Article 116 of the Labor Code: No withholding of wages, no kickbacks
Status: In force
What does Article 116 say?
It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s consent.
Read the Labor Code on the DOLE website (it uses the article numbers before 2015)
What does it mean in plain language?
Article 116 of the Labor Code protects the whole of a worker's pay. No one may hold back part of the wages, or push the worker to hand part of them back, by force, stealth, intimidation, threat or any other means, without the worker's consent. Two neighbouring articles close the gaps: Article 117 bans deductions as the price of getting or keeping a job, and Article 118 bans retaliation against workers who complain.
The article keeps the same number after the 2015 renumbering of the Labor Code. The Supreme Court quoted its text in Marby Food Ventures Corporation v. Dela Cruz (2020).
How does it work in real life?
Bea: the supervisor's "share"
Bea is a sales clerk. Every payday her supervisor tells her to hand back part of her pay "for the team fund," or she will be moved to a far branch. She never agreed. This is the kind of kickback, by intimidation and without consent, that Article 116 forbids.
Jun: paying to keep the job
Jun's employer deducts a fixed amount from each payslip, labelled "renewal fee," so that his contract will be renewed. Article 117 makes it unlawful to deduct wages as consideration for retention in employment.
Tess: cut hours after a complaint
Tess files a complaint about unpaid overtime. A week later her hours and pay are cut, while co-workers keep their schedules. Article 118 forbids reducing the wages of an employee who filed a complaint. Like any claim, it rests on evidence: dates, schedules and payslips before and after the complaint.
What does this mean in practice?
- Payslips and records of what was actually received are the main evidence. Messages asking for money back can matter too.
- Withheld wages are a money claim. See late or unpaid salary and can an employer deduct from salary.
- Complaints usually start with conciliation through DOLE's Single Entry Approach. See how to file a labor complaint.
- For the wider set of rules on pay, see Wages and hours.
- A lawyer, a union or the Public Attorney's Office can review a specific case. See Free legal help in the Philippines.
What does Article 116 say?
The full text:
It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s consent.
It forbids two acts:
- Withholding. Keeping any amount of the wages, directly or through someone else.
- Kickbacks. Getting the worker to give up part of the wages after payment, for example by asking for a "share" back in cash.
The list of means is open: "by any other means whatsoever." What matters is that the worker did not consent.
Who can violate it?
The text says "any person," not only "any employer." A supervisor who asks for part of each payday, a recruiter or agent who takes a cut, or the employer itself can all fall under the rule.
What do Articles 117 and 118 add?
Article 117 deals with payments for a job:
It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment.
Article 118 protects workers who use the law:
It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings.
A claim of retaliation still has to be proven with evidence. In Samillano v. NLRC (1996), the workers said their demotion and dismissal were retaliation for reporting labor violations. The Court agreed with the Labor Arbiter that there was no evidence that the acts were retaliatory, although it declared the dismissal void on other grounds.
How is this different from a wage deduction?
Article 113 sets the general rule on deductions: no deduction is allowed except for insurance premiums with the worker's consent, union dues where check-off is recognized or authorized, and deductions authorized by law or by regulations of the Secretary of Labor and Employment. Article 116 is broader. It covers any taking of wages without consent, by any person, in any form.
In cases of unlawful withholding of wages, Article 111 allows the culpable party to be assessed attorney's fees equal to ten percent of the wages recovered.
Frequently asked questions
What does Article 116 of the Labor Code prohibit?
It makes it unlawful for any person, directly or indirectly, to withhold any amount from a worker's wages, or to induce the worker to give up any part of the wages by force, stealth, intimidation, threat or any other means, without the worker's consent.
Does Article 116 apply only to employers?
The article says "any person". It covers anyone who withholds part of a worker's wages or pressures a worker to give some back, such as a supervisor, a recruiter or an agent.
Can an employer collect a fee for keeping someone employed?
No. Article 117 makes it unlawful to deduct from wages, for the benefit of the employer or its representative or intermediary, as consideration for a promise of employment or retention in employment.
Can an employer punish a worker for filing a wage complaint?
Article 118 makes it unlawful for an employer to refuse to pay or reduce wages and benefits, dismiss, or in any manner discriminate against an employee who filed a complaint, started a proceeding, or testified or is about to testify in such proceedings.
Is a worker's written consent always enough to allow a deduction?
No. Article 116 forbids taking wages without consent, but deductions are also governed by Article 113, which allows them only in the cases it lists. Consent obtained by force or threat is not free consent.
General information, not legal advice. For your case, ask a lawyer, the Public Attorney's Office (PAO) or the agency.
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