CHAPTER 2

Inspirational Quote:
•DID YOU
KNOW THE
PAYMENT OF
WAGES?
 A. Forms of Payment
A.1. Payment of wages should be in legal currency

As a general rule, wages shall be paid only in legal currency

By way of exception, payment may be in the form of bank checks,
postal checks or money orders provided they are stipulated and in
compliance with the Implementing Rules of the Labor Code.
As a general rule, employee's signature should appear in the payroll as
evidence of actual payment. But absence thereof does not neces sarily
lead to the conclusion that wages were not received by the employee.
In cases involving monetary claims, the burden of proving payment
thereof rests on the employer. This is subject to certain exceptions
There is criminal liability for those found violating the provision on
payment of wages.
Can employers pay their employees' salary
by means of food coupons or meal vouchers
only?
The answer is in the
negative pursuant to the
Labor Code. Thus:
"ART. 102. Forms of
payment.-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."
[Emphasis supplied]
 Being a general rule, there are
exceptions to its application.

Hence, payment of wages by bank checks,

postal, checks or money orders is allowed
where such manner of wage payment is
customary on the date of the effectivity of
the Code, where it is so stipulated in a
collective agreement, or where all of the
following conditions are met:
• (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.
 A.2. Proof of service rendered by the
employee • The age-old rule governing the
relation between labor and capital, or
management and employee of a "fair
day's wage for a fair day's labor"
remains as the basic factor in
determining employees' wages. If
there is no work performed by the
employee there can be no wage or
pay unless, of course, the laborer was
able, willing and ready to work but
was illegally locked out, suspended or
dismissed, or otherwise illegally
prevented from working.
There must be competent proof such as time cards or office records to
show that they actually rendered compensable service during the
stated period to entitle them to wages.
How is payment of wages
proven? What competent
proof must be submitted to
establish the satisfaction of
the obligation by the
employer?
 A.3. Evidence of payment of wages
• Supreme Court decisions point to payslips and payroll as
among the pieces of evidence of payment. This boils
down to the evidentiary value of the documents
presented as proof of claim or defense.
• Well-entrenched is the principle that in order to
establish a case before judicial and quasi-judicial bodies,
it is necessary that allegations must be supported by
substantial evidence. Substantial evidence is more than
a mere scintilla. It means such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.
A.3.1. Rule as to employee's
signature on payroll
Ideally, the signature of employees should appear in
the payroll as evidence of actual payment. However,
despite the absence of signature, one cannot make
a conclusion that salaries and benefits were not
paid.
By implication, the employees, in signing the
payslips with their acknowledgment of full
compensation, unqualifiedly admit the receipt
thereof.
A.3.2. Payslip may be proof of payment
or underpayment.
The payslips are original duplicates of computerized
payslips issued by the employer to its workers which
contain entries such as pay date, employee's I.D.
number, employee name, category, basic rate, overtime
hours and other relevant information, including an
itemization of earnings and deductions.
While ordinarily, payslip is only a statement of the
gross monthly income of the employee, his signature
therein coupled by an acknowledgment of full
compensation. The payslip becomes substantial proof
of actual payment.
A.3.3. Employer must pay his
employees by means of payroll

The Omnibus Rules Implementing the Labor

Code provides that every employer is required
to pay his employees by means of payroll.
A.3.4.What the payroll should contain?

The payroll should show, among other things, the employee's rate of
pay, deductions made and the amount actually paid to the employee.
Interestingly, the failure of the employer to present the payroll to
support his claim that the employee was not his worker, raises
speculation that the omitted evidence would be adverse to his case.
Thus, the the following information and data shall be individually shown
therein:
(1) Length of time to be paid;
(2) The rate of pay per month, week, day or hour piece, etc.;
(3) The amount due for regular work;
(4) The amount due for overtime work;
(5) Deductions made from the wages of the em ployees; and
(6) Amount actually paid.
ICE BREAKER
A. 3.5.
Timekeeping requirement and methods

The basis of pay is the work rendered during the

normal hours of work. Timekeeping is crucial in
implementing payroll policies, subject to certain
exceptions involving workers who are not required to
keep time.
Timekeeping Methods
• Through the use of bundy clock by means of which an
employee can punch in his individual card the time of
arrival and departure from work.

