4. Payment of Wages

Requirements for deducting value of facilities:

• Proof must be shown that such facilities are customarily furnished by the trade
• The provision of deductible facilities must be voluntarily accepted in writing by the employee
• The facilities must be charged at fair and reasonable value. (SLL International Cable Specialists v. NLRC, G.R. No. 172161, 2011)

Note: As regards meals and snacks, the employer may deduct from the wages not more than 70% of the value of the meals and snacks enjoyed by the employees, provided that such deduction is authorized in writing by the employees.

The remaining 30% of the value has to be subsidized by the employer. (IRR Labor Code, Sec. 1, Rule VIIA, Book III)

Time of Payment

General Rule: At least once every 2 weeks or twice a month at intervals not exceeding 16 days.

Place of Payment

General Rule: Payment of wages shall be made at or near the place of undertaking

Exceptions: Payment in a place other than the work place shall be permissible only under the following circumstances:

• 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
• When the employer provides free transportation to the employees back and forth
• Under any other analogous circumstances; Provided, That the time spent by the employees in collecting their wages shall be considered as compensable hours worked (Labor Code, Art. 103; IRR Labor Code, Sec. 4, Rule VIII, Book III)

Prohibited Place of Payment

General Rule: Payment cannot be made in a 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.

Exception: Persons employed in the above mentioned places may be paid there (IRR Labor Code, Sec. 4[b], Rule VIII, Book III)

Payment through Banks; Requisites

• There must be a written permission of the majority of the employees concerned in an establishment
• The establishment must have 25 or more employees
• The establishment must be located within 1 km. radius to the bank.

Payment through ATM; Requisites

Payment through automated teller machines (ATM) of banks is allowed, provided the ff. conditions are met

• The ATM system of payment is with the written Consent of the employees concerned;
• 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;
• The system shall Allow workers to receive their wages within the period or frequency and in the amount prescribed under the Labor Code;
• There is a bank or ATM facility within a Radius of one (1) kilometer to the place of work;
• Upon request of the concerned employee/s, the employer shall issue a Record of payment of wages, benefits and deductions for a particular period;
• There shall be no additional expenses and no Diminution of benefits and privileges as a result of the ATM system of payment;
• The employer shall assume Responsibility in case the wage protection provisions of law and regulations are not complied with under the arrangement (DOLE’s Explanatory Bulletin on Wage Payment Through ATM Facility, November 25, 1996)

To Whom Wages are Paid

General Rule: Wages shall be paid directly to the workers to whom they are due (Labor Code, Art. 105)

Exceptions:

• Payment through another person
• In cases of force majeure rendering such payment impossible or under other special circumstances to be determined by the Secretary – the worker may be paid through another person under written authority given by the worker for the purpose (Labor Code, Art. 105[a]); or
• Authorized in writing by the individual employees concerned (IRR of Labor Code, Sec. 5[b], Rule VIII)
• Payment through heirs of the worker

Where the worker has died – the employer may pay the wages of the deceased worker to the heirs of the latter without the necessity of intestate proceedings. (Labor Code, Art. 105[b])

Procedure:

• The claimants, if they are all of age (or in case of a minor, by the natural guardians or next-of-kin), shall execute an affidavit attesting to their relationship to the deceased and the fact that they are his heirs, to the exclusion of all other persons.
• If any of the heirs is a minor, the affidavit shall be executed on his behalf by his natural guardian or next-of-kin.
• The affidavit shall be presented to the employer who shall make payment through the Secretary or his representative. The representative of the Secretary shall act as referee in dividing the amount paid among the heirs.
• The payment of wages under this Article shall absolve the employer of any further liability with respect to the amount paid.
• Payment through member of worker’s family

Where the employer is authorized in writing by the employee to pay his wages to a member of his family (IRR Labor Code, Sec. 5[a], Rule VIII, Book III)

Permissible wage deductions, not exceptions to direct payment:

• Payments for the insurance premiums of the employee, when the employee has authorized the deduction in writing and the employer receives no direct or indirect benefit from it (Labor Code, Art. 113).
• Union dues where the right to check-off has been recognized by the employer in accordance with a collective agreement, or authorized in writing by the individual employees concerned (Labor Code, Art. 113; IRR of Labor Code, Sec. 10, Rule VIII, Book III).

Summary of Rules on Payment of Wages