Forms of Payment

Article 102

Art. 102. Forms of payment

General Rule Wages shall be paid in legal tender. 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 by check
Payment of wages by bank checks, postal checks or money orders is allowed where such manner of wage payment is (1) customary on the date of the effectivity of the Code (2) stipulated in a collective agreement, (3) where all of the following conditions are met:

Conditions
(a) There is a bank or other facility for encashment within a radius of one (1) kilometer from the workplace; (b) The employer or any of his agents or representatives does not receive any pecuniary benefit directly or indirectly from the arrangement; (c) The employees are given reasonable time during banking hours to withdraw their wages from the bank which time shall be considered as compensable hours worked if done during working hours; and (d) The payment by check is with the written consent of the employees concerned if there is no collective agreement authorizing the payment of wages by bank checks.

Art. 103. Time of payment

General Rule: (a) Wages shall be paid not less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days, Exception: unless payment cannot be made with such regularity due to force majeure or circumstances beyond the employer's control in which case the employer shall pay the wages immediately after such force majeure or circumstances have ceased.

In case of payment of wages by results involving work which cannot be finished in two (2) weeks, payment shall be made at intervals not exceeding sixteen days in proportion to the amount of work completed. Final settlement shall be made immediately upon completion of the work.

Art. 104 (Labor Code)

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.

Omnibus Rules Implementing the Labor Code (Book 3, Rule 8, Section 4)

SECTION 4. Place of payment. As a general rule, the place of payment shall be at or near the place of undertaking. Payment in a place other than the work place shall be permissible only under the following circumstances: (a) 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; (b) When the employer provides free transportation to the employees back and forth; and (c) Under any other analogous circumstances; Provided, That the time spent by the employees in collecting their wages shall be considered as compensable hours worked; (d) No employer shall pay his employees in any bar, night or day club, drinking establishment, massage clinic, dance hall, or other similar places or in places where games are played with stakes of money or things representing money except in the case of persons employed in said places.

Labor Advisory on Payment of Salaries through Automated Teller Machines (ATMs)

A. Payment through automated teller machine (ATM) of banks provided the following conditions are met: 1. the ATM system of payment is with the written consent of the employees concerned; 2. The employees are given reasonable time to withdraw their wages from the bank facility which time, if done during working hours, shall be considered compensable hours worked; 3. The system shall allow workers to receive their wages within the period or frequency and in the amount prescribed under the Labor Code, as amended; chanrobles virtual law library 4. There is a bank or ATM facility within a radius of one (1) kilometer to the place of work; 5. Upon request of the concerned employee/s, the employer shall issue a record of payment of wages, benefits and deductions for a particular period; 6. There shall be n additional expenses and no diminution of benefits and privileges as a result of the ATM system of payment; 7. The employer shall assume responsibility in case the wage protection provisions of law and regulations are not complied with under the arrangement. (Explanatory Bulletin issued by DOLE Secretary Leonardo Quisumbing dated November 25, 1996).

R.A. 6727 (Section 19, Chapter 1) payment of wages through a bank

Upon written petition of the majority of the workers and employees concerned, all private establishments, companies, businesses and other entities with at least twenty-five workers and located within one kilometer radius to a commercial, savings, or rural bank, shall pay the wages and other benefits of their workers through any of said banks within the period and in the manner and form prescribed under the Labor Code as amended.

Doctrine of Double Indemnity

Double Indemnity
The payment to a concerned employee of the prescribed increase or adjustments in the wage rate which was not paid by an employer in an amount equivalent to twice the unpaid benefits to such employee

Unpaid Benefits
The prescribed wage rates which the employer failed to pay upon the effectivity of a wage order, exclusive of other wagerelated benefits.