• Through the employment of a timekeeper whose duty is

to time in and out every employee in a record book; and

• By furnishing the employees individually with a daily

time record form in which they can note the time of
their respective arrival and departure from work.
A. 3.6.
Manner of accomplishing entries in the attendance record

All entries in time books and daily time records shall be

accomplished in ink. All filled-up bundy clock cards,
timekeeper’s books and daily time record forms shall be
kept on file in chronological order by the employer in or
about the premises where the employee is employed,
and open to inspection and verification by the
Department of Labor and Employment as provided in the
implementing Rules.
A. 3.7.
Attendance record of managerial employees and field personnel
Managerial employees, officers or members of the managerial staff,
as well as non-agricultural field personnel, need not be required to keep
individual time records, provided that a record of their daily attendance is
kept and maintained by the employer.

B. 3.8.
Attendance records of workers paid by results
Where the employees are paid on piece, pakiao, takay, task,
commission or other non-time basis, the employer shall keep production
records showing their daily output, gross earnings and the actual number
of working hours spent by the employees on the job, bearing the
signature or thumbmark of the employee concerned.
Preservation of employment records for 3 years

All employment records required to be kept and

maintained by employers shall be preserved for at least
three (3) years from the date of the last entry in the
records.
Place to keep employment records
• All employment records of the employees
shall be kept and maintained by the
employer in or about the premises of the
work place.
Meaning of premises of a workplace

The premises of a workplace shall be understood to

mean the main or branch office of the establishment,
if any, depending upon where the employees are
regularly assigned. The keeping of the employee's
records in another place is prohibited."
Entries in payroll enjoy the presumption of
regularity
In one case, employee asserted that the payroll was
merely fabricated for the purpose of supporting his
assertion before the NLRC. The Supreme Court did not
agree. Entries in the payroll, being entries in the course of
business, enjoy the presumption of regularity under Rule
130, Section 43 of the Rules of Court. It is therefore
incumbent upon the complainant to adduce clear and
convincing evidence in support of his claim of fabrication
and to overcome such presumption of regularity
ICE BREAKER
 ( A.4. ) Employer has the burden of proof in
monetary claims cases

It appears that once the right of the employee to his salaries

and benefits has been established, it now becomes the burden
of the employer to prove payment thereof.
It is settled that once the employee has set out with
particularity in his complaint, position paper, affidavits and
other documents the labour standard benefits he is entitled to
( such as his entitlement to unpaid overtime pay, premium pay
for holiday and rest day and service incentive leave pay ) and
for which he alleged that the employer failed to pay him, it
becomes the employer’s burden to prove that is had paid
these money claims. One who pleads payment has the burden
of proving it.
 ( A.4.1 ) Mere denial of the claim will not
discharge the employer’s burden
If the company merely denies the employees claim for
underpayment, without presenting any controverting evidence to
prove full payment. The claim for underpayment of the employee
shall stand.
The testimony of the debtor creating merely an inference of
payment will not be regarded as conclusive on that issue. Hence,
for failure to prevent evidence to prove payment, the company
defaulted in its defence and in effect admitted the allegations on
the employees
In a manner of speaking, the employer is the debtor while the
employee is the creditor in an employment relationship in so far as
the wage due to the former is concerned. Being so, the employer
has the burden to prove payment of wages.
( A.4.2 ) Case where the burden of proof
lies with the employee

In a case where the employee asserted that he is

entitled to commissions and which the employer
denies, it was held that since there is no law which
requires employers to pay commission, it is
incumbent upon the employee to prove that there
was indeed an agreement between him and his
employer Go the payment thereof.
( A.5. ) Criminal liability of employer
who pays employees in prohibited forms

