Issuance of Pay Slips: Encouraging Employer Compliance to Labor Laws and Protecting Employees in the Philippines

Payslips are some of the most easily neglected documents by employees and employers despite the critical information contained within the document and the document’s significance in clarifying concerns on compensation and benefits. Given the consistent complaints received from employees about employers not providing pay slips, the Department of Labor and Employment (DOLE) has campaigned for and urged companies to regularly issue pay slips in compliance to the existing labor laws and for employee welfare.

Companies normally rely on the efficiency of their internal Human Resources department to perform this function. Depending on the size and nature of the business, organizations sometimes do not have enough resources to keep a full-time in-house HR department. Now, there are companies offering payroll services in the Philippines which address the needs of very lean HR departments in smaller organizations. Companies cannot disregard the benefits, psychologically and legally, of issuing pay slips to their employees.

• Better employer-employee relationship with impact to results

Building a culture of trust between employees and employer benefits the organization the most. If employers establish a system promoting fairness, accuracy, and consistency, employees feel secured with their employers and, as a result, are more committed to deliver and are better engaged at work. With little to no ‘questions’ left on the company’s fulfillment of their obligations to their employees, the air is cleared of unnecessary doubts. This allows both managers and employees to focus on the actual job, creating opportunities to achieve results and build a better company culture.

• Compliance to labor laws

If an employer fails to comply with DOLE regulations on non-issuance of pay slips, paying employees below the minimum range of wages, non-remittance of government-mandated contributions such as SSS, Pag-Ibig, and Philhealth, the entity is at risk of being penalized with infringement of labor laws and could possibly be charged in court. Ensuring that pay slips are issued to employees on time and accurately saves the company from unnecessary risks of facing such consequences.

• Clarity of employee records aid in employee career pathing

One of the worries of employees in their jobs is the lack of opportunities to progress. Employers who do not know their financial standings and are clueless about the portion of employee salaries in the overall company budget are usually inefficient in integrating compensation and benefits into their career progression plans for their staff. Issuance of pay slips help both the employee and the HR Manager to clearly see the total compensation received by the staff and identify how long the employee has been in that salary level. Companies should take a holistic approach in understanding the motivations of their employees and should, therefore, take into consideration the implications on salary vis-à-vis the career steps for the employee. Issuance of payslips set a clear stage to discuss these matters with the employees.

The mandate to issue pay slips is, in fact, not limited to corporate settings. The law states strongly that laborers, down to household staff, should get pay slips. The Labor Department specifically emphasized the rights of the employees to raise concerns to the appropriate offices to facilitate investigation on the employer’s organizational practices. Employees who have questions or complaints may report to the nearest SSS or DOLE Regional offices in their area or they may call Dole Hotline 1349.

The Labor Department also encourages newly established companies who have questions on Labor laws and standards to visit the nearest DOLE regional office for a comprehensive training and briefing on these standards. As an effective alternative, employers also have the option to engage companies who offer recruitment and payroll services in the Philippines. Compliance to the law and, more importantly, looking after employee’s welfare while promoting business objectives should never take the backseat in any business operations.