Can Your Employer Hold Your Last Paycheck?

The policies of your company will determine the release of the last paycheck for resigning employees.

Employees who are planning to resign are often required to give at least a thirty-day notice to the company or employer before the date of the intended resignation. However, there are some cases when the employee's last paycheck is not given despite rendering the services within the required period.

Is it lawful for an employer to hold the release of the employee's last salary?

The answer will greatly depend on the policies of your office.

The common scenario for employees who have an intention to resign is to give thirty-day notice and within that period, they need to render their services while waiting for the resignation's effectivity. There are cases when the salary is immediately given so long as it covers the payroll period. For instance, an employee is receiving his/her salary every 15th and 30th of the month.

The payroll period may vary from company to company. In some cases, the payroll period covered by the salary that falls on the 15th is 26 to 10 while the period for the salary on the 30th is from 11 to 25. If the effectivity of your resignation falls on the 26th, you need to give thirty-day notice. This means that before the 26th you should have already completed the required notice period. Your salary on the 15th may still be received, but it is also possible that the company will not release your salary on the 30th covering the period 11 to 25 for the reason that you need to make sue you are cleared from any accountability.

The contract of employment also binds you and your employer. The contracting parties need to fulfill the obligations stated in the contract provided they do not go against morals, good customs, public order and public policy.

If the contract indicates stipulations as to the manner of release of salary once an employee expresses his/her intent to resign, this obligation must be fulfilled. However, the company's customary practice must be consulted if you have not signed any contract.

It is important that you inquire from your company about their policy. This way, you will be enlightened in the event they do not release your last paycheck. The human resources and accounting departments will be able to answer your concerns regarding your salary.

The reason behind the withholding of the salary is to give the employer the chance to clear the employee from liabilities. Once you comply with company's requirements such as securing a clearance form, there is a possibility that you will still get your salary.

Pinoy Attorney

Written by : Pinoy Attorney