Any person who shall pay the wages due a labourer

or employee employed by him, by means of tokens
or objects other than the legal tender currency of
the Philippines, unless expressly requested by the
labourer or employee shall suffer the penalty of
arresto mayor or a fine ranging from 200 to 500
pesos, or both.
The duration of imprisonment as penalty under
arresto mayor is from one month and one day to six
months.
 B. Time of Payment

Time of payment wages pertains to the frequency of

payment. Usual period of payment is every 2 weeks or
twice a month. In colonial language, this is known as
"15-30".
Wages shall be paid atleast once every two weeks or
twice a month interval not exceeding 16 days. If on
account of force majeure or circumstances beyond the
imployers control, payment of wages on or within the
time herein provided cannot be made, the employer
shall pay the wages immediately until such force
majeure or circumstances have ceased. No employer
shall make a payment with less frequency than once a
month.
B. 1. Time within which to pay workers paid
by results or task basis
What is the interval of payment for the employees paid by
result? Are they covered by the same "15-30" period.
The payment of wages of employees engaged to perform a
task which cannot be completed in 2 weeks shall be subject
to the following conditions, in the absence of a collective
bargaining agreement or arbritration award.
• That payments are made at intervals not exceeding 16 days
in proportion to the amount of work completed.
• That final settlement is made upon completion of the
work.
B. 2. Parties may stipulate shorter intervals
of payment

It is worth nothing that parties may stipulate a

shorter interval such as daily, weekly or even twice
a weekly. Again the frequency and period mandated
by law are just the minimum requirements.It is
clear that the only limitation is that interval shall
not exceed 16 days.
C. Place of payment
In the past, prior to the advent of Automated teller
machine (ATM), employers pay their workers in the
same place where they work manually. Workers fall
in line as they wait their turn to be paid.

With the healthier economic activities in the

years that followed and the advancement of
computer technology, methods and practices
in the payment of wages has changed
dramatically.
Now majority of companies pays wages through
banks by crediting the amount into employees
accounts which can be withdrawn through the ATM.

The Labor code under Article 104 still provides for

traditional manner of payment. It is only in 1996 that
the DOLE issued a labor advisory in the payment of
salaries through the ATM.
Payment in a place other than the work place shall be
permissible only under the following circumstances.

• When the payment cannot be affected at or near the place

of work by reason of deterioration of peace and under
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 work.
ICE BREAKER
z
C.1. Prohibited
place of
payment
 z

While the implementing rules state also

other locations than the workplace which
may be used as Venue for payment of
wages. There are exceptions to this
exception.

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 .
z
 Prior to the explosion of ATMs, a law was
passed authorizing the payment of wages
through banks, a subject to certain conditions.

 Thus, in 198, R.A. 6727 was passed providing

that upon written petition of the majority of the
employees or workers concerned, all private
establishment, companies, business, and other
entities with twenty-five (25) or more employees
and located within one (1) kilometer radius to a
commercial, savings or rural bank shall pay the
wages and Other benefits of their employees
through any of said banks and within the period
for payment of wages fixed by presidential
decree No. 442, as amenda, otherwise known as
the labor code of the Philippines.
z

C.2.1. Bank certification on

records of payment

 Whenever applicable and upon request of a

concerned worker or union, the bank shall
issue a certification of the record of payment
of wages of a particular worker or workers
for a particular payroll period.
C.3. Payment
z of wages through ATM

 At present, payment of salaries and wages is dones through

ATM, The big advantage to worker for this method is that
there are various machines available for this bank service. It
is even operating 24 hours unlike the bank payments
allowed in 1989. The only problem is the frequent offline
status of the ATMs particularly during payday.

