Workers who resign or lose their jobs must receive their final pay within 30 days after completing company clearance requirements, while employers must issue a certificate of employment (COE) within three days from separation, the Department of Labor and Employment (Dole) reminded.

The labor department renewed the advisory amid recurring complaints from employees over the delayed release of final pay and employment documents. It stresses that employers must strictly comply with existing labor rules.

Under the guidelines, employers have 30 days to release an employee’s final pay from the date the worker clears all accountabilities with the company, unless a shorter period applies under the company’s policy, employment contract, or collective bargaining agreement.

The COE, meanwhile, must reach the employee within three days from the date of separation or termination. Employees who remain employed may also request a COE.

What counts as final pay?

Dole explained that final pay, also called last pay or back pay, covers the total amount of wages and monetary benefits owed to an employee upon the termination of employment, regardless of the reason for separation.

The amount may include

unpaid salaries and wages;

cash conversion of accrued but unused service incentive leave credits;

cash conversion of unused vacation, sick, or other leave credits, if granted under company policy, employment contract, or collective bargaining agreement;

prorated 13th-month pay;

separation pay, when applicable;

retirement benefits, when applicable;

tax refunds for excess withholding, if any; and

refundable cash bonds, deposits, or similar amounts due to the employee.

When does the 30-day period start?

Dole clarified that the 30-day period does not automatically begin on an employee’s last working day or resignation date.

Instead, it starts once the employee completes the company’s clearance process for separation.

The department cited a Supreme Court ruling recognizing clearance procedures as a standard practice among employers to ensure that separated employees return company property and settle all accountabilities before receiving their final pay.

READ: DOLE orders employers to release workers’ final pay, COE on time

Can workers still claim unpaid final pay later?

Yes.

Dole said employees may still recover unpaid final pay even after one year, provided they file their money claims within the three-year prescriptive period under the Labor Code.

Under the law, money claims arising from employer-employee relations must be filed within three years from the time the cause of action accrued. Claims filed beyond that period may no longer prosper.

READ: On Labor Day, Imee Marcos urges higher pay for Cebu workers

Two-month processing not allowed

The labor department also clarified that employers cannot automatically impose a two-month processing period for final pay.

“All money claims that form part of your final pay must be given to the affected employee 30 days after their separation from the company,” Dole said.

It added that employers must comply with the prescribed timeline unless a more favorable arrangement exists for workers.

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