Article 113 of the Labor Code: Deductions from wages
Status: In force
What does Article 113 say?
No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except:
(a) 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;
(b) 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
(c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment.
Read the Labor Code on the DOLE website (it uses the article numbers before 2015)
What does it mean in plain language?
Article 113 of the Labor Code says an employer may not deduct anything from an employee's wages, except in three cases: insurance premiums the employer paid with the worker's consent, union dues under a check-off, and deductions authorized by law or by regulations of the Secretary of Labor and Employment. Any other deduction is not allowed.
The article keeps the same number after the 2015 renumbering of the Labor Code.
How does it work in real life?
Joy: a "uniform fund" taken from every payday
Joy's employer deducts a fixed amount from every payday for a "uniform fund" that she never agreed to in writing. This is not an insurance premium or union dues. Unless a law or a DOLE regulation allows it, it falls outside Article 113 and may be recovered as a money claim.
Arnel: union dues under the CBA
Arnel's union and employer recognize the union's right to check-off in their collective bargaining agreement. The employer deducts the union dues every month and gives them to the union. This is the second allowed case in Article 113.
Rhea: a group insurance plan
Rhea signs up for a group life insurance plan through her employer, and the employer pays the premium. She agreed that her share is deducted from her salary. This is the first allowed case: insurance with the worker's consent.
What does this mean in practice?
- Keep pay slips. They show what was deducted and when, which matters for a refund claim.
- A claim for illegal deductions is a money claim. It must be filed within three years from the time it accrued. See labor money claims prescription.
- Small wage claims without a claim for reinstatement may be decided by the DOLE Regional Director under Article 129. See also how to file a labor complaint.
- When wages are unlawfully withheld, Article 111 allows attorney's fees of ten percent of the wages recovered.
- Taking away a benefit is a different question, covered by Article 100.
- If you are unsure whether a deduction is allowed, a lawyer, a union or the Public Attorney's Office can check it. See Free legal help in the Philippines.
- For an overview of the rules on pay, see wages, hours and pay under the Labor Code.
What does Article 113 say?
It starts with a general ban:
No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except:
The words "in behalf of any person" mean the ban also covers deductions made for someone else, not only for the employer itself.
What are the three allowed deductions?
The article lists them:
- Insurance premiums. The worker is insured by the employer with the worker's consent, and the deduction pays the employer back for the premium it paid.
- Union dues. The deduction is for union dues where the right of the worker or the union to "check-off" has been recognized by the employer, or the worker authorized it in writing. Check-off means the employer deducts the dues from the pay and gives them to the union.
- Deductions authorized by law or by DOLE rules. The third case reads:
In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment.
This page does not list which laws and regulations allow deductions. For the amounts of the usual payroll deductions, see the take-home pay calculator.
Is a cash bond deduction allowed?
The Supreme Court has said no where the deduction did not fit the three cases. In Agapito v. Aeroplus Multi-Services (2022), a janitorial and manpower company deducted ₱200 a month from a housekeeper's wages as a "cash bond" for more than ten years. The Court quoted Article 113 and said the employer "cannot unilaterally make any deductions except in the three (3) instances provided by law." It held the deduction illegal and ordered a refund of all the monthly deductions, plus 6% legal interest.
In John Kriska Logistics v. Mendoza (2023), a worker's wages had a ₱100 cash bond deducted every week. The labor tribunal ordered a refund of the cash bond for three years only, because money claims must be filed within three years from accrual, and the Supreme Court affirmed the award.
Frequently asked questions
Can my employer deduct from my salary?
Only in the cases Article 113 of the Labor Code allows: insurance premiums the employer paid with your consent, union dues under a recognized or written check-off, and deductions authorized by law or by regulations of the Secretary of Labor and Employment.
Is a cash bond deducted from salary legal?
In Agapito v. Aeroplus Multi-Services (2022), the Supreme Court held that a monthly cash bond deducted from a worker's wages was illegal, because it was not one of the three cases in Article 113. The employer had to refund it with 6% legal interest.
Can the employer deduct for union dues without my consent?
Article 113 allows a deduction for union dues where the right of the worker or the union to check-off has been recognized by the employer, or where the worker authorized it in writing.
Is a deduction legal if it is written in my contract?
Article 113 lists the allowed cases, and the Supreme Court said in Agapito that an employer cannot unilaterally make deductions outside them. Whether a specific clause is valid depends on whether it fits one of the three cases.
How far back can I claim illegal deductions?
A claim to recover deductions is a money claim, which must be filed within three years from the time it accrued. The rulings on refunds differ: in Agapito (2022) the Court ordered a refund of all the monthly cash bond deductions over more than ten years, while in John Kriska Logistics v. Mendoza (2023) the labor tribunal limited the refund of a weekly cash bond to three years and the Court affirmed the award.
General information, not legal advice. For your case, ask a lawyer, the Public Attorney's Office (PAO) or the agency.
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