Republic Act No. 6727

AN ACT TO RATIONALIZE WAGE POLICY DETERMINATION BY ESTABLISHING THE MECHANISM AND PROPER STANDARDS THEREFOR, AMENDING FOR THE PURPOSE ARTICLE 99 OF, AND INCORPORATING ARTICLES 120, 121, 122, 123, 124, 126 AND 127 INTO, PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, FIXING NEW WAGE RATES, PROVIDING WAGE INCENTIVES FOR INDUSTRIAL DISPERSAL TO THE COUNTRYSIDE, AND FOR OTHER PURPOSES (WAGE RATIONALIZATION ACT)

REPUBLIC ACT NO. 8188

AN ACT INCREASING THE PENALTY AND INCREASING DOUBLE INDEMNITY FOR VIOLATION OF THE PRESCRIBED INCREASES OR ADJUSTMENT IN THE WAGE RATES, AMENDING FOR THE PURPOSE SECTION TWELVE OF REPUBLIC ACT NUMBERED SIXTYSEVEN HUNDRED TWENTYSEVEN, OTHERWISE KNOWN AS THE WAGE RATIONALIZATION ACT

Section 12
RA 6727 RA 8188

As to whom the law applies

any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates

any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates

As to the amount of fine

not exceeding twenty five not less than Twenty-five thousand pesos thousand pesos (P25,000.00) (P25,000) nor more than One hundred thousand pesos (P100,000)
not less than one (1) year not less than two (2)

As to imprisonment

Section 12
RA 6727 RA 8188

As to further possible penalty

both such fine and imprisonment at the discretion of the court: Provided, That any person convicted under this Act shall not be entitled to the benefits provided for under the Probation Law Not provided

both such fine and imprisonment at the discretion of the court: Provided, That any person convicted under this Act shall not be entitled to the benefits provided for under the Probation Law the employer ordered to pay an amount equivalent to double the

As to Double Indemnity

Section 12
RA 6727 RA 8188

As violation by an entity

penalty of imprisonment imposed on the entity's responsible officers, including, but not limited to, the president, vicepresident, chief executive officer, general manager, managing director or partner

penalty of imprisonment imposed upon the entity's responsible officers, including, but not limited to, the president, vicepresident, chief executive officer, general manager, managing director or partner

Direct Payment of Wages

Article 105

Wages shall be paid directly to workers to whom they are due, except:
a.In cases of force majeure rendering such payment impossible or under other special circumstances to be determined by the Secretary of Labor and Employment in appropriate regulations b.Where the worker has died

Direct payment of Wages

Payment of wages shall be made direct to the employee entitled except in the following cases: a.Where the employer is authorized in writing by the employee to pay his wages to a member of a family b.Where payment to another person is authorized by existing law c.In case of death of employee

Section 5. Direct payment of wages

Implementing Rules (Book III, Rule VII)

The payment of the wages of a deceased employee shall be made to his heirs without the necessity of intestate proceedings. When heirs are of age, they shall execute an affidavit attesting to their relationship to the deceased and the fact that they are heirs to the exclusion of all persons. In case any of the heirs is a minor, such affidavit shall be executed in his behalf by his natural guardian or next of kin. Upon presentation of affidavit to employer, he shall make payment to the heirs as representative of the Secretary of Labor.

Section 6. Wages of Deceased Employee

Implementing Rules (Book III, Rule VII)

Article 106
Paragraph 1: Mode of Payment

Whenever an employer enters into a contract with another person for the performance of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance with the provisions of this Code.
Paragraph 2: Liabilities in case of Non-Payment In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees 23 directly employed by him.

Article 106
Paragraph 3: Role of the Secretary of Labor and Employment The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only
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Article 106
Paragraph 4: Labor-Only Contractors There is labor-only contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business
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Article 110
Worker preference in case of bankruptcy In the even of bankruptcy or liquidation of an employers business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid.
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Rule VIII, Section 10

Payment of wages in case of bankruptcy Unpaid wages earned by the employees before the declaration of bankruptcy or judicial liquidation of the employers business shall be given first preference and shall be paid in full before other creditors may establish any claim to a share in the assets of the employer.

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Article 111
Attorneys fees:
(a)In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees equivalent to ten percent of the amount of wages recovered. (b)It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorneys fees which exceed ten

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Rule VIII, Section 11

Attorneys fees Attorneys fees in any judicial or administrative proceedings for the recovery of wages shall not exceed 10 percent of the amount awarded. The fees may be deducted from the total amount due the winning party.

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