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.
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.
Direct Payment
Wages shall be paid directly to the workers, except:
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, in which case, the worker may be paid through another person under written authority given by the worker for the purpose.
Cash Bond
It is only in private security agency where the practice is recognized and allowed.
Labor Advisory provides that deductions made from the employees’ wages, for company uniforms, cash deposits for loss or damage, personal protective equipment (PPE), capital share or capital build up in service cooperatives, training fees, and other deductions not included in the enumeration above, are unauthorized.
Wage Deduction
No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except:
In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance;
For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned; and
In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment.
Prohibition against Diminution of Benefits
This provision mandates that benefits given to employees under an agreement, policy or established practice cannot be taken back, removed or reduced unilaterally by the employer, must also be considered. For the grant of benefits to be considered an established practice, the Supreme Court has ruled that those benefits should have been enjoyed over a long period of time and must be shown to be consistent and deliberate, given not by reason of a strict legal or contractual obligation, but by reason of an act of liberality on the part of the employer.
Notes: It’s quite a controversial provision because it doesn’t consider the company’s situation. “Over a long period” ruling is also vague but general perception is longer than 2~3 years. Please take a note of the term “unilaterally”. I recommend you to design SUSTAINABLE benefit/compensation package even before you start a business. One way is to use Incentive System which has clear condition to qualify.