The Department of Labor and Employment releases the newest guidelines on the payment of Final pay and the issuance of the Certificate of Employment. But before proceeding let us take a look at the definition of the Final Pay and COE.
What is a Certificate of Employment?
It refers to a certificate from the employer specifying the ff:
- the dates of an employees engagement
- termination of his/her employment
- they type of work the employee is employed
An employee even if not yet terminated can ask for a Certificate of Employment.
What is a Final Pay?
Final Pay is known as Back Pay and last pay is the sum of the total monetary benefits due to the employee regardless of the cause of termination. This includes the ff:
- Unpaid earned salary of the employee
- Cash conversions of unused Service Incentive Leave (SIL) pursuant to Article 95 of the Labor Code;
- Cash conversions of remaining unused Vacation, Sick or other leaves pursuant to company policy, or individual or collective agreement, if applicable;
- Retirement pay pursuant to Article 302 of the Labor Code, as renumbered, if applicable;
- Pro-rated 13th month pay pursuant to the Presidential Decree (PD) No. 851;
- Income tax claim for the excess of taxes withheld, if applicable;
- Cash Bonds or other types of deposits that are due or for return to the employee, if any;
- Separation pay pursuant to Articles 298-299 of the Labor Code, as renumbered, company policy, or individual or collective agreement, if applicable;
- Other types of wages and compensation stipulated in and individual or collective agreement, if any
Guideline of the Payment of Final Pay and COE Issuance
In the Labor Advisory No. 6 Series of 2020, the payment of Final Pay shall be released within 30 days from the date of separation or termination of employment unless there is favorable company policy, individual or collective agreement thereto.
While the issuance of the Certificate of Employment should be within 3 days from the time of request by the employee.
What to do if your company fails to follow the guideline?
According to DOLE, an employee can file a dispute at any DOLE Regional/Provincial or field office which has jurisdiction over the workplace.
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