Employers can Withhold Last Pay for Debt Due; Clearance Procedure
Clearance Procedure
Requiring clearance before the release of last payments to the employee is a standard procedure among employers, whether public or private.
Clearance procedures are instituted to ensure that the properties, real or personal, belonging to the employer but are in the possession of the separated employee, are returned to the employer before the employee’s departure.
Withholding of wages prior to clerance
As a general rule, employers are prohibited from withholding wages from employees.
However, law supports the employers’ institution of clearance procedures before the release of wages. As an exception to the general rule that wages may not be withheld and benefits may not be diminished, the Labor Code provides that law may authorize the employer to do so.
That law is Article 1706 of the Civil Code which pertains to the right of employer to withhold wage for a debt due. (Milan vs. NLRC, G.R. No. 202961, February 04, 2015)
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