Final Pay in 30 Days, COE in 3 Days: What HR & Employees Must Know (PH Guide)

Employees and HR teams often ask how fast final pay and Certificates of Employment (COE) should be released in the Philippines. DOLE Labor Advisory 06-20 sets clear timelines — 30 days for final pay and three days for COEs.

Final Pay Out in 30 Days, COE Out in 3 Days

When employment ends in the Philippines, two urgent questions usually come up: “Kailan ko makukuha ang final pay ko?” and “Kailan ko makukuha ang Certificate of Employment (COE) ko?” Under DOLE Labor Advisory No. 06-20, employers are generally required to release final pay within 30 days from separation and to issue a COE within three days from the employee’s request, unless a more favorable company policy or agreement exists.

As an HR practitioner and people strategist, this guide explains these timelines in simple terms, clarifies what employers can and cannot withhold, and suggests practical policies so both employees and HR teams stay compliant and fair.

What counts as final pay?

“Final pay” (also called last pay or back pay) is the total amount due to an employee when employment ends, regardless of the reason for separation. Baker McKenzie and other commentators summarizing DOLE Labor Advisory No. 06-20 describe final pay as the sum of all wages and monetary benefits owing to the employee at the time of separation.

Depending on company policies and the cause of separation, final pay may include:

• Unpaid wages and overtime up to the last working day
• Pro-rated 13th month pay
• Cash conversion of unused, convertible leave credits
• Separation pay, if legally applicable (for example, redundancy, retrenchment, or other authorized causes)
• Other monetary benefits due under company policy, CBA, or the employment contract

DOLE’s advisory directs employers to release this final pay within 30 days from separation or termination, unless there is a more favorable (shorter) timeline in a contract, CBA, or company policy.

For a concise legal discussion, see Platon Martinez: DOLE Labor Advisory 06-20.

What is a Certificate of Employment (COE)?

A Certificate of Employment is a simple document stating that a person worked for the company, indicating the position(s) held and the period of employment. DOLE Labor Advisory No. 06-20 requires employers to issue a COE within three days from the time the employee requests it, regardless of the reason for separation and even if the employee has a pending case.

The COE is not meant to be a performance evaluation or a character reference, so it should not be used as a tool to “reward” or “punish” former employees. Using the COE as leverage by delaying or denying it for reasons unrelated to the basic employment facts goes against the intent of the advisory.

Is the 30-day timeline realistic?

The 30-day period is usually sufficient for straightforward separations, such as rank-and-file resignations with minimal issued property. However, it can be more challenging for roles with complex accountabilities, including positions of trust and confidence or employees handling accounts tied to billing cycles (for example, post-paid lines, corporate credit cards, inventory, or loans).

DOLE’s rule, however, counts 30 days from the date of separation, not from the date clearance is completed, so employers are encouraged to review and align their internal clearance and payroll processes with this requirement. Many organizations now start clearance processing as soon as resignation is accepted or notice of termination is issued so that sign-offs, retrieval of assets, and billing reconciliations are completed within that 30-day window.

For structured guidance, see Lawyer-Philippines: Employer Deadline to Release Final Pay and COE.

Can an employer withhold or deduct from final pay?

Employers are not allowed to hold final pay indefinitely without legal basis. Article 1706 of the Civil Code allows withholding of wages only for a “debt due” to the employer.

In G.R. No. 202961 (Milan v. NLRC), the Supreme Court clarified that “debt” in this context includes legitimate accountabilities such as unreturned property or other obligations properly documented as due to the employer. The Court recognized that the employer may apply a portion of the employee’s wages or final pay to settle a proven debt, but any remaining amount that is clearly due should still be paid.

In practice, this means:

• Employers may deduct the monetary value of unreturned company property or unpaid obligations from final pay, if these debts are clearly documented and computed.
• Employers should release the remaining balance of final pay within the prescribed period.
• Blanket withholding of the entire final pay just because clearance is “not yet done” is risky, especially where no specific, quantified debt due has been established.

For a short case discussion, see LAW I.Q.: Milan vs. NLRC (2015).

How about AWOL or employees who did not render 30 days?

Some employees resign without completing the 30-day notice or abandoned work, or stop reporting while they have pending cases. These situations do not automatically erase the employee’s right to final pay or COE, but they can affect whether a “debt due” exists and how legitimate deductions are computed.

For example, an employee who fails to return a company laptop or settle a documented cash shortage may be liable for the value of the item or shortage, subject to due process and proper documentation. Even if the employee left abruptly, the employer remains bound by DOLE rules on issuing COEs and by general principles on paying wages and benefits, subject only to valid deductions recognized by law and jurisprudence.

Practical policy tips for employers

To comply with DOLE Labor Advisory No. 06-20 and reduce disputes, employers may consider policies such as:

• Starting the clearance process immediately upon receipt of resignation or notice of termination, rather than waiting until the last day of work.
• Clearly defining who initiates clearance (employee or HR), who signs off (line manager, IT, admin, finance), and who consolidates the computations for payroll.
• Providing a standard checklist of possible accountabilities (for example, laptop, company ID, post-paid line, inventory, loans) and how their monetary value is computed if not returned.
• Explicitly stating in the employee handbook that final pay will be released within 30 days, aligned with DOLE Labor Advisory No. 06-20, and that legitimate, properly documented debts may be deducted pursuant to Article 1706 of the Civil Code and relevant jurisprudence such as Milan v. NLRC.

A short notice in payslips, exit instructions, or FAQs reminding employees of their right to request a COE—and the three-day timeline—also improves transparency and trust.

Practical tips for employees

Employees can also take steps to help ensure smoother processing of their final pay and COE:

• Submit a written resignation that clearly states the intended last day, following the 30-day notice requirement in the Labor Code and in company policy, where applicable.
• Cooperate with the clearance process by returning company property, settling cash advances, and signing necessary forms before the last day when possible.
• Make a written request for a COE (email is usually sufficient) and keep proof of the date sent so the three-day timeline can be counted clearly.

If significant delay occurs despite compliance, the employee can first raise the concern with HR, and, if unresolved, seek assistance from the nearest DOLE regional or field office. DOLE’s Single-Entry Approach (SEnA) and regular labor standards enforcement provide avenues to address issues on final pay and COE release.

Frequently Asked Questions