Article 102 of the Labor Code: Forms of payment
Status: In force
What does Article 102 say?
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.
Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of effectivity of this Code, or is necessary because of special circumstances as specified in appropriate regulations to be issued by the Secretary of Labor and Employment or as stipulated in a collective bargaining agreement.
Read the Labor Code on the DOLE website (it uses the article numbers before 2015)
What does it mean in plain language?
Article 102 of the Labor Code says wages must be paid in legal tender, meaning money. An employer may not pay wages in promissory notes, vouchers, coupons, tokens, tickets, chits or any other object, even if the employee asks for it. Payment by check or money order is allowed only in the cases the article lists.
The rule was Article 100 in the 1974 Labor Code. Today it is Article 102, a number the 2015 renumbering did not change, as the DOLE renumbered edition shows.
How does it work in real life?
Lando: store credit instead of pay
Lando works in a grocery. His employer offers to pay half his salary in grocery coupons, and Lando agrees because it is convenient. Article 102 says wages may not be paid in coupons, even when the employee asks for it. His wages must be paid in money.
Mae: paid by check
Mae's company pays by check. The bank is next to the office, the company gets no benefit from the arrangement, staff are given time to cash their checks and that time is counted as work, and the employees agreed in writing because there is no union. These are the conditions of the 1989 implementing rules for payment by check.
Berto's family
Berto, a factory worker, dies with two weeks of unpaid wages. Under Article 105, the employer may pay those wages to his heirs without the need for intestate proceedings. The heirs sign an affidavit on their relationship to Berto, and payment is made through the Secretary of Labor and Employment or his representative.
What does this mean in practice?
- When wages must be paid is in Article 103: at least once every two weeks or twice a month at intervals not exceeding sixteen days.
- Deductions from wages are limited by Article 113. Withholding wages without the worker's consent is unlawful under Article 116.
- The implementing rules quoted here are the 1989 text on the Supreme Court E-Library. Later DOLE issuances on payment through bank accounts and other channels are not covered here.
- More on this topic: Late or unpaid salary and Can your employer deduct from your salary?
- For a wage claim, see how to file a labor complaint and Free legal help in the Philippines.
What does Article 102 say?
The first paragraph is the general rule:
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.
The second paragraph allows checks and money orders in three cases:
Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of effectivity of this Code, or is necessary because of special circumstances as specified in appropriate regulations to be issued by the Secretary of Labor and Employment or as stipulated in a collective bargaining agreement.
What do the implementing rules say about checks?
The implementing rules of the Labor Code (1989 text on the Supreme Court E-Library), Book III, Rule VIII, Section 1, repeat that wages are paid in legal tender. Section 2 allows payment by check where it is customary or provided in a collective agreement, or where all four of these conditions are met:
- there is a bank within a radius of one kilometer;
- the employer gets no pecuniary benefit from the arrangement;
- the employees are given reasonable time to withdraw their wages, and that time is counted as hours worked; and
- the employees concerned give their written consent, if there is no collective agreement.
Where and to whom must wages be paid?
Two related articles complete the rule.
Place of payment, Article 104.
Payment of wages shall be made at or near the place of undertaking, except as otherwise provided by such regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure greater protection of wages.
Direct payment, Article 105. Wages are paid directly to the workers to whom they are due. There are two exceptions:
- force majeure, or other special circumstances set by DOLE regulations, when the worker may be paid through another person under the worker's written authority; and
- the death of the worker, when the employer may pay the wages to the heirs without the need for intestate proceedings. The heirs sign an affidavit on their relationship to the worker, and payment is made through the Secretary of Labor and Employment or his representative.
Frequently asked questions
Can my employer pay my salary in vouchers or goods?
No. Article 102 says no employer shall pay wages by means of promissory notes, vouchers, coupons, tokens, tickets, chits, or any object other than legal tender, even when the employee expressly asks for it.
Can wages be paid by check?
Article 102 allows payment by check or money order when it was customary when the Labor Code took effect, when it is necessary because of special circumstances in DOLE regulations, or when a collective bargaining agreement provides for it.
What conditions do the implementing rules set for payment by check?
The 1989 implementing rules allow it where it is customary or provided in a collective agreement, or where four conditions are all met: a bank within one kilometer, no pecuniary benefit to the employer, reasonable time to withdraw counted as hours worked, and the written consent of the employees if there is no collective agreement.
Where must wages be paid?
Article 104 says payment shall be made at or near the place of undertaking, except as DOLE regulations provide under conditions that give greater protection to wages.
Can my salary be given to someone else?
As a rule, no. Article 105 says wages shall be paid directly to the workers to whom they are due. The exceptions are force majeure or special circumstances, with the worker's written authority, and the death of the worker, when wages may be paid to the heirs.
General information, not legal advice. For your case, ask a lawyer, the Public Attorney's Office (PAO) or the agency.
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