 On November 25, 1996, a Labor advisory on the payment of

salaries through ATM was issued. It provides that based on
article 104 of the labor code as well as the provisions of
section 4, Rule VIII, book lll of the Rules to implement the
labor code and considering the present day circumstances,
practice and technology, employers may adopt a system
other than in the workplace, such as through automated
teller machine (ATM) of bank, provided that the following
conditions are met:
 z

 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 work;

 3.the system shall allow workers to receive their wages

within the period or frequency and in the amount
prescribed under the labor code;

 4. There is a bank or ATM facility within a raduis of one

(1) kilometers to the place of work;

 5. Upon request of the concerned employees, the

employer shall issue a record of payment of wages
benefits and deductions for particular period;
z
 6. There shall be additional expenses and
no diminution of benefits and privileges as
a result of the ATM system of payment; and

 7. The employer shall assume

responsibility Incase the wage protection
provisions of law And regulations are not
complied with under the arrangement.

 However, the main advantage og the ATM is

also it’s failures. While it facilities salary
payments due to its online capability, once
connection to online process bogs down,
ATM transaction dies out.
 D. TO WAGES SHALL BE PAID

Wages should be paid directly to workers. But situations like death of the employee or
disability such that he cannot acknowledge receipt thereof are always a possibility. In this
case, who shall receive his wages? The general rule is that wages shall be paid directly to
the workers to whom they are due.

The exceptions are as follows:

(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, in which case, the worker may be paid through another person
under written authority given by the worker for the purpose; or
(b) Where the worker has died, in which case, the employer may pay the wages of the
deceased worker to the heirs of the latter without the necessity of intestate proceedings.
(c) Where the employer is authorized in writing by the employee to pay his wages to a
member of his family.
(d) Where payment to another person of any part of the employee's wages is authorized by
existing law, including payments for the insurance premiums of the employee.

09/11/2022 43
D.1 Meaning of Force Majeure

For caso fortuito or force majeure (which in law are

identical in so far as they exempt an obligor from
liability) by definition, are extraordinary events not
foreseeable or avoidable, "events that could not be
foreseen, or which, though foreseen, were inevitable.

D.2. How payment of wages is made to deceased ?

Succession comes into play once the person dies

especially as regards his property. The Labor Code
itself provides the rules on payment of wages in case
of the of the employee.
09/11/2022 44
 D.2.1 No need for intestate proceeding
The proceedings in the absence of a will are called "in
testate proceedings." To clarify, when a person dies, he
leaves his property behind. Sometimes during his lifetime,
he executes a will where he writes who shall inherit his
property. Largely in the Philippines, the writing of a will is
not a popular practice. But it does not mean that there can
be no proceedings without such will. There is what is called
an intestate proceeding for those who did not make a will.

Article 105 provides the rule on succession as to wages of

the deceased employee even in the absence of a will. Thus,
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 proceeding.
09/11/2022 45
D.2.2. Rule if claimants are all of age
- If claimants of the wages are all of age, they 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."

D.2.3. Rule if any of the claimants is a minor

- If any of the heirs is a minor, the affidavit shall be exe
cuted on his behalf by his natural guardian or next-of-
kin.

Under our law, a minor is a person who is below 18

years old.
Emancipation takes place by the attainment of mai
ity. Unless otherwise provided, majority commences
at the 53 age of eighteen years,

D.2.4. To whom shall the affidavit be presented

- The affidavit shall be presented to the employer
who shall make payment through the Secretary of
Labor and Employment or his representative. The
representative of the Secretary of Labor and
Employment shall act as referee in dividing the
amount paid among the heirs.
D.2.5. Effect of payment by the employer to the
Secretary of Labor
- The payment of wages shall absolve the employer of any
further liability with respect to the amount paid.

In short, once the employer has done the correct pro cess
of payment of wages of the deceased employee, he
cannot be held liable as to any further claims on such
matter. It is always possible that there could be other
parties connected with the deceased who might be
interested in the amount he left behind. The employer,
who has complied with the procedure in Article 105, will
be shielded from any conflicting claims as he is absolved
from further liability.
ICE BREAKER
DO YOU HAVE
ANY
QUESTIONS?

ANY VIOLENT
REACTIONS?
ASSIGNMENT!
• Drink Water. Stay hydrated everyone!
• Spend the rest of your Sunday
afternoon with your family/friends.
• Eat your lunch.
• Watch your favorite movie. Acad free
sa ta!
• Pray and Praise God.
THANK YOU!